“Moving me”
started the explosion, a global phenomenon of
mobility-on-demand.
Alongside of taxicab and traditional car rental services, we now have Uber, Lyft,
Didi Kuaidi, Zipcar, Halo, and more. Bla Bla Car’s ride-sharing business moves
Europeans from city to city in 19 countries. Moving people disrupts far more
than traditional taxi and limousine services, however. In San Francisco, Uber
has grown its revenue by more than $1 billion in five years, expanding a market
and competing with not only taxi services but car rental agencies, parking lot
owners, and vehicle replacement businesses.
Just as explosively, these innovators have extended themselves into other
businesses: “moving my stuff.“
It used to be that delivery was a matter for traditional truck and bicycle services.
The new players in mobility-on-demand are creating collateral businesses that
threaten to disrupt the traditional competition. Audi, Amazon, and DHL have
teamed to deliver belongings to the trunks of consumers’ cars. Instacart is
delivering groceries to consumers’ doors within an hour of ordering them.
Even UPS and FedEx may face serious competition in the future. Amazon is
experimenting with drone delivery—seemingly laughable now, but look out if
they get the cost down. For the auto industry, the effect is still uncertain, but
the potential for reducing sales on delivery vehicles is nothing to dismiss.
And the mobility innovators aren’t stopping with delivery but extending services
to “moving my car.”
RelayRides is building a market for renting out consumers’ idle vehicles. Valet
services were once for rich people. Now Zirx acts like a virtual valet, parking
and moving consumers’ cars as well as servicing them. Imagine the ability
of consumers via an app to have someone show up at their door or their
workplace and take their car for them. They no longer have to worry about
parking. “Moving my car” innovations can easily lead to new unmet consumer
needs, such as still more car-sharing that drives down car sales or changes their
utilization.
The implications of mobility competition
We predict still more effects from the changing competition in mobility: more
competition, more consumer adoption, more disruption, greater controversy,
and, above all, a faster pace of innovation.
The genie is out of its
technological bottle:
Things will only go faster.
Innovators are making
their presence known,
and consumers are
quickly recognizing they
like this new flexibility
and availability in their
transportation options.
– No doubt the intensity of
competition will mean pricing
will remain highly competitive.
It will also spawn still more
innovation: In response to Uber,
New York City’s taxi services
just announced their own taxi-
hailing app, Halloo.
– With disruptions come political
controversies. In New York,
consumer demand for mobility-
on-demand cowed the mayor.
When His Honor tried to restrict
Uber services, consumer uproar
made him retreat. Whatever the
controversy, we believe the free
market will ultimately prevail.
We expect consumers are going
to move from making marginal
decisions to use mobility options—
an occasional ride here or there—
to utilizing mobility-on-demand
consistently. Where mobility
options have begun to flourish, the
two-car model is cracking.
The clockspeed dilemma 21
© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with
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New competitors in autonomy will power a still more
accelerated pace for autonomous vehicles
Acceleration in autonomy
Those mobility-on-demand innovators also want to be
autonomous: Uber recently announced it would buy self-
driving cars from Tesla when they become available. Uber’s
ambition, however, is just the tip of the iceberg. Under
the surface is a far-reaching commitment to autonomy
innovations from players outside the auto industry who
have enormous resources and the freedom to build
autonomous vehicles without the platform constraints of
OEMs. They are forcing an accelerated pace of change.
Of course, the auto industry has accelerated the pace of
innovation on its own. In 2005, after more than 25 years of
research, five Level 4 autonomous vehicles successfully
completed the Great Challenge, a 150-mile course through
the Mojave Desert. Flash forward 10 years: Ford has
patented an autonomous car with reconfigurable seats.
Continental is testing three highly autonomous vehicles.
Mercedes Benz previewed a fully autonomous car at
the 2015 car show, and Volvo will begin a trial of 100
self-driving cars in 2017. Partial autonomy developments
have also accelerated since 2000, and the commercial
infrastructure of the industry is developing. Examples of
it include Ford’s autonomous vehicle program, GM and
Carnegie Mellon’s Autonomous Driving Collaboration
Research Lab, Volkswagen and Stanford’s VAIL program,
and Toyota’s recent investment in autonomy. That is
extraordinary progress.
But new competitors are rushing into the autonomy
space, and they don’t have to contend with existing
infrastructure—billions of dollars in fixed assets—as
traditional automakers do. Freed of those platform
constraints, these new players are moving fast. Since
2009, Google’s self-driving cars have logged 1.7 million
miles. Apple announced its Apple Car will appear in
2019. Meanwhile, in partial autonomy, Tesla’s latest OTA
update provides highway autopilot—no need for drivers
to touch the brake, accelerator, or steering wheel when
they are on freeways. And in commercial infrastructure,
there’s Google’s Self-Driving Car Program and even Uber’s
investment in autonomous research at the University
of Arizona.
The arrival of new, aspiring automakers is not the only
development of consequence for the auto industry. There
are at least 17 companies outside the traditional ecosystem
who have announced plans to invest and contribute
research and products to support autonomous systems.
Some are accomplished start-ups. Cruise Automation
has already passed significant milestones in delivering
technology that will enable cars to drive themselves.
Whatever their offerings will be, these companies will
significantly accelerate the knowledge base for autonomy.
Collectively, these new entrants into the auto ecosystem
are making substantial financial commitments to autonomy.
The net result is clear: The efforts of these new
competitors in autonomy will power a still more
accelerated pace for autonomous vehicles, far faster
than the pace at which the traditional auto industry has
been operating.
The implications of changing competition in autonomy
As the nontraditional competitors continue to surge into
the autonomy space, we predict they will do more than
push the speed of technological change the auto industry
must follow. They will also upend after-markets and related
markets. Once consumers see that autonomy makes
people safer and drives down the cost of insurance and
repairs, their demands will create further pressure to
accelerate the rate of autonomous innovation.
22
© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name, logo and “cutting through complexity” are registered
trademarks or trademarks of KPMG International. NDPPS 404853