Self-Driving Cars Will Require New Business Models

"It is likely to be many years before AVs are cheap enough for individuals to buy them, and capable enough to operate outside predefined, geofenced areas. Meanwhile, the roll-out of cheap robotaxis in urban areas might encourage many young urbanites, who are already going off car ownership anyway, to abandon it altogether. The combination of ride-hailing and autonomous-driving technology confronts carmakers with “the most profound challenge to their business models in a century”, declares a recent report from BCG. That is why carmakers are now piling into ride-hailing and car-sharing services and pushing on with their own AV programmes. In an autonomous future where ownership is optional, they need to be selling rides, not cars."

A shift from private vehicles to fleet-owned automated vehicles will mean business problems for car dealers, repair shops, partsmakers, insurers, health-care providers, and personal-injury lawyers. A more direct threat appears for people who drive taxis and delivery vehicles.

"It already seems clear that AVs will cause the car industry and its adjacent businesses to change shape dramatically over the next couple of decades. But the consequences will not stop there. Like cars before them, AVs are sure to have far-reaching cultural and social effects too, most obviously in cities."