Why you may not own, or drive your vehicle in 10 years time | RenewEconomy

Why you may not own, or drive your vehicle in 10 years time

Car ownership is expensive, dangerous and highly polluting. All three issues can be addressed by the combination of electric vehicles, car sharing, and autonomous driving. That means a new experience, a new business model, and a new multi-trillion dollar industry.


As industry transitions go, the shift from the internal combustion engine to electric vehicles, from single ownership to shared asset, and from human driving to robotics and software, is going to be as big as they come.

This is not just a multi-billion dollar market, but a multi-trillion dollar one – more than $10 trillion if some analysts are to be believed. It will impact the oil industry, and the car industry. And it will filter down to the electricity industry and home energy systems, because battery storage will become so endemic. It will also redefine the way we live and drive.

car problems

The current model of car ownership is expensive, dangerous, and inefficient, according to Morgan Stanley analysts. Cars are used sparingly, they take a huge amount of time when they are in use, they pollute (using 45 per cent of all oil use) and they are deadly (at least 1.3 million deaths a year).

The shared mobility market is likely to be driven by three irresistible trends that address these very problems.

The first is the concept of shared vehicles, and a giant leap in the business model from cars sold to a business model based on miles, or kilometres, travelled. Kind of like iPhones on wheels.

vehicle milesCars are now expensive assets, and they are used for less than one hour a day, Morgan Stanley analysts note. That translates into a utilisation rate of less than 4 per cent, a figure that has remained largely unchanged for a century.

“The shared mobility model moves the transportation business from a privately owned and operated model to a professional service run by large firms engaged in mega-fleet management,” the analysts say in a recent report.

The second trend is autonomous vehicles, which are just perfect to tap into the full potential of shared vehicles, and will lift vehicle utilisation rates to 50-60 per cent.

This, of course, can’t be done with a human driver. Logistics won’t allow it, and the human factor is the biggest single cost of ride sharing services. “Replace the driver with a few million lines of code and some commoditised sensors and the savings can really begin,” Morgan Stanley analysts note.

The third, equally important factor is the emergence of electric vehicles and the downfall of the internal combustion engine.

EVs are currently hurt by low gas prices and high paybacks (for those who worry about such things). These are the iPhones on wheels that are bringing with them the new autonomous driving technologies and the opportunity to think differently about business models.

So, as vehicular mobility moves from private ownership to professional fleets of millions of vehicles that provide an on-demand service, firms will be able to amortise the costs of technologies and the infrastructure.

That’s critical. Instead of EVs being considered to be an indulgence beyond the finances of most drivers, paybacks for shared vehicles shrink to as little as three years, encouraging mass production of battery packs, which will then flow through to lower costs for energy storage.

Shared autonomous fleets also address many other problems with today’s EV model, such as slower charging time, lower charging station density and range limitation. And they will address issues such as crowded streets and growing populations.

hoursMorgan Stanley predicts that by 2030, more than 20 per cent of all miles travelled in Europe will be shared. In the US and India, it will be 25 per cent. In China, it will be more than 34 per cent.

But where and how might this happen first?

One regular correspondent of RenewEconomy’s, who prefers to remain anonymous, suggested that Manhattan could be an obvious place to start.

“Suppose that a number of major arteries in a town were cordoned off strictly for the use of autonomous vehicles, much the way that only trains now run on railroad tracks,” our correspondent writes.

“This would mean that nearly every place in town could be within a few blocks of such an artery if desired.

“Note that this is essentially what Manhattan already has with its subway system. Every place on the island is just a short walk from a subway stop, and, as a result, comparatively few residents bother even owning a car, much less driving it just to cross town a few miles. I lived there myself for a couple of years, and can attest that this really is the case, and I myself did not bother with a car. Even when I moved out to the suburbs I still just walked a mile to the train station, and then rode the commuter train into the city for work.

“Anyway, by limiting autonomous cars only to a strictly defined set of routes, a huge number of private cars would indeed become quite unnecessary, and the costs of owning a car would not be justifiable for the majority of people in such a city.

“Some functions, such as trash pickup and mail delivery, would still require human-operated vehicles to operate on the non-automated streets, and some people might need assistance getting from their homes either to the public transit system, or all the way to their destination.

“By this I mean mostly the elderly, the handicapped, and those with large burdens such as furniture or appliances to be moved. However, all these things are special cases, which are relatively infrequent and, again, cities like Manhattan demonstrate that such things can be handled effectively enough.

“So, while there might still be some human drivers in the system for commercial functions like trash, mail, ambulances, and package deliveries, you could probably ban all private vehicles in such a city with large financial savings for all, and very little inconvenience for anyone.

“The joke of course is that autonomous vehicles would just be an expensive way of doing what trains have been doing for 150 years or so.

“The real trick is not technological, but political. All you really have to do is to ban private vehicles in the city, and the rest follows naturally from that one constraint.

“Problem is that until now the auto industry had too much clout to let that happen, which is why it is outsiders like Google, Apple, and Tesla who will be the ones to force a change on the traditional auto companies.”

And it is exactly that political constraint, and the fact that this is likely to be driven by auto industry outsiders, that leads Morgan Stanley to believe that the first trials are likely to happen in “progressive” towns such as Austin, Texas, or Mountain View, California, the home of Google.

The Morgan Stanley analysts suggest a trial in a small area, probably defined by a couple of kilometres squared.

The vehicles would have no driver, no steering wheel, no pedals. Just seats for passengers. And they would be hailed via a ride-sharing app from your smart phone.

The fleets would start small, with as few as 20 to 100 cars and be speed limited – possibly to a maximum of 40kmh to ensure safety. And they would be range limited.

They would be funded by large, highly capitalised tech firms (Google, or Apple, which is investing more in autonomous vehicles than it has on all its other smart devices combines) who can approach such a venture as pure R&D, and where up-front financial losses “would be potentially less than a rounding error.”

Morgan Stanley expects the first cars would be quite over-engineered with redundant safety systems.

“While some autonomous applications can cost as little as $US2,000/car, we expect these first units to be a multiple of the cost of a normal car, potentially hundreds of thousands of dollars including back-end software and development costs.

“Expect such cars to be equipped with a suite of LIDAR, RADAR, encrusted with cameras and sensors driven by a connected super-computer capable of continuous software updates and machine learning.”

Interestingly, Morgan Stanley suggests that there will be minimal to no infrastructure augmentations required of the governing metropolitan area, at least at first.

Once these trial projects are proven, the second stage implementation can occur at higher speeds, larger areas and new routes, such as between transport hubs, and airport runs.

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  1. Alan 4 years ago

    As well as contributing to the energy industry revolution in multiple ways.

  2. DogzOwn 4 years ago

    Road deaths in VIC to be reduced with $340M on wire barriers, pity, better return spent on preparing driverless cars

  3. john 4 years ago

    The worst item purchased by a consumer is the motor vehicle, which is responsible for more deaths from its inception that the world wars. Let alone the horrendous number of serious injuries.
    An item that is sold as a personality extender look at how “smart, wealthy” or what ever I am driving my vehicle.
    Perhaps go look at the energy efficiency graphs it is terrible.
    Being able to just click a travel from home to destination at minimum cost is how this should pan out.
    For longer trips there is in no reason that movement can not be automated to ensure a smooth trip by removal and renewal of the energy pack.
    The mention is made about Google spending money, how about Apple spending more money on this than they ever have on any of their other ventures.
    So the take out is that the companies with vision will take the market away from the incumbents rather like Singer like the wood stove like Kodak like Stanley Steamer like IBM.

    • DevMac 4 years ago

      I believe this article / rant sums up cars quite well: http://www.mrmoneymustache.com/2013/04/22/curing-your-clown-like-car-habit/

      • john 4 years ago

        Yes he has a bit of rant true and is a bike rider well done him.
        Actually if towns were designed correctly it would be user friendly so paths for bikes or small EV’s could use them to services, however towns were never designed they just fell on the map like a upended plate of spaghetti.

  4. DevMac 4 years ago

    An interesting thing I’ve noticed when discussing EVs is the number of people who tut-tut regarding how quiet EVs are and the danger this poses to the pedestrian. I find it very strange that they consider the lack of a by-product of the internal combustion engine to be detrimental and dangerous.

    It’s a perfect example of the irony that is the natural evolutionary traits of humanity holding back the progress of humanity.

    • trackdaze 4 years ago

      I think regulators have required evs to add artificial noise at low speeds to counter this. above a certain speed tyre and wind noise is sufficient. with forward collision avoidance systems now widespread one wonders if they will drop this.

      Counter to this many are now calling it forward collision mitigation which is in keeping with the fact that only 70 % of crashes are successfully avoided.

      • DevMac 4 years ago

        It will be interesting to see whether that 70% value improves as the percentage of human drivers decreases (my kids can report back on that in 20 years’ time…)

        @john and trackdaze
        Artificial noise as legislated requirement? What an enlightened age we live in…

        • Mike Jubow 4 years ago

          Maybe, in the cities, we will have to have someone walking in front of the car waving a red flag and ringing a bell to warn pedestrians??? I seem to think I have heard of something like this happening before, haven’t I?

    • john 4 years ago

      That has been looked at a vehicle noise emitter is enabled to allow people to hear the vehicle.

  5. trackdaze 4 years ago

    Vehicle sharing been around for years its called the bus.

    • DevMac 4 years ago

      The NYC Subway is also mentioned in the article.

      The way I see it, autonomous cars will augment existing public transport infrastructure by removing the need to park your own car at a station. The autonomous cars / taxis can be like tributaries feeding the river system. In this analogy it’s likely the various river systems will need upgrading.

      • john 4 years ago

        True the autonomous transport device takes you to the station the autonomous takes you from the station to your destination.

      • trackdaze 4 years ago

        The new bus would be one were I subautonomously drive to a station enter my destination by voice and wait (not long) for a pilot vehicle and others to join. V2v communication would mean I could hands free get to the closest destination. And either park me if because I’ve nodded off due to boredom or allow me to drive to the distination.

  6. Simon 4 years ago

    “General Motors Co. and Lyft Inc. within a year will begin testing a fleet of self-driving Chevrolet Bolt electric taxis on public roads

    “Details of the autonomous-taxi testing program are still being worked out, according to a Lyft executive, but it will include customers in a yet-to-be disclosed city. Customers will have the opportunity to opt in or out of the pilot when hailing a Lyft car from the company’s mobile app.”


    So, how long before Uber does the same thing?

    And then this is planned for Singapore in 2018 – “The taxis would come at the touch of an app, automatically arriving ready to whisk the rider away. Iagnemma said he hopes to have a fleet of self-driving taxis on Singapore streets in 2018.” http://www.bostonherald.com/business/business_markets/2016/05/autonomous_taxi_startup_hits_the_gas

  7. Axl D 4 years ago

    The other huge inefficiency in owned cars vs. shared cars is that owned cars have an empty boot and 3 to 4 empty seats on most journeys. Shared EV/AV’s need only provide the capacity for a particular journey – one or two seats. The boot itself could even become an AV in its own right, used only as needed. Shared SUV’s will only be used on weekends by enthusiasts.

    • hydrophilia 4 years ago

      Interesting idea.. This would allow for much smaller vehicles, better utilizing existing infrastructure, rendering much of it superfluous. Sounds reminiscent of the Aus grid, but reduced usage should not create the call for demand charges, just relief at reduced congestion…

  8. Mark Roest 4 years ago

    This is a very top-down, anti-democratic approach, which is entirely unnecessary. Instead, choose a larger area, which allows vehicles to make a difference beyond walking or bicycling range, and which is not served effectively by transit systems. Make it voluntary to use a car or not, so that people at the low end of current income, who still have cars, can continue to use them, and other people, who prefer isolation and control, can do likewise. Make the prices low enough to beat the cost of owning and operating a car, and don’t be so pessimistic about when the price of batteries will come down a lot more. Look at the statements from Tesla and LG Chem about pricing, and realize they have competitors, as well.
    Don’t assume this must be done by a large corporation. It can also be done by a medium to large cooperative — we don’t even need to wait for Mondragon to step up, but that would be a good possibility. It can also be done by a small group of friends whose schedules are complementary enough, and by people who find each other through open source algorithms on the Net. Social is here, and many people live by it.

    • DevMac 4 years ago

      I had the thought that an ‘autonomous vehicle aggregator’ would sprout and give you the cheapest option for your specific A to B trip. Rather than always choosing Uber or Google or Autonomy Cars X every time.

      Additionally, with more autonomous cars on the road it would be safer to ride a bike. I avoid riding a bike on my short distance to work because of having to navigate a couple of highly trafficked roads, and I just don’t trust other drivers.
      I believe it will be a ‘turning of the screw’ style change whereby it will get progressively more expensive to maintain the status quo. People will want to make the most of the investment in their current car and enthusiasts will want to continue to drive themselves, but in time the financial gain / penalty of not moving forwards will force them to move forwards, or it’ll take generational shift.

      When I first heard of Uber as “ride-sharing” I thought it was based on “complementary schedules” as you describe it (organised car-pooling). That would have been better I think.

      • hydrophilia 4 years ago

        Using bikes will certainly be far safer and, probably, more common: nice side effect!

  9. Ian 4 years ago

    These people are narrow minded of a car’s functions. They see it as a transport device and nothing but a transport device. For others the car has other functions, be it for leisure, or freedom of movement, or status . Would Morgan Stanley want to take away the last vestige of freedom? Too long the private car has been abused as a means of commuting to work and back home again, a very automatic and invariable process, so by all means automate the commute but leave other aspects of car ownership alone!

  10. hydrophilia 4 years ago

    Fascinating implications…

    >will battery packs be far smaller? Let’s say most trips are only ten miles or less and, for longer trips, cars can run a “relay race” or swap batteries or specialized long-haul vehicles might get called in. This would tie up far fewer raw materials and less $ in the fleet…

    >with more people per car or smaller cars per rider… and with cars running closer together since autonomous cars reacts faster than humans… will our roads have more capacity? Will it help congestion, reducing energy usage and the need for expensive (road) network upgrades and repairs?

    >will housing near busy roads become more valuable and desirable as noisy, smelly, dangerous human-controlled IC vehicles are replaced by light, quiet, safe autonomous electrics?

    >will the resources freed-up by this revolution create a drop in demand and price? Perhaps everything from oil to steel…

    Interesting times!

  11. neroden 4 years ago

    In rural areas I think cars are still going to be owned. Yes, they have very low utilitization. But the time it takes to summon a taxi or shared vehicle to your remote, rural house is enormous, and nobody wants to wait for that, so people will have a car in their garage or driveway. Cars are *great* for rural areas.

    Urban areas are a different matter. Cars don’t make any sense in cities.

  12. Moosey 4 years ago

    Where is the money to pay for roads going to come from?

    • Barri Mundee 4 years ago

      From GPS tracking I suspect, paying on a per KM basis?

      • Moosey 4 years ago

        They could already do that now with any vehicle on the road, but they don’t?
        Why is that?

  13. Mark Melocco 4 years ago

    As a long term member of a car sharing service and an owner of a fully electric, semi-autonomous car, you might expect that I would fully support the model proposed in this article.
    Actually I do not, as I am also a car enthusiast and I would hope that there is some space for my desire to own a vehicle for the pleasure it gives me, just the same as someone may wish to own a boat that is used even less regularly. Also you could say that horses are probably not of any practical use in terms of personal and or goods transport anymore, but people still wish to own them and use them for such purposes even now. So where do we draw the line?

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