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03.06.2015

Why Self-Driving Cars Will Not Have Steering Wheels

Warum selbstfahrende Autos kein Lenkrad haben werden

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Self-driving cars are pushing into the market—and they will change entire industries. Naturally, taxi and bus operators are affected by this, but that is not the exciting point. Self-driving cars will change hotels, the restaurant industry, and logistics, and will lead to new business models for HR specialists, super markets, hair stylists, and therapists, to name a few. The reason: The self-driving car of the future will not copy today's cars, but will be designed for new forms of use. Find out below who is driving this development and how your industry will be affected.

Use the online form at the bottom of this page to download the trend analysis free of charge as a PDF document.

 

Why Self-Driving Cars Will Not Have Steering Wheels

 

Self-driving cars are pushing into the marketand they will change entire industries. Naturally, taxi and bus operators are affected by this, but that is not the exciting point. Self-driving cars will change hotels, the restaurant industry, and logistics, and will lead to new business models for HR specialists, super markets, hair stylists, and therapists, to name a few. The reason: The self-driving car of the future will not copy today's cars, but will be designed for new forms of use. Find out below who is driving this development and how your industry will be affected.

Self-driving cars: The technology is poised to make its leap into the mass market. While a few hurdles still exist, the necessary technology is essentially available now. At present, sensors are still too expensive, but trend researchers expect partially self-driving cars to become part of everyday life no later than 2020, and not only top-range models, but smaller cars as well. Between 2025 and 2030, fully self-driving cars will also become a common sight. The topic has already become an established part of public debate: Yes, on the highways of course, at average speedsthis people can accept. They would add, however, that the driver still has to have the ability to grab the wheel. Why? Because of ethical questions. Who is responsible when an automated vehicle causes an accident? This is the typical tune of dozens of articles and special publications.

Current debates on the topic are almost completely shaped by fascination with the technology and thus are in good company with the dream of human flight and later space travel. These topics do not arbitrarily share the same aesthetics, even if the basic technology of today's compact cars - even those without cutting-edge assistance systems - is considerably more powerful than the technology used to bring humans to the moon (or probes to Mars).

Self-driving cars will comeand when they do, they will change business models and entire industries. However, present perceptions of autonomous cars, tied with fascination with technology, are poorly focused for the actual driving factors behind this development. It is precisely these factors, however, that give the decisive indicators regarding what consequences autonomous driving will have for the mobility, living, and working environments of the future, and which business models it will thereby change...

...like yours, perhaps? Those who merely smile cloyingly at Google's Bubble Car obstruct their vision of the challenges that the technology of autonomous driving will bring. No one will buy a self-driving car in order to use their phone or speak to fellow passengers while driving: The passenger seat is usually empty, anyway, and phone use while driving has long been commonplace. No one will buy - let alone build- a self-driving car for these reasons. What, then, are the driving factors behind the development of self-driving cars? What determines supply and demand? The person who understands these things will be able to predict whose business models are actually at risk here.

 

The human operator as safety risk

 

On this point, the debate about self-driving cars actually does reflect the relevance of this innovation. The closer the possibility comes that the human being at the wheel will become irrelevant, the more intensely emphasis will be placed on the significance and performance capabilities of the human driverand often even exaggerated. This is a defensive reaction at a point where human intervention is actually the main safety risk in the car. A car is heading to hit you when a child runs into the street, and you have no time to stopwhich accident are you likely to choose? Situations like this one are gleefully presented in order to illustrate the difficulties of autonomous driving. Which choice would car companies program into their vehicle's computer?

In actuality, however, the above example proves the opposite. Can we seriously assume that a human being would make an ethically informed decision - without warning, with no time to reflect, as a spontaneous reflex - and would avoid the greater loss in the end? While he is also busy dealing with his children in the back seat, operating his navigation system, singing along with his favorite song on the radio, yawning, sneezing, or laughing together with the person sitting next to him? Even with today's technology, automated intervention is faster, the vehicle brakes more powerfully and steers more precisely than a human being, and would cause less damage than its human driver (especially independent of his need to choose between two bad situations).

Additionally: The autonomous driving system would be much less likely to bring the vehicle into this kind of situation at all. Just as in the past, excessive speed is the number one cause of auto accidents, especially in urban trafficthis will end with autonomous driving. And what's more: Self-driving cars will naturally have the ability to communicate with one another. They will form networks and inform each other about traffic problems, temporary construction sites, and potholes, and in the threat of real emergency can warn each other directly. In the above-cited example, a self-driving car would have already caused the other vehicle to stop before you as a driver would even have moved your foot to the brake pedal.

The debate about whether it is ethically more responsible to avoid collision with oncoming traffic or with a child on the road is, of course, worth having. What's to stop us from doing so? And, even if there is no perfect answer, the self-driving car will be able to decide and react at least as well as a human driverprobably much better, actually, and almost certainly never worse.

In recent decades, traffic safety has increased by leaps and bounds everywhere where human influence has been limitedsuch as through assisted-driving systems. In 1950, more than 7,000 people died in West Germany. Today the number for all of Germany is less than half, and this with more than fifty times as many cars on the streets. Today, the safety levels of the 50s, when traffic safety was almost entirely dependent on driver carefulness, would wipe out an entire major city every year.

 

The innovative leap: autonomous vehicles

 

In past years and decades, industry has spent much effort developing technologies that compensate for the shortcomings and failures of human driversfirst as an extra in luxury cars, but later as a standard component even of compact vehicles: Power steering and power brakes make precise steering easier; emergency-brake assistants improve drivers' often insufficient braking power; fatigue recognition systems use biometric analysis to advise drivers about when to take a breaknot to mention distance alert systems, lane-departure warning systems, traction control systems, and rear-view cameras.

None of these technologies can completely overcome the limitations of human operation, but they do considerably expand the limits of the possible. The sobering conclusion: The capabilities of the human driver are limited today as in the past, and the driver remains the number-one risk in the vehicle. He is the weak link in accident-free car control. He is also, despite the opinions of a few aggressive drivers, the greatest obstacle to reaching his destination sooner.Why? He can only drive when he is awake and fit to drive, and vehicles that can communicate collectively are always faster in heavy traffic.

This is the real quantum leap of autonomous driving: Abandoning the goal of constantly trying to make humans better drivers or continually trying to better aid human vehicle control. This step opens up tremendous new possibilities for automobile developers and manufacturersand thus for all affiliated industries as well. For the first time in many years, technology has become redundant, which will save effort, costs, and vehicle weight. And this is no triviality, as especially the reduction of weight has long since found itself att he point where even the smallest improvements come at high prices. In its new flagship model, the 911 GT3, Porsche is building a ceiling of magnesium for savings of...a whopping kilo. Every gram here is won at high costs.

The intentional omission of parts in this area is opening the opportunity for noteworthy leaps in development for the first time in years. The same goes on the side of costs: Suppliers have long been complaining that the big auto producers have rejected the development of additional parts and features with reference to added costs of only a few cents. Even if VW hopes to reduce production costs by hundreds of millions through a savings program borne by its employees, optimization is finally reaching its limits in the industry.

According to automobile manufacturers, this breathing room is one of the real drivers behind the development of self-driving vehicles. Thus, any belief that the self-driving car of the future will still come equipped with a steering wheel and gas pedal has not been thought out. In this regard, Google's apparently unusual Bubble Car is much closer to the future than the retroactively automated A7s and S-Class cars currently featured at trade shows and test tracks. The self-driving cars of tomorrow will look unfamiliar at first, and they will also be oriented towards new goals of use and thus change our business models.

 

Mobility as a Service

 

In the interconnected everyday life of today - and even more in that of tomorrow - mobility is taking on a central role. Just as the software industry has long pitched software as a service, digital service is moving more and more into the forefront in the area of mobility. Service is replacing ownership. When booking and tickets for planes, trains, buses, and taxis, when navigation systems, addresses and calendars are all on your smart phone anyway, who needs to integrate a car here? Today's users of DriveNow and comparable car-sharing services take this as a given in any case. This is one key driver for the networking of carsand the autonomous car in particular offers more far-reaching opportunities for integration into private digital mobility constellations.

There is another factor that makes the idea of inter-connected vehicles attractive from the customer's perspective: The networked car is adaptable and can integrate functions at a later point which were not part of its programming at the time of delivery. In short: The networked car will be adaptive. Even today, Tesla is advertising an expanded range of autonomous vehicle functions that will not be available for use in its cars until some months in the future. The company also promises that even the cars it is selling today will receive these functions later as a wireless update.

With this adaptive functionality, the connected car fulfills the key customer requirement of digital business: It is individually tailored and remains changeable over time. Our experts expect this customer expectation to affect virtually all industries in the future. Customers will look for adaptive products, and will receive precisely such offerings thanks to the spread of digitization into more and more areas of life. The poles of this dynamic reinforce each other mutually.

Better safety promises financial benefits, declining insurance fees, and largely eliminated repair costs. Increased comfort and greater time saving are also likely to play a role here. The most important driving factor from the customer side, however, is - at least in the initial phase - the need for differentiation. In a digital society where everything is available quickly everywhere, differentiating characteristics become anchors for one's identity. The self-driving car visually demonstrates the customer's uniqueness and expresses a certain attitude. This attitude goes far beyond a boastful "I can afford it," and shows another way of using resources, time, and data with the interconnection of everyday life (and indeed of all of life). The self-driving car offers a certain distinction for its users, a rarity in the digital world.

 

The new business models for self-driving cars

 

Will these vehicles first appear on the market when every conceivable technological or legal hurdle has been removed? No. Self-driving cars will not only replace cars as we know them today. Providers will attack familiar brands with new products and new business models. We are convinced that, in many cases, they have bright prospects.

Of course, the obvious things are true: Taxis and the entire transport sector will be affected, from taxi drivers to their trainers and suppliers all the way to the corresponding associations. The industry is also facing massive pressure from aggressive competitors not afraid of the unique nature of that regulated market which protects business models no longer able to survive on their own. Taxi drivers will come to wish the return of Uber when they begin to understand that self-driving cars are able to operate tirelessly 24 hours a day, seven days a week.

The next Uber, however, will no longer aim for the taxi business. That market, while media-inclined and therefore friendly to innovators looking for publicity, is too small in the end. The next Uber will attack the logistics sector. The problem has already been solved of how the trunks of parked cars can be used as delivery stations for packages. Automated collection and delivery, including secure remote opening and locking of the car trunks is currently being tested in practice. The result: you have a package station every few meters.

Self-driving cars go the decisive step further at this point and are capable of driving to the customer on their own. This creates the fine-tuned network needed to make the low-cost and highly precise delivery of perishable groceries possible for supermarkets. Package services, pizza delivery, Ebay traders...the list of potential users is easy to imagine. Not one of these providers would need to acquire its own vehicle at this point. Autonomous cars offer their owners the potential to join together as enormously powerful peer-to-peer networks.

Thus the two previously dormant points of potential for the common car can be actualized: unused space and unused time. While its owner is busy working, sleeping, or at the fitness club, his car is on the road autonomously, taking care of jobs for others and thus paying for itself. These are all of the ingredients that are necessary for successful business models. Here lies space and opportunity for all kinds of attackers in the logistics sector. Thus this industry is also taking another step in digitization: Owning hardware for the provision of successful and attractive logistical services is no longer needed. Business is becoming software.

 

Stationary services become mobile

 

Don't believe anyone who tells you that self-driving cars will finally give you the chance to read while driving. This might be worth pursuing culturally, but no one will invest in it. Self-driving cars will offer new services which will make previously stationary solutions mobile. The hotel industry will soon face new competition: self-driving cars that drive customers to their destination over night, where they then arrive well-slept. Of course, this won't work with a converted VW Golf, but it will work with optimized vehicleshotel rooms on wheels that flexibly join together in convoys and separate as needed, like a night train on the highway and a private car at departure and destination.

New service providers will offer frequent drivers their own solutions, and larger companies will maintain their own fleets for field work. Nearly every leasing model in today's company-car landscape will also join in hereeven if only for one night. Savings in overnight accommodations alone make this business area attractive. Hotel-chain operators will look into inte-grating these services in their stationary models and maintaining classic hotels as part of attractive combination packages.

Other services that are stationary today will follow, from therapists who work during the drive to the office, to insurance agents and banks, to all kinds of consulting services, all the way to hair stylists and mobile restaurants: "Drive-in" and "coffee to go" will become DWYD: "Dine While You Drive."

Outfitters may also set new standards for individualization. A car that is no longer optimized around the artificial situation of driving offers entirely different possibilities to present outfitting for "living on the road." Just as it is natural to decorate your house seasonally and to make it more modern at certain intervals, the furnishing of tomorrow's cars will become personalized and flexible (i.e., adaptive). For why would the driver of the future have lower requirements for personal furnishing there than for his stationary living area, the classic living room? Especially when both spaces are used for the same amount of time each day?

Mobile service providers will also transfer their need to furnish stationary trade shops to the mobile world. The continual renewal of interior decoration for self-driving cars is a rapidly growing field for furniture manufacturers, retailers, commercial decorators and interior designers. This is good news for many of today's workshops and roadside assistance services who will need a new foundation for their businesses in the face of drastically reduced vehicle damages.

What counts as style and individuality here will be transferred to the expectations of the customer of tomorrow concerning the entertainment systems on board. Because the lifetime of a car model clearly exceeds the innovation cycles of consumer electronics, it is even easier to see how important the ability will be to redecorate/reequip vehicles without consider-able costs after use

Finally, self-driving cars will change our working environments. Among other things, they will offer the opportunity to begin the working day directly from the driveway. Thus the proportion of work time during waking hours will instantly sink. As early as the late 80s, Porsche advertised its vehicles with the slogan:"Take longer for breakfast, and be back earlier for dinner. Can you find a better family car?". What sports cars promised back then will be delivered by self-driving cars tomorrow.

Yet even more, the networked self-driving car offers the opportunity to take on other jobs: working hourly at the customer service center of another company and taking care of open tickets or conducting telemarketing and digital office services are a few examples. Every job that can be done with a telephone, a laptop, and an internet connection can also be done in the car.

The term "job nomads" will therefore gain a new meaning. As commuting workers, they will be bookable for various services, leading to the shifting of these out of offices and literally onto the street. This separation of tasks will change the average workday on both sides, for what will be left to do at the office? Also, one thing is true here as well: Those who takeover control here and can flexibly combine supply and demand will have the best chances for successful business models. To this end, the recruitment agencies of the future will divide tasks and labor into very small components and combine them as modules, offering temporary work in quarter-hourly blocks.

New opportunities for recruiters and logistics specialists, restaurants and hotels-and of course also for what we call "taxis" today: These are the real drivers that will bring self-driving cars on our streets even in a few years' time. Perhaps some of these will indeed offer a steering wheel as a nostalgic extraeven if it's just a decoration...

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