Business models will drive the future of autonomous vehicles



“The technology is essentially here… We have machines that can make a bunch of quick decisions that could drastically reduce traffic fatalities, drastically improve the efficiency of our transportation grid, and help solve things like carbon emissions that are causing the warming of the planet.”

Interestingly, this statement didn’t come from a futurist like Elon Musk or Mark Zuckerberg or Jeff Bezos; this was President Obama discussing autonomous vehicles in an interview with WIRED last fall.

Over the last year, we have seen many groundbreaking announcements regarding autonomous cars, from companies like Ford promoting its autonomous vehicle leader to the position of CEO, to Tesla’s NHSTA investigation showing a 40 percent decrease in accidents with Autopilot enabled and Audi beginning mass-market sales of a “Level 3” autonomous car.

Nevertheless, many questions in the world of autonomous vehicles remain unanswered. How will autonomous cars make ethical decisions, as in the case of the “trolley problem”? How will cities, streets and parking change? What will happen to the millions of people employed as ridesharing drivers or long-haul truck drivers? What is the right package of sensors to drive autonomous vehicles?

We believe that many of the open questions about autonomous vehicles will be answered not just by technological innovation but by the emerging business models around autonomous vehicles. For example, if regulators decide to tax autonomous vehicles based on miles traveled within a city, there will be different incentives for vehicles to stay close by to maximize trips and minimize costs. If car companies decide to sell cars directly to fleet operators instead of consumers, they will allocate marketing and research and development dollars differently.

There is no better indicator for how companies will make decisions across many technology, business and societal questions than their underlying business models and profit motives.

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