Gauging the disruptive power of robo-taxis in autonomous driving

The self-driving taxi could ultimately take the global auto industry on a wild ride. Our use-case approach reveals why.

Personal mobility could change profoundly in the next two decades. Consumers, who increasingly view mobility as a service, want more choices for traveling between points A and B, including ride hailing, car sharing, and perhaps even self-driving “robo-taxis.” For automakers, the proposed changes could replace the industry’s traditional emphasis on “moving metal” with new schemes to capture greater profits per mile or per trip. The focus may even expand from monetizing new mobility models to monetizing the time consumers spend in vehicles.

Autonomous vehicles (AVs) could play a key role in this transformation. But the industry tends to view the phenomenon mainly through a technology lens, which, while important, only addresses part of the challenge. Industry discussions often focus on autonomous-driving levels, such as the Society of Automotive Engineers’ conditional, high, or full-automation specifications (SAE levels 3, 4, or 5, respectively). However, automakers also need to fill in several other gaping holes to understand autonomous-driving issues fully. That requires an ecosystem approach (for more on broader shifts in the landscape, see sidebar, “Measuring the robo-taxi’s disruptive potential across automotive trends”).

Unlocking the AV ecosystem via use cases

Building a successful AV ecosystem requires four perspectives. The first centers on the technology involved: What can it do now, and how soon will it be able to do more? Regulation comes next: How will it and associated policy-making initiatives create opportunities for deployment? Third, the customers: Who are they, and how willing are they to use the product? For example, from a total-cost-of-ownership (TCO) perspective, will consumers still buy private cars when AV taxis become commonplace, or will they switch to this new mobility option? Fourth, the business case: Is it profitable and sustainable? In other words, will shared robo-taxis disrupt today’s shared-mobility market?

Use cases can also help regulators understand how policies might have to change in different situations. For example, in a “geofenced” area (one where the AV cannot leave the area), a private AV might face different regulations than an L4 robo-taxi. Similarly, an L4 robo-taxi operating in a city may face different regulations than an L4 interstate truck, even though both meet the same L4 readiness standards.

The use case–based framework (Exhibit 1) enables businesses to understand the underlying technology needed, the focus of regulations, the customer, and the impact on future value pools and go-to-market strategies—all elements of an AV ecosystem.

Exhibit 1
four dimensions of use-case framework for autonomous driving: what is transported, where can vehicle operate, who owns vehicle, what technology is used