When the great grandson of Henry Ford says that future of auto manufacturing and marketing will soon be shifting seismically, you’d better pay attention.
Bill Ford, Jr., Ford’s chairman and great grandson of the founder of the mass-production automotive industry, says that Ford and its rivals will look quite different in the next few years. Instead of just producing and selling cars, they’ll be adding automated mobility services more each year.
Safety has been the top issue of concern for automated, self-driving vehicles of the future, with the idea that human frailty could be taken out of the equation and collisions and highway fatalities would be reduced dramatically.
There’s also the idea that consumers will own fewer cars and drive less miles as rides are shared using mobility services from Uber and Lyft and carsharing from Maven and Zipcar.
Now with automakers joining into the game through significant investments in mobility subsidiaries and alliances – and testing out autonomous vehicles – a consensus is emerging that ground transportation will be shifting historically in the near-term future.
What are market analysts and academics saying about the potential future of gasoline and diesel consumption within this context?
In May 2014, Google displayed a prototype of its self-driving car, and more was revealed on the technology company’s autonomous road testing that started in 2009. That kicked off a wave of media coverage, studies, debate, and announcements from automakers, suppliers, and Silicon Valley tech giants like Apple.
By the next year, the hot topic was Uber and how it was poised to drive taxi and black car companies out of the market; and how competitors like Lyft in the U.S. and Didi in China were competing hard with Uber to gain more riders and expand their ridesharing services globally.
Riders, mostly in their 20s and 30s, started taking Uber and Lyft rides in the past five years at first for social outings and later to get transportation for multi-functional activities like going to college and picking up their car at a service garage. Many had never even taken a taxi ride before and didn’t feel like they’d missed much.
Older riders became spoiled by the fare being about half what it would be on a taxi ride, with car owners providing their own vehicles without having to pay commercial licensing fees that other transport services are required to comply with. Taxi drivers and operators were hard hit by demand shifting over to Uber and Lyft, with much pressure being placed on regulatory agencies.
Attention was raised even more last year when Uber began testing out self-driving cars in Pittsburgh, California, and Arizona. Related: There Is No Such Thing As Peak Oil Demand
Last year, global automakers plunged into the game through investments and subsidiary startups. Examples include Volkswagen starting up its Moia mobility service division, and General Motors launching Maven carsharing and investing in Lyft.
Fiat Chrysler Automobiles entered the game last year through its partnership with Google’s Waymo self-driving car division. FCA will provide the Chrysler Pacifica; Waymo will automate the self-driving vehicles and may offer a mobility service with the Pacifica minivan.
Market analysts have been speculating on what all of this means for vehicle production, fuel consumption, and emissions.
A report by consulting firm McKinsey & Company painted a roadmap with autonomous vehicle deployment being done in phases and taking several years. The report predicts vehicles will become increasingly autonomous over the next 20-plus years with fully autonomous vehicles becoming common by 2040.
There’s been a lot of debate over whether vehicles should be allowed to operate soon in fully autonomous mode, with safety concerns being raised by a fatal Tesla crash last year of a driver using its semi-autonomous Autopilot feature.
A report by Center for American Progress released in November says that it could go either way. No one can really predict how automated cars will impact total vehicle miles driven, traffic congestion, and efficiency of the vehicle.
Experts, including auto executives like Bill Ford Jr., predict that the next quarter century will see a lot of changes in crowded urban environments – less parked cars, traffic gridlock, and air pollution. Some of that will be transforming through how cars are used. Automakers are taking it seriously enough to invest capital in carsharing and ridesharing services, with much of it being automated – such as “robotaxis.”
The Institute of Transportation Studies at the University of California-Davis just released results of a survey in conjunction with a new policy initiative, “Three Revolutions: Sharing, Electrification and Automation.” The survey was taken by 40 policymakers, researchers, and representatives from government, nonprofit organizations, and the automotive and technology industries. Related: Shale Drillers Hedge, Putting A Cap On Any Oil Price Rally
Of the survey respondents, 80 percent believe firms offering shared rides will account for more than 5 percent of all U.S. passenger miles by 2030; while 78 percent of the respondents think this trend will rise to more than 20 percent by 2040.
About 10 years later, 70 percent of the survey respondents expect to see zero emission vehicles – all-electric, plug-in hybrid, and fuel cell vehicles – making up the majority of vehicles used by carsharing and ridesharing services.
For now, Uber and Lyft drivers may be consuming even more fuel than they were doing about five years ago. An informal survey last year of drivers found that 50,000 miles per year has become the norm. That’s about three times the national average of miles driven for car owners.
One trend that’s expected to take cars off roads and reduce fuel consumption is growth in shared rides. For Uber, that comes through customers using the UberPool shared ride option, which lowers the fare but does take longer to get from Point A to Point B. Lyft offers the same service trough Lyft Lanes.
Last year, an Uber executive said that shared rides was only making up about 20 percent of total rides for the company.
That’s on a global scale. Uber and Lyft have reported much higher numbers for a few cities like San Francisco and Los Angeles. Riders seem to enjoy saving money and having the social time. They also enjoy not having to drive in heavy traffic and then facing the hassle of having to find a parking space.
Autonomous, shared rides do appear to be the wave of the future. As for the next 25 years or so, it looks like mileage and fuel consumption likely won’t be altered drastically by the new technology and mobility services.
By Jon LeSage for Oilprice.com
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