I have made my professional career about technology adoption. You know, that wonderful knife-edge transition when consumers go from ‘Are you kidding me?’ to ‘I gotta have it.’ Perhaps the technology itself goes from an over-priced R&D experiment to that impulse buy item at the grocery check-out line on the hook right next to the mints.
When real autonomous driving systems (Level 3, 4 and 5) are rolled out, there will be no free lunch when it comes to risk and return. While pundits grapple with assessing the technical readiness of autonomous cars and survey the nascent consumer’s acceptance, we must not overlook that horribly inevitable middle ground. Sheer risk will determine where they are applied in numbers, not the consumer nor the technical solution itself.
That’s right. The industry scrambling to make vehicles that drive themselves is more actuary than autonomy.
If you look at the table shown, you will see four different commercial opportunities sorted by the dimensions of Urban, Rural, Premium and Affordable markets. Demand for this technology will be highest in urban settings with more people that have to move about. Since premium buyers are a minority, the largest market opportunity for autonomy is in the lower left Affordable-Urban quadrant, the same environment where the risks are highest.
When I say risk, I mean the inherent risk of a car getting it wrong, while the human-machine interaction is the most chaotic. Empty roads are easy but show me an autonomous car at a busy street corner in an international urban center and I will show you a car with a bank of sensors nervously waiting all day for the path to clear from jaywalking pedestrians.
The demand I speak of in this chart is mass market demand, not the passion of an individual to buy. This technology costs a lot to develop so technology providers are happy that a few people are excited to pay money for Cadillac’s SuperCruize or Tesla’s Autopilot. However, the tech providers are really waiting for the day mass adoption will cover the bills.
So, if the roll out needs to avoid risk why not go to the Rural-Premium or Rural-Affordable markets? Because demand will be low for those services. I would love to take a ride-share car without a chatty driver more than sitting behind the wheel for hours or placing my calendar in the hands of a transit bus or train. Unfortunately, there aren’t enough of us early-adopters living in rural markets to cover the costs.
The industry is coping with this dilemma one ‘use-case’ at a time. How do you reduce risk in the adoption of these systems? You engineer the circumstances as well as the car’s system. That is why every OEM, Tier 1, software and sensor company loves college campuses, industrial complexes and gated communities. If you control the environment, you reduce variables. Fewer variables means less risk.
So how will autonomy roll out in mass markets? That’s easy to predict when you follow the risk. Look for those situations or ‘use-cases’ that favor low-speeds, local geo-fenced markets, vehicles with set routes from A to B and back again, climates that don’t impede the sensors, trained occupants, etc.
To all of the autonomous car developers, tech junkies, fans and curious on-lookers, this is an article about disappointment. Sorry. Progress in autonomous vehicles will not be made in the sexy and splashy headlines. The scaled advancement of autonomy in the public will be made by the most boring fleet applications going to the most boring of places and back again. We should all tip our hats to them.
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