Will self-driving cars kill auto portals?

Brihony Tulloch

March 28, 2017

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The future? Photo credit: Shutterstock

 

 

 

With self-driving cars predicted to be available for sale commercially in 2020 it makes automotive portal owners question where their businesses will fit in the future. If ride share services use fleets of autonomous vehicles, will this kill the idea of private car ownership altogether? It raises the question; what use are automotive portals if the buyer is no longer buying?

Big names like Google, Uber and Bosch are working towards putting autonomous vehicles on the road. But when they arrive, they won’t be just making waves in the auto industry, but into the auto portal industry as well. If ride share companies like Uber, Uber Share and Lyft use fleets of self-driving vehicles, it could eliminate the need for private car ownership. Consumer’s may no longer be willing to outlay money for a car when they have the option to order one with the touch of a button.

Scientist and engineers started developing pre-cursor programs for self-driving cars as early as the 1930s. These days almost every OEM is involved in manufacturing or developing self-driving vehicles. It’s also opened the door for auto tech start-ups like TriLumina, Quanergy and Zoox to make their mark on the industry. According to CB Inisghts, funding for auto tech start-ups doubled in 2016 to over $1  billion.

There’s no denying self-driving cars are going to make a huge impact on the automotive industry and disrupt long-held ideas about how consumers own and operate vehicles.

One of those core ideas is car ownership. Uber already offers a car pool ride-share service called Uber Share. In February this year, Financial Times reported that Uber and Mercedes Benz have struck a deal that allows the manufacturer to offer a fleet of self-driving vehicles through Uber’s app. Mercedes parent company Daimler offers some of the most advanced automated vehicle technology on the market; its Mercedes E Class saloon model is available to drive itself on highways.  As part of the deal, Daimler will operate the vehicle network while Uber will retain control of the network of passengers. Chairman of the board for Daimler Dieter Zetsch said in a press statement that the partnership with Uber represented the future of the automotive industry.

“Together with Uber, we seek to combine our strengths,” he said.

It’s clear that the option to order a self-driving vehicle will soon be an alternative to owning your own vehicle. Without the demand for private car sales, this begs the question – where do auto portals fit in the future?

 

A level 6 self driving car. Photo credit: Shutterstock

 

 

 

According to a 2016 report by US data company McKinsey & Co, full autonomous vehicles are likely to become available commercially after 2020.

McKinsey’s report claims we are already seeing a decline in car ownership:

“In the United States, for example, the share of young people (16 to 24 years) who hold a driver’s license dropped from 76 percent in 2000 to 71 percent in 2013, while there has been over 30 percent annual growth in car-sharing members in North America and Germany over the last five years.”

They believe this will result in a market emerging specifically for e-hailing services and self-driving vehicles. By 2020, autonomous vehicles will account for up to 15% of the cars on the road.

Similar sentiments are echoed by Dr Charles Karl from the Australian Road Research Board. As the organisation’s National Technical Leader, he has a keen understanding of how autonomous vehicles are going to reshape the industry and automotive portals. But the change may not be as dramatic as some people might think.

“We started off with manual cars and then we had automatic transmission and then cruise control and now we are seeing more automated features in cars that we can buy,” he says. “Right now you can get about 12 brands with these sorts of features”.

Karl believes that manufacturers and portals will simply be adjusted to self-driving cars being sold commercially, the same way they have adapted to offer vehicles with automatic transmission or adaptive cruise control.

“Take CarsGuide for example, I feel in the next five to ten years there will be a lot more differentiation on describing the automated features in the fleet. So when people go onto a portal they won’t just be looking for leather seats…they’ll look for cars with those features,” he said.

“At the moment cars are not sold online with information about automated features, but I think over the next three or four years these features will become an optional add on every time.”

In other words, selecting a self-driving vehicle will become a natural part of the car buying process.

“There will be more visibility and interest in automated features in cars,” Karl added.

It’s impossible to know exactly how automotive portals will be affected by self-driving vehicles, but there is definitely change on the horizon.

As Dr Karl highlighted, “No city around the world has an answer yet, but it is likely that the mobility model will be customised to each place”.

Brihony Tulloch

March 28, 2017

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Acerca de Lucas Vargas:

  • Empezó en Grupo ZAP como el VP de Sales y en 2016 cuando la empresa tenía 60 empleados. Fue nombrado COO de VivaReal tomando el mando de Brian Requarth el Co-Fundador. VivaReal lanzó en Colombia y se trasladó a Brasil. En 2017 se hizo CEO del Grupo ZAP.
  • Ha trabajado en Mexico en PWC y en el Banco Santander
  • Tiene un Master de Business Administration de Harvard
  • En noviembre este año después de la fusión de OLX Brasil y Grupo ZAP fue nombrado el CEO del OLX Business Unit. Lidera la empresa junto con Andries Oudshoorn y Marcos Leite
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Simon Baker is the Founder and Executive Chairman of Online Marketplaces and Property Portal Watch. Involved with property portals for 15 years, he’s a well-recognized expert and industry consultant.
As former CEO/MD of the REA Group for 8 years, Simon led the group to its current market-leading position. When he joined REA Group in 2001, it had $4m in revenues, $6m in losses and an $8m market cap.
By 2008, the company presided over $155m in revenues, $35m in EBITDA and enjoyed a peak market cap of $1b. Simon is currently Chairman of the Mitula Group and Real Estate Investar and a serial portal founder and, investor.