The Motley Fool Names 5 Industries Autonomous Cars Will Drastically Impact
【Summary】Auto manufacturers, insurance companies, and ridesharing services are among some of the few industries that will have to be overhauled when autonomous cars come out.
Besides reducing traffic, the number of accidents, and the way we get around, autonomous cars are set to change a lot of things. Earlier this April, NBC claimed that self-driving tech would result in fewer car owners, the evolution of urban areas, more mobile business, a smaller group of organ donors, and longer commutes. While driverless cars are expected to change the way we get around, the technology is also forcing industries as a whole to change.
The Motley Fool named five industries that will be impacted by driverless vehicles and they're some interesting ones on the list. Since autonomous vehicles will turn the transportation industry upside down, the technology will have a wide impact across numerous industries that are all affected by transportation.
The most obvious companies that will be impacted by autonomous cars are auto manufacturers. For the most part, automakers are operating in an old-school mentality where they're trying to one up another. A new forward-thinking company like Tesla comes around and changes everything, leaving others to catch up.
Traditional Automakers Will Have To Transform
After Tesla introduced Autopilot on its electric vehicles, traditional automakers were tasked with coming out with usable electric cars. Then, they looked into developing semi-autonomous systems that could match the electric automaker's Autopilot system.
Automakers don't like being in second place and have stepped up their game in developing systems that can match Autopilot. General Motors is looking into driverless vehicles with Cruise Automation and other tech companies, including Strobe, a LiDAR manufacturer. With these two companies, GM is making large moves in the driverless segment.
General Motors isn't the only traditional automaker to switch gears towards making autonomous cars. Ford has also dived head first into self-driving tech. The American automaker recently started testing on-demand autonomous delivery vehicles in Florida and has partnered with companies like Qualcomm and Panasonic to come out with connected-car tech.
Moving from focusing on traditional cars to ones with self-driving tech is one of the clear signs of where the automotive segment is going. But having to focus on cars with autonomous capabilities isn't the only thing traditional automakers will have to change. As The Motley Fool points out, consumers will move away from purchasing vehicles, as some will benefit more from utilizing ridesharing services. That, though is something we've already heard about before.
What we didn't expect, and something that automakers probably didn't expect either, is that traditional auto manufacturers would have to fight for sales alongside technology companies. For a long time, only traditional automakers were the ones selling cars in the U.S. More recently, new companies, like Tesla, have appeared and given consumers new options. As more autonomous vehicles come out, newer, more focused tech companies will draw sales away from regular brands like Ford and GM.
Some tech companies have stated that they have no interest in producing cars, but instead will focus on the tech aspect of the vehicles. That's both a good and bad sign for automakers. If car manufacturers don't team up with tech companies, they'll have to spend millions in development to have similar technology. It's either that or lose out on sale to others.
Auto Insurance Companies Need To Stay Relevant
According to The Motley Fool, the auto insurance business is worth roughly $200 billion today. Autonomous vehicles are expected to reduce the number of incidents on the road and reduce the amount of automotive-related deaths on the road, which would reduce the need for auto insurance.
As the outlet reports, approximately 90 percent of automotive accidents are caused in some way or another by human error. Since autonomous cars are nearly perfect, The Motley Fool believes that having insurance will be the fleet owner's or manufacturer's responsibility instead of the driver's.
Warren Buffet's Berkshire Hathaway conglomerate owns automotive insurance company GEICO and told CNBC earlier this year that driverless cars would hurt the industry. "If they're safer, there's less in the way of insurance costs, [and] that brings down premiums significantly," stated Buffet.
As accident rates go down, so will prices for auto insurance. That isn't good for insurance companies.
Ridesharing Is Going To Become Really Competitive
Companies like Uber and Lyft came out of nowhere and decimated traditional taxi companies. Now, the rise of autonomous vehicles will help ridesharing companies like Uber and Lyft to make traditional human drivers obsolete. Since the driver and their vehicle, according to the outlet, account for nearly 75 percent of a ride's cost, prices for using those services will plummet.
Lyft and Uber may be leaders in the ridesharing scene, automakers are quickly trying to come out with their own companies. And since they have the means to produce their own cars, it's possible that they'll be able to make rides even more affordable. If traditional automakers enter the ride-sharing scene, it would create a lot of competition. Since they manufacture their own vehicles, they wouldn't have to pay drivers or car owners to use their machines.
While tech companies are entering the autonomous space, it looks like traditional automakers are looking to get into the ride-sharing segment with the driverless vehicles they're working on.
Say Goodbye To Gas Stations
The majority of semi-autonomous vehicles on the market are electric, which on their own will make gas stations outdated. But autonomous cars will be able to handle all of their driving on their own, meaning you'd be able to take it to work and then tell it to go home or find a parking spot. You could even tell it to go juice up on its own.
This will force gas stations, as The Motley Fool claims, to add electric chargers. They'll also be moved to more remote locations, as they won't have to be at corner locations near homes. Since autonomous cars can fill up on fuel on their own, gas stations won't have to be in prime locations and won't be nearly as busy, as owners could program their vehicle to fill up whenever they'd like.
Hotels Will Become More Popular, Air Travel Will Decrease
Autonomous vehicles will allow travelers to go on more trips, as transportation will be cheaper, safer, faster, and easier. Since the vehicles drive themselves, drivers could travel through the night to get to their destination, using their cars as a mobile hotel. More domestic travel, though, would be a major help to hotels and restaurants.
On the flip side, being able to get around more comfortably in an autonomous vehicle won't bode well for airlines, especially ones that only ferry passengers domestically. Instead of flying, more people could choose to drive, as it's less of a hassle and more convenient.
There are a lot of other little changes that will happen across the nation when autonomous vehicles are introduced, but these five industries are ones that The Motley Fool believes will face the largest impacts.
Vineeth Joel Patel
Joel Patel has been covering all aspects of the automotive industry for four years as an editor and freelance writer for various websites. When it comes to cars, he enjoys covering the merger between technology and cars. In his spare time, Joel likes to watch baseball, work on his car, and try new foods
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