Autonomous Vehicle Insights

Autonomous Vehicles (Driverless Cars, Self-Driving Cars) will fundamentally transform mobility and usher in the next great leap in society.

Autonomous modes of transportation are used everyday in cities around the world everyday and with the introduction of autonomous vehicles usage will only grow. As the research around autonomous transportation has moved from the lab to the streets of the world, it’s impact has yet to be fully felt.

In the future individuals will subscribe to an autonomous vehicle brand as a service as opposed to owning and garaging an autonomous vehicle.

Morgan Stanley is projecting the shared mobility market to be worth $2.6 trillion by 2030.

To be prepared for this market opportunity, strategies have to be developed now.

To learn more about our autonomous vehicle strategy services, please visit our autonomous vehicle strategy section.

Our insights into autonomous vehicles from the labs to the startups to the traditional car manufacturers are listed below in the form of articles for your perusal.

Autonomous Trucks, Trains And Ships Will Transform Commerce

Automation can improve the efficiency of the freight and transportation industries, which will be good news for a range of global businesses.

The advent of autonomous forms of transportation — vehicles that can sense and navigate their environment without human input — will usher in the greatest change in society since the Industrial Revolution. Autonomous vehicles will change every aspect of society, including the freight industry that’s already facing a metamorphosis.

Rising diesel prices and a slowing demand for some freight are among the sources of concern for a trucking industry today, according to the Wall Street Journal. But autonomous technologies can unlock significant efficiency and safety improvements in slowing industries like trucking and shipping — and industrial companies and service providers will once again reinvent themselves around these opportunities.

OTTO, a self-driving truck start-up based in San Francisco is working on a self-driving kit for commercial trucks that will allow drivers to sleep during long-haul trips, greatly improving safety and productivity.

Rolls-Royce recently announced an autonomous ship with no crew that will be remotely controlled through an augmented reality logistics command center.

“Autonomous shipping is the future of the maritime industry,” Mikael Makinen, president of Rolls-Royce Marine, said in a white paper about the technology. “As disruptive as the smartphone, the smart ship will revolutionize the landscape of ship design and operations.”

Today, labor accounts for a significant portion of total operating costs for each unit in a fleet. As autonomous technology evolves, industrial companies that rely on trucks or ships to move their goods could increase efficiency by removing the drivers from the trucks.

But what about those driving jobs? What will the role of humans look like in this scenario?

Rüdiger Grube, chairman and CEO of rail operator of Deutsche Bahn describes how “the role of the train driver and the train controller will increasingly merge in the future.” And as these roles merge, a new jobs category will emerge. New jobs will be created for individuals with unique skill sets who can remotely manage and optimize a fleet of autonomous ships, trains, trucks and vehicles in select regions in real-time.

Drivers and operators may be assisted by these new players — let’s call them “autonomous logistics officers” — who will manage the fleets from a remote command center in multiple shifts a day. When these roles merge, the quality of life of a truck driver will improve immensely. For companies that own and operate the fleet of autonomous trucks, they will see increase efficiencies and lower costs as the trucks will now be able to operate 24 hours a day, seven days a week.

The age of driverless freight, especially trains, in the U.S. may not be in the near term. In July, the Federal Railroad Administration conducted a public hearing about a rule it proposed that requires two-man crews.

But soon consumers will be able to subscribe to an autonomous vehicle brand and summon a car when needed. When this technology is first introduced, autonomous logistics officers will manage the fleet to ensure that there are a sufficient number of vehicles in select locations based on demand.

Over time, the role of an autonomous logistics officer will evolve as artificial intelligence combines with deep learning and neural networks. Then industrial companies like freight businesses will once again reinvent themselves.

Autonomous Trucks, Trains and Ships Will Transform Commerce is an article written by Brulte & Company Co-Founder Grayson Brulte that was originally published on General Electric Reports.

Top image: Courtesy of Getty Images.

Autonomous Vehicle Guest Leasing Program — How the hotel industry can regain market share from Airbnb

One of the greatest beneficiaries of the autonomous vehicle will be the traditional hotel industry.

Hotel owners and operators that manage world class brands will be able to streamline their unique approach to customer service, increase food and beverage revenue, incidentals revenue and reduce parking costs and fleet operations overhead.

By openly embracing an autonomous vehicle strategy similar to the one described below, hotels will be able to offer a unique service that distinguishes their property from their competitors and the peer-to-peer lodging industry. With the rapid growth of peer-to-peer lodging industry lead by Airbnb, hotels have to adopt and improve their product in a non-traditional fashion.

By adopting the product to benefit from the future, hotel owners and operators have to first understand the following data points:

1. An individual who has stayed in peer-to-peer lodging in the last five years is half as likely to prefer staying in a traditional hotel.

2. In 2016, Airbnb will account for 5.4% of total U.S. room supply, up from 3.6% last year according to an estimate from Goldman Sachs. To put this number into perspective, only five star hotel operators have a market share greater than 5%.

The Challenge for Hotels: Getting ahead of Airbnb

While the strategy will need to be unique to each and every property, the general premise can be applied to the industry as a whole. AJ Willmer, a technology consultant based in Beverly Hills states the following, “the technology will take care of itself”. Mr. Willmer is correct and it is important for the hotel industry not to prejudge autonomous vehicle technology.

Today, we do not yet know how the technology will evolve or how individuals will adapt to new modes of transportation. What we do know today is that autonomous vehicles are going to change the world and industries will have to adopt their business models to accommodate for autonomous vehicles.

To successfully adapt business models and prepare for a future with autonomous vehicles, one must remove oneself from the hotel industry and refrain from thinking just like a hotel operator.

The future is autonomous vehicles will be a subscription service. In the future we will subscribe to a car brand and summon one of the car’s models depending on the journey that you were about to embark on. If are going skiing you will summon the SUV, if you are going to the beach you will summon the convertible.

Car Ownership – A Thing of the Past?

The car will be owned, maintained and serviced by the car manufacturer through a subsidiary service such as BMW’s ReachNow. The car no longer will used exclusively by you and your family. “We do feel that the car sharing is going to significantly increase in the future” says John Stapleton, North America CFO of General Motors. Mr. Stapleton is correct to a degree and in the future, the car will be summoned when you need the car.

But what if you had an exclusive premium luxury non-shared subscription for your primary vehicle? You arrive at the hotel and now what do you? Do you tell the autonomous vehicle to park and pay a daily parking fee? Or do you lease the car back to the hotel for a daily hotel credit based on the time you will not need the vehicle?

This would depend on if the hotel offered an autonomous vehicle guest leasing program. Carlos Ghosn, Chairman and Chief Executive Officer of the Renault-Nissan Alliance has stated; “Connectivity and autonomous driving are about to change driving in ways we’re only beginning to understand.”

Mr. Ghosn is correct in his thinking and this is why it is important for hotels to once again lead on new technologies. The hotel industry has a long illustrious career of being an innovator. One of the first central fire alarm systems was installed at John Jacob Astor IV’s St Regis in 1904, which improved the safety of the guests staying in the hotel.

An autonomous vehicle guest leasing program would allow hotel owners and operators build upon the legacy of innovation commenced by John Jacob Astor IV with the opening of the St Regis in New York City in 1904.

Autonomous Vehicle Guest Leasing Program

Today’s hotels would be able to streamline their unique approach to customer service, increase food and beverage revenue, incidentals revenue and reduce parking costs and fleet operations overhead by implementing the following an autonomous vehicle guest leasing program strategy.

To streamline the approach to customer service, guests arriving to the property in an autonomous luxury vehicle that they subscribe exclusively to, would be offered the opportunity to lease the vehicle back to the hotel for a daily hotel credit that can be used towards incidentals while on property.

By offering the daily credit in exchange for the vehicle, hotels would eliminate the need to own and operate a fleet of traditional house cars with a driver. By no longer owning and operating a fleet of house cars, hotels would eliminate the monthly overhead costs for car payments, gas and/or electric charging, maintenance, parking and drivers.

Applying a daily hotel credit to a room night is a proven strategy that allows hotels to discount room nights without lowering the published room rate. Based on historical spending averages, hotel guests tend to spend more when they are receiving a daily hotel credit.

While hotels would not be able to depend on an autonomous vehicle guest leasing program to replace their house cars on day one, they would be able to depend on the program in the future as premium non-shared autonomous vehicles gain market share.

Additional Benefits

    • Vehicle insurance payments would be reduced to liability as the hotel would insure the autonomous vehicle while it is leased to the hotel by the guest.

    • Not only would this reduce monthly expenditures, it would lead to an increase of TRevPAR (total revenue per available room) as guests would be more likely to stay on property for meals and order a nicer bottle of wine at dinner, which would increase their incidentals spend while the vehicle generates revenue for the hotel.

    • As vehicles sit idle 94% of the time, hotels have to park the vehicles on valuable land that could be used to further enhance the guest experience instead of storing cars. For example there are 16 five star hotels in Los Angeles County according to American Express Travel and Los Angeles County has approximately 200 square miles of land (14%) devoted to parking according to a study from the Journal of the American Planning Association.

Imagine if a percentage of that land could be converted into green spaces in and around hotels what it would do to the guest experience? With sixteen five star hotels and hundreds of miles of land devoted to parking, hotel owners and operators in Los Angeles County have the perfect opportunity to optimize land use by developing and implementing an autonomous vehicle leasing program.

Autonomous vehicle leasing programs are the future. It is a program that is currently not well suited for Airbnb today due to the structure of how the peer-to-peer lodging industry currently operates with individuals hosts.

Once again, hotels will have the advantage when it comes to new innovations. But this advantage will not last forever. It is important for hotel owners and operators to fully embrace autonomous vehicles as they are the future that will allow their businesses to continue to grow in the midst of fierce competition.

Autonomous Vehicle Guest Leasing Program is an article written by Brulte & Company Co-Founder Grayson Brulte that was originally published on Continental’s 2025AD.

Top image: Courtesy of Fotolia / chameleonseye

Hold the Chauffeur! Beverly Hills Pushing for Fleets of Self-Driving Cars

“Imagine an autonomous vehicle going down Rodeo Drive,” says Mayor John Mirisch, who has met with tech giants Google and Apple to drum up interest (and investment) to make his municipality the first to integrate self-driving cars into its mass-transit infrastructure.

In case you didn’t have enough screens in your life, Grayson Brulte wants you to add one more: your car. Specifically, if the co-chair of the city of Beverly Hills Mayor’s Autonomous Vehicle Task Force prevails, your self-driving car.

The city has met with such tech giants as Google and Apple to drum up interest (and investment) in an effort to become the first municipality to integrate self-driving cars into its mass-transit infrastructure. But beyond all the civic advantages, Brulte insists that Hollywood should get behind the initiative for self-serving reasons. “The industry is going through massive disrupting changes,” he says. “But no one is looking at autonomous vehicles.”

Recent studies underscore the upside. “The car is effectively the fourth screen for media content consumption,” declared a 2016 Morgan Stanley report. “In our view, this is what Silicon Valley will be targeting by leveraging the autonomous utility.” In that vein, a recent Ernst & Young report concluded that driverless cars could generate $20 billion in incremental growth through increased streaming revenue.

Beverly Hills seeks to be a home for these futurist visions, a place where, Brulte hopes, industry players will see how driverless cars can improve their lives — and their bottom line. “Hollywood execs take for granted that everyone wants to watch their content,” he says. “The studios should make sure their content is there. It has to be different from a phone, or a house — there has to be an experience for the car.”

Beverly Hills already is a top contender as a lab for driverless cars. The first rail stop of Metro’s Purple Line is set to debut in 2023, but the city could be on track to have its own fleet of autonomous cars or mini-buses well before then. In April, the City Council voted unanimously to create a program to develop self-driving cars as part of a public transportation plan that would use existing infrastructure and technology to help connect cars to the city’s informational grid.

“L.A. is faced with a public transportation system that is second-class,” says Beverly Hills Mayor John Mirisch, who hopes to have a fleet up and running in five to seven years. “We aim to shift that paradigm on its head.” Mirisch says the excellent roads, quality infrastructure and well-educated populace in Beverly Hills make it an ideal place for auto engineers, inventors and tech companies to make a big splash. The city is in talks with such car manufacturers as Google, Volvo and BMW as well as with cutting-edge companies like Local Motors, an Arizona firm that manufactures self-driving cars with 3D printers.

“Imagine an autonomous vehicle going down Rodeo Drive,” says Mirisch. “A lot of entertainment people who wanted to go into town wouldn’t have to worry about parking.”

THE FUTURE OF L.A. TRANSIT IS UNDERWAY

What will life be like here when you no longer can complain about traffic? Within a few decades, the Hyperloop, a high-speed rail and self-driving cars will alter how you travel — and how fast.

1. HYPERLOOP

From a proposed L.A. terminus in Santa Clarita, Elon Musk’s high-speed tube-transport system could reach San Francisco in less than an hour. Tests of the technology, which theoretically could top 700 mph, already are underway.

2. HIGH-SPEED RAIL

With construction underway (in the Central Valley), this project is slated to serve L.A. and San Francisco by 2029. The trains, which will travel up to 220 mph, would connect the two cities in two hours and 40 minutes.

3. SELF-DRIVING CARS

Beverly Hills is pursuing plans that would make it the nation’s first city to integrate autonomous vehicles into its public-transit system.

4. METRO EXPANSION

Overdue growth to existing rail might be less futuristic than 700 mph pneumatic tubes but arguably more transformational for most Angelenos. Highlights include a new line linking Culver City and the rest of the Westside to LAX (2019) and a Purple Line extension down Wilshire to La Cienega (2023) and — don’t hold your breath — Westwood (2035).

5. FLY TO MARS (SERIOUSLY!)

Elon Musk and his Hawthorne-based SpaceX plan to send well-funded private travelers to Mars by 2024 (arriving a year later).

As featured in the July 22, 2016 issue of The Hollywood Reporter

Senior Citizens regain Mobility with Autonomous Vehicles

Senior citizens will regain their mobility with autonomous vehicles if we plan accordingly and rethink how we design continuing-care retirement communities.

As of 2014, senior citizens counted for one in every seven Americans which is 14.5% of the U.S. population. By 2040 this number is projected to grow to 21.7% of the U.S. population. The U.S. is getting older and we have to prepare for the aging of society by openly discussing land use issues and embracing autonomous forms of transportation.

Due to the natural aging process, senior citizens lose valuable skills such as the ability to drive. This has a negative impact on their quality of life and their overall emotional state of mind. Once they lose the ability to drive they lose their freedom. They can no longer drive to the grocery store, visit a museum or loved ones. They are now dependent on a caregiver for once simple tasks such as mobility and this can be an emotionally difficult pill to swallow.

Sheryl Connelly, Global Consumer Trends and Futuring Manager at Ford views autonomous vehicles “as a way to strategically address an aging population”. Ms. Connelly is both correct and bold in her assessment.

Technology will solve the mobility issue with an aging population through the introduction and the adoption of level 4 autonomous vehicles. When level 4 autonomous vehicles are available on our roads and summoned by a tap on a phone, senior citizens will regain their freedom. Seniors will have the ability to explore life and become independent therefore increasing their overall quality of life.

To get here we need to rethink society and start planning for a future with autonomous vehicles now. With the current high demand for continuing-care retirement communities located in the heart of cities, developers are betting on the present, but they are missing the future.

Developers are creating wonderful condo-like services without a clinical feel however, they are not taking into account the future — autonomous forms of transportation.

Developers construct buildings to last decades, not years. In less than 10 years fully autonomous forms of transportation will become commonplace in society and upon the roads. But what happens to the senior citizen who has lost their mobility and lives in a recently constructed continuing-care retirement community where the developer did not incorporate autonomous forms of transportation into the development?

These seniors would lose out on their ability to fully regain their freedom through the advancements in autonomous forms of transportation as their building would not be equipped to handle autonomous vehicles. “For the first time in history, older people are going to be the lifestyle leaders of a new technology” says Joseph Coughlin, Director of the Massachusetts Institute of Technology’s AgeLab.

Mr. Coughlin is correct and developers of continuing-care retirement communities will have to plan accordingly for a future with autonomous forms of transportation. When designing these communities developers should take into account the vehicle’s impact on the material design and overall functionality of the buildings.

If it is snowing or very hot outside how does the senior enter the vehicle without facing the elements? Were the proper autonomous pick up and drop off zones with conductive charging created prior to building the structure?

If there are no pick up and drop off zones with conductive charging, developers of continuing-care retirement communities will have to plan for the future now by retrofitting their buildings over the next ten years. If developers do not plan for the future, how will autonomous forms of transportation give seniors their mobility once again? We must plan for the future of autonomous forms of transportation today, not in ten years.

When planning for the future of autonomous transportation we should take into account fear of the unknown. The unknown fear of autonomous vehicles for seniors is real as only 35% of drivers age 50+ would be willing to use a driverless car if they could no longer drive safely. 42% are unsure and only 24% would not be willing to use an autonomous vehicle according to a recent survey from The Hartford and MIT AgeLab.

This fear exists because of the unknown. Most senior citizens have never experienced a ride in an autonomous vehicle and / or spoken with an expert in the field to alleviate their fears.

In order to overcome these fears, autonomous vehicle manufacturers and service providers should host autonomous vehicle demo days in cities around the world with high senior populations to slowly introduce the technology and answer their questions.

Through outreach and education, senior citizens will start to overcome their fear of autonomous vehicles and openly embrace the vehicles as a new form of mobility. Seniors will once again have “the ability to decide for themselves where they want to move, when they want to move” says Gill Pratt, CEO of Toyota Research Institute.

Through proper planning by developers and the adoption of autonomous vehicles, senior citizens will once again enjoy their freedom of mobility when they can no longer drive. Now seeing their loved ones or going to the grocery store is just a tap away. Mobility will once again be attainable for millions of senior citizens around the world.

Senior Citizens regain Mobility with Autonomous Vehicles is an article written by Brulte & Company Co-Founder Grayson Brulte.

Image courtesy of Google

Brands as an Autonomous Vehicle Service

In the future we will subscribe to an autonomous vehicle brand as a service as opposed to owning and garaging an autonomous vehicle.

In the future we will subscribe to a vehicle brand and summon autonomous vehicles on-demand from our smartphones which will arrive in 2 to 3 minutes.

2 to 3 minutes is the “magic pickup time” according to Marc Andreessen. If autonomous vehicles cannot arrive in this time frame, there will be a dramatic drop-off in demand and usage. This drop-off in demand would cause the entire program to be underutilized therefore resulting in a negative domino effect that would impact the entire service.

Wisely recognizing the negative domino effect and industry research, which is projecting that up to 1 out of 10 cars sold in 2030 will be a shared vehicle, traditional car manufacturers are transforming into mobility companies. The goal of the traditional car manufacturers is to model the behavior of how vehicles with drivers are used as a mobility service in a variety of circumstances.

Circumstances such as which are the most common routes in a city? What types of vehicles are used for the service and on which days? What happens when it rains or the sun is out? Are different vehicles used? In January in Southern California is there an uptick in SUV usage when ski season is in full effect in the mountains? Or is it the opposite?

These are just a few of the questions that traditional car manufacturers will have to fully understand in order to properly develop and launch an on-demand autonomous vehicle brand as a service.

To achieve this goal traditional car manufacturers are making strategic investments in transportation network companies to co-develop the future of transportation. In January, General Motors invested $500 million in Lyft while Volkswagen invested $300 million in Gett.

Furthering their bet on autonomous mobility, General Motors purchased Cruise Automation for over a $1 billion in March with the deal closing in May. While General Motors has been aggressively leveraging their balance sheet and deep knowledge of cars to become a leader in autonomous mobility, others have been taking note.

Apple recently invested $1 billion in Chinese ride-hailing service Didi Chuxing. The investment by Apple is two-fold. One, it’s a clear signal that Tim Cook and company are doubling down on China. Two, Apple is indeed working on an autonomous car that could be manufactured and initially launched in China.

Angelo Zino, an equity analyst at S&P Global Market Intelligence summed up the investment as, “We think the investment makes sense as it should help improve Apple’s relationship with the Chinese government amid regulatory concerns.”

Mr. Zino is correct and further states, “We view the connected car space as a major growth opportunity for Apple and this investment could help the company with those initiatives.”

While Mr. Zino highlights the connected car, in my view that is just the tip of the iceberg as Apple currently has $181 billion of cash and investments (April 2016) in reserve overseas. The overseas cash reserve could tapped to fund the development and deployment of an autonomous vehicle service in China.

Furthermore, over 200,000 people die a year as a result of road accidents in China according to the World Health Organization. This number is more than four times the death toll from such accidents published by the Chinese government.

By removing the driver from the car, roads in China will become safer and the rate of fatalities from road accidents will fall as on-demand autonomous vehicles become prevalent on the roads of China.

This makes the investment in Didi Chuxing a shrewd political move. Apple could be viewed in some corners as helping to reduce the number of fatalities from road accidents with the introduction of an on-demand autonomous vehicle brand as a service powered by Didi Chuxing.

While Apple is making strategic investments in China to further their business interests and General Motors purchased an autonomous vehicle startup, other companies are taking a more holistic approach to the future of autonomous vehicles.

Volkswagen through their investment in Gett is working on developing a Porsche chauffeur service in the world’s largest cities. The premise for the Porsche chauffeur service is to model the behavior of how subscribers use the service and gather data on routes through deep learning. When Porsche feels comfortable with the logistics and autonomous hardware, the chauffeurs will be removed and the Porsche chauffeur service will become autonomous.

Klaus Froehlich, BMW AG’s head of development recently told Bloomberg in an interview, “the company that manages to offer driverless ride sharing cheaply and first will dominate this market. It’s a business proposition worth billions in profits that will cost billions to develop.”

Research released by McKinsey & Company in January 2016 projects that shared mobility, connectivity services, feature upgrades and new business models could expand automotive revenue pools by 30% adding up to $1.5 trillion in new revenue for companies.

On-demand autonomous vehicles will reshape global transportation forever and create fortunes for forward-thinking entrepreneurs and billions in new revenue for businesses.

Brands as an Autonomous Vehicle Service is an article written by Brulte & Company Co-Founder Grayson Brulte.