Why self-driving vehicles are so important in transport revolution

When first hearing about self-driving vehicles one might think that the important point is that one can travel with her or his car with less stress and concentrate to other things than driving. This is a positive effect as well. However, the core reason for the importance of self-driving vehicles is elsewhere. Self-driven vehicles enable the future of non-ownersip of cars and transportation becoming an application driven service with flexible transportation means with lower cost.

The world´s most valuable startup, Californian origin company Uber, is pushing a new revolution, where anybody can order a taxi-type service with much lower cost than earlier. This does not mean today  cars without drivers, but the new way of service is opening a path to self-driven cars. In Europe, where public transportation, is in a much stronger position than in the USA and many other places in the globe, mobile as a service (Maas) concept is opening a new way of organising people´s transportation services. This will also push self-driven vehicle development.

Uber today is based on three business principles common to many fast growing start-ups: 1.) Asset light business model 2.) Sharing economy (peer-to-peer services) 3.) Customers paying on access to service rather than owning the asset (car in this case). Especially young people do not prefer to own a car, but rather want to have access easily and cost effectively to available cars or other transport means. For this reason car sharing is already growing rapidly in many city areas. Services are more cost effective without drivers. However, this leads to a development that Uber, among other transportation service companies, and car manufacturers are now investing heavily to self-driving vehicles. This will make, as a side effect, Uber business less “Asset light” and open a new type of risk for this large startup.

We can see the future cities and their transportation services and facilities different from today´s world. New service structure with self-driving vehicles as one core element will transform daily life as profoundly as cars did in the 20th century: reinventing transport and reshaping cities, while also dramatically reducing road deaths and pollution.

For rural areas and large countries with reasonable few people, like in large part of Finland, the revolution will came later with a little different form.

© Vesa Helkkula