Self-driving vehicles will inspire innovative business partnerships

Anand Sethuraman/Karthicknathan S/Srinivasan S | Updated on May 21, 2020 Published on May 21, 2020

Auto players may soon collaborate with tech and other industries to cater to commuters who find themselves with more time while travelling

In a true self-driving environment, wherein the task of driving is managed automatically, what could the driver do with the free time on hand? As automotive OEMs grapple with dwindling ownership numbers, will they be forced to partner with companies from other sectors to create different business models around the self-driving vehicles they make?

Consuming streaming media is perhaps the first thing people would resort to as the commuting stress is removed within a self-driving vehicle. The removal of the steering wheel within the self-driving vehicle can certainly make the multimedia experience immersive for the customer with a larger screen and surround sound system in a closed space. This possibility is leading to the entry of streaming players into the autonomous vehicle space. When drivers and occupants can fully divert their attention from the road, windscreens can be turned into projector screens to enable in-car gaming and video streaming. Self-driving vehicles can potentially become the new living room during long-distance trips, in terms of providing comfort while consuming media.

As early as 2017, Honda demonstrated a proof of concept version of its ‘Dream Drive’ in-car virtual reality prototype, featuring content from DreamWorks’ animated movies. Further, they collaborated with content creators like DC and Lego Group, to keep passengers entertained on long journeys. Audi is planning for additional revenue in self-driving vehicles by investing in new media platforms. It has initiated a collaboration with Disney to develop streaming content to take advantage of what it calls the “25th hour” — the time consumers will regain as a result of the rise of self-driving vehicles.

Different services

Apart from consuming media through streaming services, a self-driving vehicle can help the customers carry out official work with the help of in-built conference call facilities within the comforts of a car.

Retail giant IKEA came up with multiple design concepts for automotive OEMs through its future living lab program, SPACE10, where a self-driving vehicle could be converted and deployed for multiple use-cases such as a flexible office conference room, mobile healthcare, and an urban sleepover unit. Taking a lead from the IKEA concept, Volvo Cars’ 360c concept has a dedicated use case for a fully connected meeting place and workspace to get things done on the move.

Some of the other avenues where self-driving vehicles can be tried out are deliveries of food and consumer goods. Toyota recently announced ‘e-Palette’, a concept electric self-driving vehicle which can be customised for the above-mentioned activities in partnership with food companies. Ford has partnered with Domino’s and Postmates (on-demand delivery service provider) to deliver packages and pizza in a self-driving car.

Apart from giving back time to customers on daily trips, self-driving vehicles have the potential to replace short-haul flights due to improved comfort, greater scope for productivity and immersive in-vehicle entertainment experience.

Change in business models

For all these concepts and business models to turn into actual rollouts, there are several impediments that needs to be overcome. If we consider the uninterrupted streaming use case, the self-driving vehicle primarily needs a reliable network connection. The auto industry, which has not been concerned about network latency rate before, would need to rapidly scale up and forge partnerships for providing the immersive multimedia experience with top players such as Nvidia, Google, Ericsson, and Netflix. These partnerships would also ensure lesser impact for the automotive OEMs due to low sales in the formative years of a changing technological landscape.

Technology giants like Amazon, Netflix and Apple have a stronghold over the digital platform and content space due to the expertise built up over the years on other mediums such as mobile phones, tablets and television sets. They are also in a better position to generate revenue through the content on offer. While automotive OEMs have no option other than depending on these players for their technology and content repository, they still possess the factories, the design and maintenance expertise to take these concept vehicles to production and beyond.

The oncoming decade will be a good indicator of the way the self-driving vehicle market traverses as the Gen Z customers assert their preferences. As automotive OEMs begin to lose their relevance, the self-driving cars they make may predominantly be used for ride-hailing. A customer will possibly hail the car not just based on comfort but also content. The choices for a Chennai-Bengaluru trip could probably be a Toyota-designed self-driving taxi run by Ola having a Netflix subscription inbuilt and Volvo Cars-designed a self-driving taxi run by Uber having an Apple TV+ subscription in-built.

In such a scenario, we may have aggregators (Lyft, Ola, Uber) or technology players (say Apple or Netflix) commissioning automotive OEMs to build self-driving vehicles to suit their market or content. Or, we could see an OEM designing and building the best-in-class self-driving vehicle where technology players and aggregators bid amongst each other to get into a partnership with the OEM to attract Gen Z.

The writers are automotive domain consultants

Published on May 21, 2020

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