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Our guest writer, Doug Newcomb, the President and Cofounder of the USA-based C3 Group, provides his expert view on the subject of connected cars and mobility.
From finance to fitness, from music to medicine, technology and connectivity have transformed nearly every industry they’ve touched over the past two decades. Now it’s automotive and transportation’s turn.
To grasp the potential impact technology will have on transportation, think back twenty years to the advent of the Internet. If in 1998 someone told you that within two decades you’d never need to go to a travel agent to book a flight, that you would stop having a newspaper delivered to your doorstep or that the President of the United States would be sending out 140-characters statements that would rock global politics and markets, it would have seemed farfetched.
Who knows whether today’s predictions of driverless robo-taxis roaming city streets will come to pass. After all, many of the predictions and business models in the early days of the Internet missed the mark. But with a ringside seat at the convergence of transportation and technology, I’m convinced that we’re on the cusp of dramatic changes to how people and goods get around and the potential for investment growth equal or even greater to that of the Internet explosion.
Transportation really hasn’t changed much over the last hundred years and is ripe for disruption. Consider the remarkable amount of investment that has poured into the space: According to a Brooking Institute report published last October, over the last five years more than $80 billion has been invested in self-driving cars and in transportation technology. From October 2016 to June 2017 alone, investment jumped from $11 billion to $76 billion.
Ford and GM each made $1 billion investments in 2016: Ford in Argo AI and GM’s in Cruze Automation, which followed a $500 million stake in Lyft, in part to develop self-driving cars. In the same year Samsung acquired Harman for $8 billion, and a few months later Intel acquired self-driving sensor maker Mobileye for more than $15 billion. And at the end of 2015 Toyota spent $1 billion to establish its Toyota Research Institute that focuses on self-driving car technology.
Brookings believes that this is just the tip of the iceberg in transportation technology investments and that corresponding innovations will spur even more spending. “If autonomous vehicles are the leading edge of artificial intelligence investment and development,” the report says, “then the $80 billion or more invested in that sector is a precursor of things to come in fields like natural language processing, image recognition and others as these technologies gain commercial momentum.”
I concur that this market is still in its early stages, but the Brookings report focused largely on self-driving technology. While autonomous cars get a lot of media attention and currently the lion’s share of investment in transportation technology, I’ve observed the market growing in concentric rings over the last five years or so, attracting more stakeholders, industries and investors.
For example, despite a few very high-profile publicity stunts, such as Otto’s autonomous big rig delivering Budweiser and Daimler’s self-driving Freightliner crossing Hoover Dam, trucking and logistics haven’t garnered the same attention as self-driving cars. Yet many investors believe that because of a growing shortage of drivers and the amount of time and money that can be saved via automation, trucking and logistics will be one of the first industries transformed by technology.
In 2017, more than $1 billion was spent by companies and investors on automation technologies related to trucking and logistics –ten times the amount compared to three years ago, according to CB Insights. And while we may not see self-driving big rigs on roads anytime soon, investments in interim technologies that consist of baby steps to full automation are already occurring.
One of the U.S.’s largest trucking companies, US Xpress, has updated its 7,000-plus fleet of semis with autonomous braking and collision-avoidance systems, and plans to add automated steering in three years. “I’m putting building blocks into my trucks that each year gets us closer and closer [to full automation],” Max Fuller, the company’s co-founder and executive chairman, told The New York Times last year.
Even before the advent of self-driving cars, getting people from point A to point B is being transformed by technology. While leading transportation network companies such as Uber and Lyft have altered door-to-door conveyance – and decimated the taxi cab industry – we’re also seeing increased investment in other people-mover innovations. These include everything from demand-driven van services such as Chariot, which Ford acquired in 2016 for $65 million, to the rapid rise of free-floating electric scooters in major U.S. cities.
Smart city technologies as they relate to transportation also present new investment opportunities. Large corporations such as Bosch and Cisco and automakers Ford and Audi are pouring resources into smart city projects, working with mayors, developers and others in public-private partnerships to decrease traffic congestion and increase quality of life.
Bosch has a partnered with real estate developer Lennar on the San Francisco Shipyard project to transform a former industrial area south of the city into a 775-acre mixed-use development that will include 12,000 homes and 3 million square feet of office space and provide connected transportation options. Ford has also staked much of its future on providing transportation options for what it calls “The City of Tomorrow.”
Speaking of Ford, the company’s role in democratizing car ownership hundred years ago helps put into perspective the changes we could see over the next several decades due to a shift in transportation. Before the car became common with the advent of the Model T, the first mass-produced mainstream vehicle, over their lifetime most people in the U.S. traveled less than 20 miles from where they lived.
After the Model T opened roads to the masses, it set in motion an economic chain of events that forever changed the developed world. Gas stations, motels, fast-food restaurants, repair shops and even the development of suburbs are all examples of industries whose fortunes are based on car travel.
A century ago, few could have predicted the impact automobiles would have on not only the economy but also our lives. I believe that, due to technology, we are now at another tipping point in transportation, one that will once again transform how we get around and reshape business and ultimately society.
About Doug Newcomb and the C3 Group
Doug Newcomb, the President and Cofounder of the C3 Group, has been covering car technology as a journalist for thirty years and is a recognized expert on the subject of connected cars and mobility. In 2013 Doug cofounded the Connected Car Conference (C3) at CE Week in New York and co-producer the inaugural Connected Car Expo at the LA Auto Show. Starting in 2014, Doug added successful events under the C3 banner at SXSW, in Silicon Valley and in Washington, D.C. Doug has been sought out for his opinion by many high-profile media outlets both in the press and the major USA TV channels. for his knowledge and views on car technology and is a frequent speaker at automotive and consumer-electronics industry events. He's currently a columnist for Autoblog, Forbes.com and PCMag.com and writes for Automobile and other outlets. In this MarketView Doug lays out his take on what’s happening especially in the USA.