The Car As You Know It Is Dead

Goodbye, motoring. Hello, mobility. John Edson of Lunar explains why the future of cars is about experience versus ownership.

The tech world has been abuzz about the developments of the self-driving car, visions that are supplanting the earlier visions that would have filled the sky with flying cars. But beyond the hype and the promise, how will autonomous vehicles—and their accompanying technologies—really enter our lives?

On my 45-minute drive to work, I like to listen to books and podcasts. Recently I heard an episode from a favorite podcast, the NPR radio series "This American Life." It was one of their best shows ever, a behind-the-scenes look at a Jeep dealership in the throes of trying to hit their monthly quota. The show beautifully creates a sympathetic view of the century-old art of car salesmanship and the interplay between customer, salesperson, manager, dealer, and automaker that defines car buying. (Give it a listen.)

What struck me about the show is that this is already a view of cars as seen in the rear view mirror. Did you know for instance that starting in 2006, annual miles driven in the U.S. have dropped year over year? We are now at 1996 levels. Telecommuting, Internet shopping, higher gas prices, car sharing, and urbanization mean that we need fewer cars, and of course, fewer dealerships.

At the same time, car technology is changing at an accelerating pace. Cars are getting smarter, safer, and, eventually, they’ll be able to drive themselves. I’m keenly aware of these shifts because my firm, Lunar, has been doing more work for car makers, helping them marry an understanding of people and trends with emerging technologies to create designs that will be useful and desired by people down the road.
From where I sit, three major shifts will move the car from a depreciating asset that every family owns to a mesh of hardware, software, and services that meet our transportation needs in a multidimensional way that destroys our assumptions of what a car is.

The Shift to Delivering Experience.

While Tesla has built a desirable electric car, perhaps its most important disruption isn’t in the fact that it’s electric, nor is it the 17" touch screen whose interface can be updated by Tesla as fluidly as Google updates any of their offerings. The most disruptive thing that Tesla is doing? Selling cars in shopping malls through store-like environments that upend the dealership model.

In short, they are selling cars the way Apple would.

The focus is on making a desirable product, showcasing it with a high degree of control and consistency, and simplifying the process so that it takes nothing away from the excitement of buying a new car. Why has no one else done this? Because it’s requiring a massive lobbying effort, changing century-old laws state by state to allow Tesla to sell direct to consumers, skirting the requirement that cars be sold through independent dealers.

But Tesla is doing the hard work because it sees through to the result: delivering a seamless buying experience makes for better relationships with customers. They are starting with a blank slate and designing the experience they want to deliver.

The Shift to Social

Despite the fact that we all know using a smartphone while driving is dangerous, being alone in a car is in many respects the perfect time to connect with friends and colleagues. It’s just too tempting not to pick up a smartphone and make a call, or, regrettably, send a text.

But before long, cars will be able to pilot themselves, at least for part of the drive. This is coming, and I predict that before 2020, luxury car models will be offering this capability. And when they do, the first difference will be that we can be better connected during our transit. We’ll fill the time with more phone calls, with more texting, with more social media, with more email.

More than that, our cars will begin to leverage the big data about us and merge it with our calendars and our social networks to help us move around more fluidly. This future car will connect with your calendar when I encounter traffic, letting you know that I'll be late for our meeting, for instance. It will help me optimize my errands by making inferences about my shopping habits and to do list. It will assign kids to me when my wife is running late. It will make me a "friend taxi" when my route coincides with your errands. In short, my car will be a vehicle for helping me be better connected.

The Shift to Mobility

With that stage set, what will be next? The trend is not good for car makers: fewer miles driven, more urban living, car sharing on the rise, digitally empowered services like Uber and Lyft. To survive, car brands must use the new technologies and social trends to transform themselves into service companies that provide mobility to their customers, rather than just cars.

And some seem to be taking heed. BMW and Mercedes have already created service experiments in test markets around the world. Mercedes has created a kid taxi service called Boost, and both companies have created car sharing experiments under their own labels (BMW is DriveNow, a partnership with European rental agency Sixt; Mercedes has built Car2Go which you can leave anywhere when you’re done with it.)

A cargo bike from Mo: Mobility

When fully autonomous cars become a reality, the equation really gets fun. Mashups of car brands with features like ZipCar, Uber, and Facebook will transplant traditional car ownership with mobility memberships that not only offer you "wheels when you want them" (ZipCar’s motto) but also deliver "wheels where you need them." These memberships will grant credits for riding your bike and taking public transit (see Mo: Mobility), and give you the flexibility of the kind of vehicle you need. Taking a client to lunch? Order up a Lexus! Going to Ikea? Get a truck. Commuting? Enjoy discounts for carpooling.

The hidden benefits of this on-demand mobility will be many. Land that has been dedicated to parking will become available for other uses, less energy will be spent moving people around, people will become more mobile, time will be reclaimed for additional productivity and enjoyment, and the fright mode of transport will be available to match the need.

Of course, it might not be the car brands who build these mobility membership platforms. I’ve written it this way because I think they should. But it’s not a foregone conclusion. Google for one is working on all of these pieces of technology except for the car itself. If they don’t move with some agility, the car brands could become secondary commodities in a mobility platform model defined and owned by a Google.

But no matter who owns the new model, the future of driving won’t be driving. The romantic notion of going for a drive for the drive itself—the idea that the British call motoring—will fade away. Getting into a car in 20 years will be, more than ever, about getting from Point A to Point B, and whoever is providing that service will be judged for how seamlessly and luxuriously they deliver that mobility.

[Image: Motor car, 1908 via Flickr user Blue Mountains Local Studies]

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  • I couldn't disagree more about the future of "driving". Sure, the future of mass transit and transportation may be about interchangeable commodity machines that take you from A to B. Emphasis on "that take you". However, because the verb to "drive" implies being in control, driving will still mean getting on your special machine, and making the rest of commuters in their sterile a-to-b pods drool over your shiny new 2034 Camaro whizzing by. Getting around and driving will just be two different things.

  • What is disruptive the way Tesla is selling his cars?

    Tesla is somehow selling his cars like cars are sold in Germany since years, since cars are sold. When you want a new car, you are going to a dealer. The dealer has some cars on show case. Then you go with the dealer through the catalog in terms of functionalities and colors you'd like to have your car. Then you order it to your like and somewhere 2 to 6 month later you get your car delivered as you have ordered it. That is reason why car production is so complicated. There is not that one model and one version. If you want a discount on your new car, you can even make an agreement with the dealer, that he will order the car as you like and the dealer will use the car for its showcase for 3 month. Then you buy it from the dealer as a used car, which has a discount of 30% normally.

    I don't see what Tesla has made different that from buying an BMW, Mercedes, or Lamborghini, Ferrari.

  • I can't speak to how cars are sold in Germany. But as for the US, do you know that there are laws in every of the 50 states that prohibit manufacturers from selling cars directly to consumers? Tesla is taking the point of view that it's better to create a retail "buying experience" than a retail "selling experience", and so they are challenging the status quo, lobbying against these antiquated laws. Walking into a Tesla showroom in a mall is world's apart from walking into a Penske-owned BMW dealership on the auto mall expressway.

  • Henry, great extension of the argument. Yes, motoring will thrive as a leisure activity, but it won't be competing with point-a-to-b utility.

  • Thanks, Karla. The ubran, suburban, rural question is a good one, and will likely lead to a variety of solutions. True, suburbanites treat their cars as another room of their house, but I expect we'll see different flavors of sharing emerge that augment car ownership as the predominant solution. It could mean, for instance, that there is a need to "n-1" cars owned because the second or third car doesn't offer the same utility as the first, and those need might find their solution in a community car share or autonomous Uber kind of thing.

  • Karla Jackson

    This will be a new frontier in income/lifestyle disparity between urban and suburban/rural lives. Car sharing won't be practical in rural communities, and suburbanites are unlikely to embrace it. Parents who don't allow their children to walk or take the school bus will not trust their children's safety to unsupervised self-driving cars,

  • Karla - I agree, people are just not organised enough to make car sharing a reality, at least not for leisurely use. On the weekends, we like to play it as it comes - and having your own car on standby to come and go as you please is essential.

  • Henry Biggs

    Actually I think that increased autonomy and driverless vehicles will actually revive the concept of motoring and driving for pleasure for enthusiasts in exactly the same way that the horseriding is now a leisure activity as opposed to a necessity. I wrote as both a horserider and classic car owner so I can't wait for driverless cars.

  • Great observations John It's great to hear you are involved in helping evolve this sector - there remains a lot to be done! I was impressed to see the commitment of the major car brands to be present and engaged at CES this year. The potential for transportation to evolve beyond the car is (ironically) linked directly to how successfully the automobile as a platform can be configured to fit into a broader ecosystem of mobility. The next decade should be a fun ride ;-) I can't wait to see what's next!

  • Sue Lowery

    You are the first one to mention what I think too, will make the self-driving car a reality and that is that now you can text, read, social media etc. while the car drives itself. To me that is going to be a huge driving factor. (sorry!)

    The other reason, I have a son 29 with autism. The thought that he will be able to call up a "ride" to come see us, or go to the grocery without getting ripped off by an unscrupulous taxi driver who sees someone to take advantage of is huge. Public transportation is very limited outside of big cities and I can't wait till this is a reality.

  • Thanks for your comment, Michael. And I hear you. I'm not an advocate of eliminating unplugged moments of relaxation. But for me, I would rather use technology to give me control of when those moments are. I'm an introvert in an extrovert's role, so I cherish those down times, but if I can be social while I'm heading home, and I can curl up with my dog and my book in the evening, that's a big win. As for being able to drive a car well, those skills will become novelties kept alive by hobbyists driving on tracks and in special driving parks on weekends.

  • Matt Spangler

    Interesting article. I do agree that for the larger segment of the population that are addicted to being "plugged in" constantly, this vision will be a dream come true. But you discount the smaller segment of us who find pleasure in motoring. There is something relaxing and at times, exhilarating about being "at one" with the machine you control. That can be a motorcycle or a car. The beauty of vintage vehicles is that they don't rely on technology to keep them working. The cost of maintenance and reliability is higher. There is no need to keep up with current software/hardware changes. The focus is the simplicity and craftsmanship of the machine. The future of motoring, will still involve motoring for those of us who enjoy it for the enjoyment it gives us. For the rest, who simply see motoring as a way to get from point A to B . . . you are correct.

  • Matt Spangler

    Whoops! I was unclear on my comment about cost of maintenance . . . that was referring to vintage vehicles. Some may have a higher cost of certain parts, especially on rare vehicles . . . but overall, mechanical parts are cheaper than complex electronics, with microprocessors, wiring harnesses, etc.

  • Michael J. Brown

    Why is the benefit of having more time to "stay connected" being held in such high regard as a result of self piloting automobiles? When will people learn to simply unplug? Just because we can eek out an extra 45 minutes here and 20 minutes there doesn't mean those precious minutes need to be filled with more activities. The pastime of simply relaxing seems to be ad fleeting as the art of actually 'driving' a car with one's own ability (instead of being so inept that one cannot even parallel park or look around to check one's own blind spots, or correct a car in a spin-out without doing a complete 180, or drive a rear-wheel drive car in the snow without spinning it out, etc.)

  • Driving solo will also get more expensive. I believe this model is going to happen regardless of how we divide our time up, because there simply isn't enough lithium or platinum in the world for everyone to have their own vehicle.

  • Thanks for your contribution, Shayne. There will definitely be more sharing in the future. Cars will move from objects we own to services we share.