Recent history is littered with once-successful companies that didn’t see disruption coming.
For example, Digital Equipment Corporation (DEC), a once thriving, multi-billion-dollar computer company in the 1990s simply melted away because it did not anticipate the personal computing revolution.
Ken Olsen, DEC founder and CEO, was famously quoted as having said, “the personal computer will fall flat on its face in business.” Oops.
Signs of disruption
For the automotive industry, signs of disruption are popping up in every direction. Google has been developing driverless cars for some years now. Tesla is bringing fully electric cars to the mainstream. Even Apple is rumored to be developing a car.
Clearly, automotive disruption is not being lost on the likes of General Motors, Toyota, Ford, and other established companies in the industry.
GM invested in Lyft, presumably with the idea of supplying Lyft’s drivers exclusively with Chevys, Buicks, and Oldsmobiles. I’m guessing GM is also hoping to gain valuable big data from millions of Lyft customers and their rides.
While there are some initiatives ongoing in the mass transportation landscape, the U.S., with its network of highways and superhighways, is likely to remain a car-driven society for several generations, at least.
And even though we’ll continue to move to electric cars, the transition away from fossil fuel-driven vehicles will be slow.
The real revolution, in my opinion, will be reducing the number of cars on the road. How do we get there? The answer is through our children and their children.
Millennials will change the world
When I was a kid, I loved cars. I loved the idea of tricked-out, souped-up driving machines. I wanted to learn to drive at an early age. I got my learner’s permit at age 16, and my driver’s license six months later.
By 17, I might as well have owned one of my parent’s cars, as I was the primary driver. By 18, I had my own Mustang convertible. My love of cars has evolved, but it hasn’t really faded.
We had to coerce him into learning to drive and getting his license at age 17.
We gifted him our ancient Volvo station wagon so he could transport himself. Of course, we paid insurance and upkeep. The upside was we didn’t have to drive him everywhere.
More recently, I’ve noticed that nephews and nieces, who are millennials, are even less enamored of car ownership. Maintenance and insurance aren’t where they want to spend their money. Cars are there to get them from point A to point B. They are the perfect Uber demographic.
The future of cars
Which goes back to my original point. Our millennial generation and their offspring, as consumers, are likely to shape the future of transportation. They will own fewer cars, and will use ride services more frequently.
This, I believe, bodes poorly for the automobile industry. Unless, of course, they adapt and replace current revenue sources with visionary replacements.
Given climate change and all the repercussions it will have on our global society, those visionary solutions will have to include zero carbon emissions, renewable energy sources, sweeping safety improvements, cost savings, convenience, and, ultimately, incentives for reducing the number of vehicles on the roads.
Solve those problems and you’ll have a thriving automotive industry.
But, make no mistake, it will be an industry that is dramatically transformed from the one we have today. In 20 years, things will look likely a lot different than today.
While there will still be automotive enthusiasts who own petroleum-fueled cars, their number will continue to shrink. The cost of keeping those cars on the road will be high, with carbon taxes, spiraling insurance costs, and other disincentives making it ever less appealing.
Population growth in cities and suburban areas will increase the need for living space, in turn diminishing the number of two-car garages—and in turn, the number of cars people will own.
Many people, even those who can afford cars, will opt to go without. The ubiquity of Uber-like ride services will grow. Driverless cars, vans, and buses will be the norm.
The ease of hailing transportation to go to work, to shop, to go virtually anywhere will be exponentially easier, and cost-effective. Our air will be cleaner, and the number of automative accidents and road deaths will approach zero.
All vehicles on the road will be tapped into a huge communication infrastructure that will improve traffic flow and eliminate gridlock.
Sounds utopian, I know…but I can dream, can’t I?