In early November 2017, Waymo announced that while it will continue its tests in Washington, California, and Texas, it was ready to start ferrying consumers in its fleet of driverless minivans in Chandler, Arizona. Later the same month GM presented their roadmap for autonomous vehicles and details about the mobility services it intends to offer using such vehicles starting in 2019. These larger scale efforts follow a year during which incumbent OEMs, automotive suppliers, global ride-hailing companies, large technology companies, and startups have been demonstrating autonomous vehicles of many form factors targeting a variety of next-generation mobility applications. Automotive OEMs are making important decisions about the role they want to play in next-generation mobility. These decisions will result in five categories of automotive OEMs.
In my book and previous posts I build a broad case for the key role big data and AI play in next-generation mobility, and provide several examples from transportation and logistics. Next-generation mobility is about intelligent, connected vehicles that utilize some form of electrified propulsion, and on-demand shared transport services of people and goods that will be offered through such vehicles. Many of these vehicles will be capable of autonomous movement. Next-generation mobility will help us address some of our biggest challenges, such as pollution and climate change, urbanization and congestion, aging population, and traffic fatalities, while enabling us to maintain economic prosperity by operating highly optimized supply chains that span the globe. It will give rise to a new value chain where big data and AI will play a key role. It is therefore important to identify the new monetization opportunities enabled by big data and AI in the context of this value chain.
In the previous post I described a new value chain that will connect companies providing on-demand personal mobility services and three emerging models for this value chain. This value chain is the result of the consumer shift from a car ownership-centric transportation model to a hybrid model that blends car ownership with vehicle access through a combination of on-demand mobility services and public transportation. It is also based on the stated intent by the providers of certain of these services to adopt Autonomous Connected Electrified (ACE) vehicles. Various acquisitions, partnerships, including the recently announced partnerships between Waymo and Avis, and Apple and Hertz, and investments by automotive industry incumbents and by companies offering, or intend to offer, on-demand mobility services point to new ecosystems that will be developed around this value chain. In this post I provide a deeper analysis of the emerging value chain and explore investment opportunities in startups that will participate in it.
This post first appeared on 4/27/17 in O’Reilly’s site. It has been revised since it first appeared.
In my book The Big Data Opportunity in Our Driverless Future I make two arguments. First, societal and urban challenges are accelerating the adoption of on-demand personal mobility services. Second, technology advances, including big data and AI, are making next-generation vehicles, and specifically Autonomous Connected and Electrified (ACE) vehicles a reality. I define Next-Generation Mobility as the movement of people and goods using a combination of ACE vehicles, and of transport services such as ride-hailing, car sharing, ridesharing, and others that are offered on a short-time, on-demand or as-needed basis. Next-Generation Mobility will cause three major shifts that can lead to the disruption of the automotive and transportation industries: a consumer shift, an automotive industry shift, and a mobility services shift.
In a series of posts, starting with this one, I examine what is causing these shifts, one of the value chains that is emerging as a result of these shifts, big data’s and AI’s key roles in the value chain, and the models being created around this value chain.
With existing business models in many different industries, e.g., automotive, telco, retail, reaching maturity and providing little or no growth, and startups disrupting them with their new solutions, corporations find themselves more than ever in need for creating new businesses. But few corporations are able to consistently create from scratch new, big businesses that use innovative technologies and employ novel business models. For reasons explained here, it is slowly becoming apparent to corporations that the innovation model that is based solely on the efforts of corporate R&D organizations is no longer sufficient for addressing the long-term growth goals they need to achieve. To address these issues, achieve their growth goals, and avoid being disrupted corporations are accelerating their investments, acquisitions, and partnerships with startups in order to access and take advantage of their innovations. However, they must now develop new skills to enable them to select and grow these startup-centric efforts into their next-generation core businesses.