Everyone’s keeping an eye out for how autonomous vehicles (AVs) are developing. And everyone’s asking the same questions about who’s going to be the first players to hit the market:
Which automaker will hit Level 3, 4, or 5 autonomy first?
Who’s going to build the cheapest LIDAR?
Is Uber or Lyft going to be the first to offer AVs?
But, there’s also one more important question people should be asking:
Besides its effect on mobility, will AVs have any other impact on society?
It’s a shame that we’re not considering this question more because there will be a lot of value creation opportunities in these so called “secondary effects.”
Why do I think that’s the case? Well, let’s look at some of the secondary effects that hit society when we first started to massively adopt automobiles into our lives:
For one, the debut of automobiles completely changed urban planning by creating a rise in suburban areas. More people were moving away from the city and into the suburbs since they could now commute to jobs farther away from their homes. The way people found and consumed products changed too, with the creation of mega shopping malls and the use of billboards as a new marketing tactic. Pop culture and social lifestyle also reinvented itself because people could do more things that were farther away from them and the idea of being able to afford a car put you in a higher social standing.
These were just a few drops in an ocean of secondary effects that came to be when we massively adopted the first feasible cars. When most people were able to afford a car, society went through an evolution.
And while AVs will be more of a socioeconomic revolution rather than an evolution, we could still see a lot of secondary effects in the decades to come. An example includes changes in the workforce — taxi drivers, certain car mechanics, and traffic officers will no longer be professions.
But here are three less obvious areas that I think will experience secondary effects when we massively adopt AVs:
- Land and Property Use
1. Land and Property Use
Months ago I wrote a short article talking about how it won’t make sense for people to own cars in the future because ride-sharing apps like Lyft and Uber will be our go-to when it comes to moving from point A to point B. In an ideal world, where no one owns a car, everyone requests a ride through their phone. This means that the ride-sharing companies would own the cars themselves and manage them in fleets. These fleets would most likely be in dedicated parking lots which would serve as distribution centers. We’ll also rarely see cars sitting idle — they’ll always be on a route to some destination rather than being parked by a sidewalk, at a shopping mall, in a garage, and so on. When a car drops someone off, it goes on to the next customer or back to the distribution center for service or layoff during non-peak hours. Cars will be utilized more, but they’ll take up less space.
This means that a lot of space is going to be repurposed. Think of places where cars sit idle for most of the day and you can anticipate some changes.
Houses are one of these places. Modern homes, with a standard one- or two-car garage, can have their garage space repurposed to become another bedroom or living space. This also gives a chance for homeowners to earn more rental income, which is also great news for renters because of greater supply in the market. The same logic also applies to driveways because they’re no longer needed either. This could also affect property prices. We’ll also see new homes have a change in architecture and design to take these transformations into account.
Most parking lots are also going to be repurposed. It’s estimated that there are as much as 2 billion parking spaces in the US alone and a third of them are in parking lots! That’s over 42 billion square feet of space which can be spots for new homes, office buildings, retail stores, factories, and much more. It’s not just parking lots that will go through this change —the land below gas stations and car mechanic shops will also be repurposed.
Urban planners need to start rethinking how to build cities too. With AVs, people can reach farther destinations meaning there will be even more suburbs, or “suburbs on suburbs.” There’s also a problem of pedestrian walkways at major intersections. With AVs, there’s no point in having traffic lights and intersections will be much easier to navigate (see below). But, where will people walk without affecting the efficiency of intersections? Will pedestrian-only bridges have to be built over major intersections?
AVs will mark the end of the word driver since every person in a vehicle can use their time on a journey in whatever way they please, such as by reading a book or sleeping.
This means that we need to rethink what the inside of a car looks like. Rather than being thought of as a mechanical machine strictly for mobility, cars will transform to become “living rooms on wheels.” Companies like Panasonic are already one step ahead on what this might look like with their Autonomous Cabin concept. They believe that AVs will have features such as augmented reality windows to highlight points-of-interest (see below), digital tables at the center of a car for entertainment, coffee machines, fridges, and more.
Of course, all of this also comes with new opportunities for advertising. The most obvious and simplest way to advertise in these AVs would be by displaying ads on a car’s infotainment system (like the way in-app mobile ads work).
An even better way to showcase ads could involve fusing features of a car’s infotainment system. For example, when a passenger finds a new point-of-interest like shown in the GIF above, a promo related to the place, such as a discounted hotel rate, appears.
Social media platforms can monetize in the AV space too. Facebook, for instance, could be an app in a car’s infotainment system letting passengers access News Feed. In addition, Facebook could allow brands such as McDonald’s to purchase “AV-enabled” ads. For example, McDonald’s can buy an ad that advertises a new menu promotion. A passenger may click on the ad and accept a detour for the car to navigate to the closest McDonald’s restaurant on the way to their final destination.
AVs could also be a new point-of-sale for retailers.
Specifically, convenience store chains have the most to gain. Lots of Uber and Lyft drivers offer different snacks, Advil, and phone chargers to their passengers in hopes of receiving tips and five-star ratings. A company called Cargo saw this trend and is taking advantage of it. Cargo is a small startup that basically leases mini-vending machines for Uber drivers (see below). When passengers are on an Uber ride, they can go to Cargo’s website and buy products they would typically see in a convenience store. Cargo is a business in a box where drivers don’t have to lay any funds or manage any inventory–and they’re compensated through a sales commission. The exact same value proposition can apply to passengers in an AV. Convenience stores chains, like 7-Eleven, should take note.
It’s near impossible to list every single secondary effect AVs will have on society because we don’t know what other opportunities will come. But, what we know for sure is that there are a lot of value creation opportunities across the board so it won’t be surprising to see more AV-centric startups being founded every day. Companies, governments, and the whole of society are about to go through a period of change like the one we saw with the arrival of the first feasible cars many decades ago.