WHY THE DEMISE OF THE PRIVATE CAR IS JUST AROUND THE CORNER
Futurist Tony Seba tells James Langton that by 2030, corporate-owned, driverless vehicles will rule the roads
Tony Seba is a disruptive influence. Or at least, that is the message he has for the world.
Mr Seba predicts that in 12 years the age of the private car will be over. We will all be driven in fleets of corporate-owned driverless vehicles summoned in minutes. And that it will cost us a 10th of what it does today.
It is an ambitious prediction. But Mr Seba, an academic from Stanford University in California and self-described serial Silicon Valley entrepreneur, has no doubt he is correct. What is coming, he says, is a confluence of technology in transport that will dramatically push down the price of what we pay to drive around.
“Essentially, when you get a similar product of service that is priced 10 times cheaper, you’ve had a disruption,” he says. “Every time, since 1454 [the year the printing press was invented].”
Disruptions are what Mr Seba calls sudden and dramatic changes in the way we live as a result of different new technology converging.
In his talks, which include one in Abu Dhabi last week at the World Future Energy Summit, he makes much of the arrival of the car and the internal combustion engine.
On the streets of New York in 1900, all traffic was pulled by horses. Within 15 years, four wheels had almost completely replaced four legs.
That is not the entire picture though. Population studies show that there were four million more horses in the US in 1925 than in 1900. By 1930, more than 20 years since the Model T Ford opened up a mass market for cars, the number of horses had fallen, but only by a fifth.
It was only after the Second World War and in the 1950s that the American horse population went into steep decline.
Mr Seba does not accept this challenge to his model of rapid change.
“Essentially we had three minor things happen in that timeframe you mention,” he says. “We had World War One, we had the collapse of the financial system in the US and we had World War Two. You know, these are small hindrances to the disruption.”
Is he seriously saying these events are minor? “I’m just being facetious.”
The coming disruption, the one that will kill the petrol-powered, privately owned car in barely a decade will begin in 2021, when governments permit the general use of self-driven vehicles, Mr Seba says. The first elements are already stirring.
“If you look at Uber, to give a recent example, a company that was started in 2009 had more bookings in 2016 than the whole taxi industry in America. Seven years. That’s all it took.
“In San Francisco 20 per cent of vehicle miles travelled are Uber and Lyft. So disruptions are happening even more quickly now than they have been for 100 years.”
The next stage is the convergence of self-driving cars and electric engines, which will produce what he calls the “10X” phenomenon, when a product becomes 10 times cheaper.
Corporations will buy fleets of electric vehicles, Mr Seba says, using their purchasing power to drive down costs that are already lower than petrol engines.
Compared with buying a new car at, say, US$50,000 in payments over five years, this model is cheaper by an annual factor of about $6,000.
“Essentially, someone who is going to buy a new car is going to make this decision: do I want to spend $50,000 over the next five years to own this thing that I’m only going to use 4 per cent of the time? Or do I want to spend, on demand, $1,000 a year whenever and wherever I want to use a car? That’s a no-brainer.”
He cites another recent example by producing his Apple iPhone 8.
“Folks in 2007 did not get the fact that this was disruptive. They would say, ‘Who would ever want to buy a $600 phone when you could buy the $100 Nokia?’”
“Remember Nokia? Gone. What they did not get is that this is not a phone, it’s a computer. One of the things it can do is make a phone call.
“So why did this happen in 2007 and not 2005 or 2009? The technologies that made this possible at this price happened in 2007. That when the convergence of technologies happened.”
“Lesson two? Disruptions happen from the outside. It wasn’t the Nokias or the BlackBerrys or the ATTs. It was the Googles and the Apples who had never even built a phone before.”
Thus Mr Seba imagines a vehicle that is also a mobile Starbucks to take you and colleagues to work. It all makes economic sense in part because electric vehicles will have a lifespan two and half times that of petrol cars.
“You will need one electric vehicle for every two and a half combustion engines,” he says. “At today’s prices. So the cost per mile for EV’s, even if they don’t get cheaper, is going to be two and half times less. And they will be 10 times cheaper to maintain and 10 times cheaper to fuel.”
What about the love people feel for their cars, for owning a cherished brand that in part defines their identity? The human factor in all this. After all, sales of vinyl records, a technology that was supposed to die in the 1980s, just rose for the 12th successive year.
“We liked horses also, and when the Model T came along? Gone. “In San Francisco, almost 10 per cent of folks who got rid of their car last year did not buy a new one. That’s not a small number. They are using Uber and Lyft. And that’s at today’s prices.
“People are going to stop buying cars because of that. Also the disabled, the very old, the very young, the very poor, who don’t own cars and have really bad public transport, they are going to have little choice but to get on board, and that’s a critical mass of users that is basically going to tip it over.”
Yes, he says, private cars will still be around in 2030. In fact, they could still represent 40 per cent of the total number of vehicles. But they will be driven less and less. The 60 per cent that are self-driven and electric will perform 95 per cent of journeys.
Mr Seba admits there will be challenges. Many people will lose their jobs, especially car dealers and garage mechanics.
His model depends on high population density, so communities a long way from cities are going to need government subsidies if they are not to face prohibitive transport costs. But this already happens, he points out, with electricity and phone services.
Is he sure about all this? “How likely is it that I’m wrong?” Mr Seba asks. “It’s not likely. Track my record. I predicated four years ago here that we would have electric vehicles with a 200-mile range at $40,000, unsubsidised.
“And folks thought I was insane. Guess what – we have two, with more coming. In 2009, I predicted that solar would be three and half cents per kilowatt hour by 2020. Guess what – we are there already.
“This may happen even more quickly than I am saying.”
Essentially, when you get a similar product of service that is priced 10 times cheaper, you’ve had a disruption TONY SEBA Silicon Valley entrepreneur