It started small. A German built the first practical internal combustion engine in 1876 and then another German invented the carburetor in 1893. In 1903 fifty-seven U.S. automobile companies came into existence and twenty-seven went bankrupt. But one of the surviving companies was owned by a man named Henry Ford. And he changed everything when he introduced his Model T in 1908.
His automobile is an interesting story of success (15 million Model Ts over 19 years) and, ultimately, failure (he refused to modernize the car); but the more interesting story is the story of “consequences.”
- Cars need steel and rubber and glass. In the 1920s, they used 20% of the steel produced in the country, 80% of the rubber, and 75% of plate glass.
- Unlike horses, cars need paved roads. There were almost no paved roads in 1900; 369,000 miles of roads by 1920; and 662,000 miles of “smooth driving” by 1929.
- Cars need gasoline. The first purpose-built gas station was opened in 1905. By 1930, there were tens of thousands.
- Cars and roads made the suburbs possible and single family housing flourished.
Lots of consequences. Now, what might happen when cars DON’T need drivers?
Google, Audi and others are experimenting with autonomous vehicles. Cute? Maybe. Disruptive? Absolutely!
Most cars are idle about 95% of the time. Why own one when you can share one. Really, does everyone need their own car?
What happens when Uber goes into the autonomous car taxi business? No drivers needing sleep, so car utilization could hit 75 – 80%. A study for the city of Austin, TX concluded that an autonomous taxi with dynamic ride-sharing could replace ten private vehicles.
Fewer cars on the road? Less pollution? Fewer gas stations. Fewer parking garages in downtown Chicago.
If trucks become autonomous there won’t be as many truck drivers stopping at roadside restaurants.
What about the insurance industry? Over 90% of auto accidents are due to human error and the three leading causes are alcohol, speeding and distraction. Accidents should decrease (unless the computer stops for a beer). Also, who or what will they insure? Non-drivers don’t need automobile insurance.
Here’s the bottom line. The impact of the automobile rippled across the economy in the twentieth century and looks like the ripple is picking up speed.
If you spend all of your time in the reaction zone you will spend most of your time solving problems. But if you spend more time anticipating the future, you’ll have the opportunity to make sense of it before it hits you. The choice is yours.
What changes are occurring today that will ripple across your industry tomorrow?