June 2, 2017 by Canadian Underwriter
Technology company Intel Corporation is predicting that autonomous driving will cause a new “passenger economy” to emerge to support the idle time when drivers become riders, an economy that will be more than twice the size of the “sharing economy.”
The findings were contained in a new study titled Accelerating the Future: The Economic Impact of the Emerging Passenger Economy and released on Thursday. The study, prepared by analyst firm Strategy Analytics, predicts an “explosive economic trajectory” growing from US$800 million in 2035 to US$7 trillion by 2050 “as autonomous vehicles become mainstream,” Intel said in a press release.
Business use of Mobility-as-a-Service (MaaS) – which will disrupt long-held patterns of car ownership, maintenance, operations and usage – is expected to generate US$3 trillion in revenue, or 43% of the total passenger economy. Consumer use of MaaS offerings is expected to account for US$3.7 trillion in revenue, or nearly 55% of the total passenger economy. Another $200 billion of revenue is expected to be generated from “rising consumer use of new innovative applications and services that will emerge as pilotless vehicle services expand and evolve,” Intel suggested.
“Companies should start thinking about their autonomous strategy now,” said Intel CEO Brian Krzanich in the release. “Less than a decade ago, no one was talking about the potential of a soon-to-emerge app or sharing economy because no one saw it coming. This is why we started the conversation around the passenger economy early, to wake people up to the opportunity streams that will emerge when cars become the most powerful mobile data generating devices we use and people swap driving for riding.”
According to Intel, autonomous driving and smart city technologies will enable the new passenger economy, “gradually reconfiguring entire industries and inventing new ones thanks to the time and cognitive surplus it will unlock. History has proven that technology is the catalyst for massive societal transformation and that businesses need to adapt or risk failure, or worse, extinction,” Intel continued. “New digital business models ushered in by personal computing, the Internet, ubiquitous connectivity and smartphones gave birth to whole new economies. Autonomous driving will do the same.”
The report frames the value of the economic opportunity through both a consumer and business lens and begins to build use cases “designed to enable decision-makers to develop actionable change strategies,” the release said. Highlights of future scenarios explored in the study include:
Harvey Cohen, president of Strategy Analytics and study co-author, said that autonomous technology will drive change across a range of industries, “the first green shoots of which will appear in the business-to-business sector. The emergence of pilotless vehicle options will first appear in developed markets and will reinvent the package delivery and long-haul transportation sectors. This will relieve driver shortages around the world and account for two-thirds of initial projected revenues,” he predicted.
The research firm further points out that autonomously operated vehicle commercialization will gain steam by 2040 – “generating an increasingly large share of the projected value and heralding the emergence of instantaneously personalized services.”
Other key highlights of the report include: