After 15 years within the digital travel industry, spending the last 18 months at the autonomous end of the vehicle industry has been an eye-opener.
The automotive industry's conversations are dominated by engineering concerns, whereas in the travel sector everything comes back to money, power and delivery of the experience in some way or another.
As an engineer I find this refreshing, yet it does make we wonder whether running an autonomous vehicle business, as opposed to an autonomous vehicle engineering project, is correctly timed.
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To demonstrate the difference in thinking between vehicle engineers and travel industry experience designers, look at robo-taxis, the current roll-out strategy chosen by most engineering companies with large scale autonomous vehicle plans.
The concept of having an always available, cheap, consumer-facing service powered by thousands of robots driving around cities looks fantastic.
I can see what makes them an attractive engineering choice but as a first-time consumer experience they leave a lot to be desired - and as a passenger-facing business they are extremely challenging.
As a result, I believe in the near term that robo-taxis are a fool's errand.
Instead, I propose that delivering experiences such as sightseeing via autonomous vehicle makes for a better near-term strategy to introduce the technology to consumers, build trust and to create fleets that can later deliver robo-taxi services.
To explain, here are my six primary justifications:
Business model
Experiences
- Can sell at the price that people pay for experiences, which is set by the market for experiences, not the market for transport.
- Price tends to be person, whereas taxis the price tends to be per vehicle. (e.g. a sightseeing tour can be £30-£50 per hour, per person)
Robo-taxis
- Robo-taxi companies will be competing on price and as a result of low marginal cost, this low price is going to be incredibly low. If you are going to have immediate availability of robo-taxis (e.g. request and one arrives within minutes), you need local oversupply, creating further downward price pressure.
Summary
Following years of expensive technology investment, competing in a low price business environment seems undesirable.
Positivity
Experiences
- One of the great aspects of working in the tours, activities &experiences industry is that on occasion you deliver something amazing and it becomes a lifetime memory. This may be only 1:25 to 1:100 of bookings, but it happens.
Robo-taxis
- With mobility everyone expects the core service as advertised. Anything less than that and you will have unhappy customers.
Summary
Social media will be full of people sharing their positive memories and posting photos from autonomous vehicle experiences and others ranting about why their taxi was 10 minutes late in arriving.
Autonomy time lines
Robo-taxis
- Customers can request to go anywhere within a region. As a result they require entire regions to be mapped.
- Robo-taxis compete against classic transit - if a particular junction is tricky (and has to be avoided), or in the U.K. you say no right turns, classic transit may turn out to be more practical for that particular routing.
Experiences - We can operate static, consistent, repeated, routes.
- We can design for no right turns (or no left turns in the USA).
- We can pre-map everything. We can start and end at the same location where we can have staff.
Summary
For complete roll-out of autonomous vehicle experiences, we only need Level Four autonomous vehicle technology. Fixed routes rather than flexible routes are easier to operate in the near term.
Minimum viable scale
Experiences
- When people go on a leisure trip they seek out experiences. If we can't operate at maximum scale, we de-scale and go upmarket if we have to.
Robo-taxis
- They must become part of the fabric of a city. They must become a habit.
- To create the opportunity to be habit forming, it has to be possible to take a robo-taxi whenever you want to. If you don have total scale within a city, you can't attain this habit forming level of supply.
Summary
One supported autonomous route in a city is no use for mobility, but could work for tourist experiences.
Per trip cleaning
Experiences
- As we generate a reasonable minimum revenue per trip, we can do a human clean after each use.
Robo-taxis
- The vehicle could finish at an inconvenient location and may have only been used for a 1km trip. If you have a fixed cleaning cost, short trips (with minimal income) may not even cover the inspection / cleaning cost.
- Robo-taxis have to solve the robo-cleaning problem to be viable...
Summary
Cleaning may not be top of everyone's lists of challenges but vehicle interiors are going to be public spaces. Consumers will expect them to be clean. Humans being humans, so I'm not sure this is going to be easy to do without having a human inspection after each use.
Global rollout
Experiences
- The sightseeing industry has many incumbent companies with vehicle maintenance and operations yards, in every city in the world.
- Some of the largest global sightseeing companies have 3000+ buses. Vehicle maintenance and operations are part of their core businesses today.
Robo-taxis
- New companies have to create new city infrastructure. This is not so easy even for companies that have existing taxi platforms as, for example, Uber/Lyft drivers live in houses, not in vehicle maintenance garages.
Summary
The bus sightseeing incumbents, although not keen on autonomous vehicles quite yet, will deliver global rollout much faster than having to start at zero with city infrastructure.
Final thoughts...
I am not a robo-taxi denier. I do believe they will come.
However, autonomous vehicle sightseeing will come first, will deliver positive customer experiences and doesn't require complete city saturation to be a viable commercial service.