January 27, 2016
Car makers have recently felt some new pressure and the threat of competition with the announcement that Uber, an extremely valuable start-up company, was in the process of developing autonomous vehicles. This means that, potentially, drivers could use a simple app to order up their own driverless taxi to go anywhere they need to go, as opposed to owning and driving their own car. Uber is in the process of setting up an Advanced Technologies Center for further research into developing a driverless taxi in a partnership with Carnegie Melon University in Pittsburgh. Uber states they are committing to bringing safe reliable transportation to all people everywhere. However, many automakers, such as Volvo and Nissan seem unphased by this announcement. Carlos Ghosn, the chief executive of Renault-Nissan was recently interviewed at a CNBC technology event at Davos. Ghosn believes that car ownership is more to most American people than just merely transportation. He explained that if people simply want transportation they take a bus, taxi, or train. These days, according to Ghosn, people want their own car not only for transportation but for connectivity and for a personalized space. He likens the car to a living space where people can video conference and interface. You have a connection and can have your own photos, music, and your own email. Ghosn says, “….it becomes like your iPhone, you want something to belong to you.” This is why he does not feel threatened by a driverless taxi cab company. Additionally, las Bendrik, chief information officer at Volvo Cars believes that while an Uber taxi service is useful in areas where parking shortages and traffic congestion are at an all-time high, many other areas of the country are ideal places for car ownership. Bendrick feels that people will choose the transportation that they need based on where they are and where they are headed to, not putting automakers out of business. He also believes that the automotive industry needs to assess both the needs of the ecosystem and the consumers. Industry experts and automotive companies are excited about the possibility of driverless cars being on the road in the near future. In fact, Juniper Research predicts that almost 20 million fully autonomous vehicles will be on the road by 2025, with consumer use taking off by the year 2021. However, some in the auto industry, such as Tesla’s Elon Musk, believe that company cars could be picking you up as early as 2018. Ghosn said the testing of Renault autonomous vehicles is already underway in Palo Alto, California, but that these cars may not make it into consumer’s hands until several years from now due to regulations and the reliability of the cars.