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Dan PrestonCEO at Metromile
Driverless cars are becoming a reality. What does this actually mean for drivers?
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Years ago, if someone asked me to picture myself behind the (hands-free) wheel of a self-driving car, I probably would have replied: “maybe if I worked for Google X.” But today, my response is different. There have been a myriad of major breakthroughs recently, including Tesla’s Autopilot technology and GM’s investment in Lyft for autonomous car research. The once intangible concept of a driverless car is now becoming a reality, and connectivity is already an essential standard for many new car models. So what does this mean for the consumer? There are an abundance of new opportunities that arise from the mass adoption of connected car technology, and early players are seeing strong success from venturing into this new terrain. In fact, the connected car industry, including apps specifically designed for cars and enhanced navigation, is estimated to grow to nearly $290 billion by 2020. Consumers are hungry for anything that make their lives easier, and more efficient transportation is poised to satiate their appetite.
Convenience is a strong driver of consumerism.
In 2015, Microsoft, Google and Apple all announced plans for proprietary connected car platforms, bringing mobile phone functionality to your car’s console. The buy-in from some of the biggest tech players signifies that the concept of a “dashboard OS” will likely become the norm very soon. Just as software companies are already finding ways to adapt their apps to watchOS and Android Wear, it will soon be imperative to adapt to the car’s operating system as well. In the very near future, cars should be able to seamlessly interact with the world around us without having to struggle with multiple touch points. Beyond the obvious use cases like native navigational apps and text message alerts, we could pull up to a parking meter or garage and our car could automatically process payment. This aspiration could become a reality in the very near future as Visa, Honda and ParkWhiz are already working together to test a mobile payment system that enables consumers to pay for parking and gas without leaving the car.
There is an abundance of ways that connected car technology can make driving seamless and easy. Gone are the days where you had to struggle with a clicker to open your garage, now the door can automatically open upon your arrival. Or, simply throw on some shades to reveal driving directions directly in front of you. Find a way to make a consumer’s life easier with connectivity, and you’ve likely uncovered viable business opportunity.
New advancements are accelerating the introduction of self-driving cars.
Connected car technology is already impacting our driving habits, but the consumer adoption of self-driving cars could bring the most significant change to the automotive industry since its inception. While the concept might seem far off, early advancements indicate this could become our reality sooner than we think. GM recently invested a large chunk of money in Lyft, primarily to fuel an “autonomous on-demand network” partnership. Uber is also clear in theirintentions to utilize driverless cars, and is working with Carnegie Mellon’s robotics program to accelerate the inevitable.
There have also been quite a few developments in safety technology, asTesla’s Autopilot software uses sensors to keep the car within a lane, maintain a safe distance between cars and even change lanes. Volvo is also developing their own autonomous technology, and their latest car models already use semi-autonomous technology to alert of danger and assist with steering and braking. While the driver’s hands are still required to be on the wheel, as the efficacy of these innovations is proven, a hands-free future is imminent.
Technology can be utilized for more efficient pricing models.
Along with connected car technology and the introduction of self-driving cars comes the need for more efficient and flexible insurance pricing models. Data can now be extracted from a car simply by plugging a device into the OBD-II port, the same port a mechanic uses to measure car health. At Metromile, we use an OBD-II device to accurately measure mileage to offer an insurance pricing model that is primarily based on miles driven. If someone doesn’t drive much, they are less likely to be in an accident and therefore will pay a lower premium each month. Other insurance companies like Progressive and Allstate are also utilizing the OBD-II device, yet in a different manner as they assess behavior to offer discounts to drivers with safe driving habits.
Utilizing the OBD-II port also gives way to additional benefits, such as remotely checking car health diagnostics or locating a missing car. In the very near future, we might not even need to plug anything into our cars to utilize these features, as the percentage of new cars with embedded telematics is estimated to soar to 80% by 2018. The bottom line? Whether it’s minimizing the pain of parking or providing a more efficient commute, consumers crave convenience. Now, connectivity makes the hassle of car ownership a thing of the past.
