As I stood in line waiting for my turn to sign the papers for my rental car, I was alarmed by the fact that this rental company (a reputable company, for the record!) was relying upon computers and software that looked like they were from the 90s. Rental car companies are, seemingly, well-positioned to be AV fleet operators since they‘re already maintaining fleets of vehicles, but one has to wonder….can they handle the significant technological upgrade (amongst other business model changes).
When one looks at the various types of companies getting into the AV space, it’s clear there are strengths and weaknesses associated with each one.
- Rental car companies are already maintaining fleets of vehicles; however, they are not involved in the manufacturing of the vehicles or the development of any technology (outside of partnerships). It is helpful that their locations are typically on or near airports and cities, where there is significant density.
- Technology companies (e.g., Uber, Lyft, Waymo) have a significant customer base and they are clearly strong in developing technology (and financing!); however, they don’t own, maintain, or manufacture any vehicles.
- Auto manufacturers fill in the gap of the prior two categories: they manufacture vehicles, but they generally do not own or operate fleets of vehicles (outside of dealerships) or specialize in technology development.
Interestingly, every one of these companies’ existing business models are threatened with the emergence of the autonomous technology, so it’s no surprise that they’re all finding innovative ways to integrate it into their business models. It is the categorization described above that has led to the gray area that has emerged in recent years. All of these companies are forming unprecedented partnerships and/or investments…here’s a sampling: GM/Lyft, Avis/Waymo, Enterprise/Voyage (a driverless tech company), Uber/Volvo, Uber/Toyota, Hertz/Apple, and the list goes on!
Who will come out on top? It may take more than a decade to see winners and losers emerge, but what do you think?
Lauren – this is such a fun space, isn’t it? There are so many interesting questions to ask and nobody has the answers! My guess is that no one coalition will come out on top, but that we will end up with a handful of different companies. At least that’s the way that I hope it all shakes out.
If one group has a product that is so far superior than the others, competition will falter. That’s when we could see things moving towards the hell version of autonomous vehicles (private, potentially combustion ownership) rather than the heaven version (nearly all shared).
We could end up there, with one supplier, if government turns a blind eye. Alas, that does seem to be happening quite a lot in competition policy these days. Concentration in almost every industry is on the rise. And with it, prices rise and quality falls.
Let’s hope that government has enough sense to know that competition in this market is so very very important.
I love it! Thanks Jon!
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