The future of the car industry | The Economist

The future of the car industry | The Economist


yeah hip-hop lifts San Francisco California in urban centers across the globe there’s a new ride in town ly F – fist bump if you wanna ride with me swipe I bet you wanna ride with me now why I bet you wanna ride with me now oh yeah decoe aka hip hop lift isn’t your average cabbie he’s one of a growing number of car owners turning their set of wheels into a money spinner the essential tool is a smartphone app so efficient you know my friend customers can summon a car in seconds the meteoric rise of ride-hailing apps around the world is one part of a global transport revolution if you go into any major metropolitan area car ownership is is down pretty substantially and we talk a lot about how riding is the new driving our changing attitudes towards driving a pressing car makers to embrace a future that’s less about horsepower and more about processing power you just have that perfect storm of all these different technologies coming together in one place across the world old industries are facing disruption on an unprecedented scale people are not taking over Texas confronted by ever-changing technology the pressure to adapt has never been greater it is always survival of the fittest that’s capitalism because where there’s threat there’s also opportunity Bangalore India one of the fastest-growing ride-hailing markets in the world settings shanton joined Ola cabs three years ago to become one of Bangalore’s first female auto rickshaw drivers with her job she’s challenging attitudes in this traditional city a millionaire lubricant red brick peroneal terrain and and Videla voila van Bommel a Burakumin chair Yago the model yi Samba customer pick I thought modernity and sexy our studio us today in on a wall on Le what’s the name our tone train Martin who’s she you have a loop on the post polymer on even lady suit to move upon shaggy day engineer yesterday I provide Petrova Mota one or whenever correct very like Ola is India’s most popular on demand right service with 1 million booking requests every day for 350,000 vehicles including rickshaws founded just five years ago the company is now valued at five billion dollars although it’s not just a cab company our mission and our vision and the opportunity for us is to build mobility for a billion Indians in on for the future we are a technology company we don’t own a single cab we operate a marketplace where we aggregate the supply we are get the demand and we connect them in the most efficient way possible owners app connects drivers in their vehicles with customers needing a ride just two percent of Indians owned their own vehicle but by 2017 20 percent of the countries one and a quarter billion population will own a smartphone the market potential is huge there are around 200 million more Trice trips a day in open India there’s a long way to go for us our mission is to add value in each of those trips but one group isn’t along for the ride local cabbies I’m irrelevant got a will over say roll over Johnny chai yet I’m under a kilometer so larvik elevator lathe am i over medic are you ready but we have our Acharya Boris house in other countries the licensed taxi drivers are unhappy the ride hailing apps are undercutting their fares we are totally angry with this company or year up nature of circuit parameter of seed array or market marriage Joep Whatcom rate with a race one sonora bachata a marriage gari a canoe year driver shortage anyway Christina de re to’em logo GoBot Rosa do Callaghan Jaya Carlo now the struggling taxi drivers themselves are being courted by Ola they feel that they’re losing business the great thing is that they can also come onto our platform it’s not as if we are leaving them out we are saying we’ll work with everybody oh let’s drive to expand is partly to keep up with a meteoric rise of international competitors like uber owners formed a global partnership with Asia’s biggest ride-hailing services and rising American star lifts a company that distinguishes itself by its trademark pink mustache the deal will enable these companies riders to seamlessly use each other’s apps when abroad david rust is lifts head of strategic operations that’s all happened going from San Francisco to covering half the world’s population in just about four years we have over 700 people working here we have other offices in Nashville and Seattle as well big part of our brand is how to have fun while getting from point A to point B and we wanted that to greet you right when you come in the office Ubah may be better known but lift claims to be the fastest-growing ride-hailing app in the u.s. last year alone its number of rides and revenue increased fivefold for david rust this uptake is impacting what was once viewed a fundamental right of passage buying your first car for the younger generation it’s a whole different ball game because envision that you grow up owning a smartphone from a very young age and you grow up being able to request a ride from a young age so now when you hit you know age 16 age 18 when you know individuals here in the United States you know normally would get a car and that’s the sign of freedom then you drive to high school and it’s and it’s a big event now you can just request a lift and that’s how many kids are growing up this day and age and it totally changes that paradigm of freedom being driving to freedom being riding a University of Michigan study has revealed a marked decline in the number of new drivers in America over the past three decades it found the percentage of 20 to 24 year olds with driving licenses fell from 92 percent to 77 percent among 18 euros there was an even bigger drop of 20 percent they don’t want the hassle of owning a car maintaining a car buying insurance for the car parking the car for it to sit idle 96% of the time what a what a passenger wants is to get from point A to point B at an affordable rate in an enjoyable way and when you build that experience it is going to disrupt the industry because that means you’re not owning a car it’s a vision that should strike fear into the heart of the auto industry Ford is the second largest car manufacturer in the US and has relied on selling vehicles for well over a century although Ford’s boss grew up in this era of unquestioned car ownership he’s aware it might not continue forever the first day I was able to go down to the Department of Motor Vehicles to get my license I did because at the time having a vehicle meant freedom and for me to connect with my friends fast forward to today you have young people that have all these enabling technologies whether it’s their smartphones and their their their iChatting or they’re playing online their video games or their texting or whatever you know that particular need of a vehicle has somewhat diminished Ford has just reported its best annual sales performance in a decade while it seems unlikely the company would turn its back on a winning formula Ford in sisters preparing for a future where sales are no longer driven by the latest model we are fundamentally rethinking our whole product development traditionally in our industry it’s been about producing the product that thing now we are very much thinking what experience do we want to provide the customer it’s pushing the company into unexpected areas Ford’s go drive hire service is one pilot scheme encouraging people to share its vehicles while Ford shuttle buses are trialing rides on demand the companies even experimenting with electric bikes all it claims in an effort to become less reliant on the traditional business model of a big one-off purchase we’re looking at some of these new enabling technologies as a huge opportunity so things that we’re seeing around mobility around connectivity or vehicles as they become part of the Internet of Things it’s really important for us to look at societal trends because it’s about having one foot in today but also one foot in tomorrow and understanding what does that world going to look like 5 10 and 15 years from now since the 1950s Ford and its competitors have tried to anticipate what will appeal to the car users of tomorrow or ro control um the idea that cars can be about the joy of the ride is nothing new safe comfortable mind if I smoke cigar all that with this wonderful air conditioning but the auto manufacturers aren’t the only ones vying for the passengers of the future Silicon Valley the global hub of technology it may be two and a half thousand miles from Detroit but it’s here where a modern-day fight for the soul of the motorcar is playing out the latest threat to the car industry comes from tech giants like Google who believe they have the expertise to deliver the driverless car Forge response to pitch up on their doorstep we want to participate in that community we want to collaborate with that community but importantly we want to be viewed as part of the community and not just some transactional partner that flies in and you know buys a technology or something like that Ford’s new Research Center is the company’s latest attempt to protect its legacy here they’re determined to avoid a future where Ford cars are just the shell for another company’s technology it’s training the network is evaluating how well the networking works so they’re building the tech themselves determine that car makers will be the ones to bring the driverless car to market each of these have 32 laser beams own and every single one of those is collecting information based on the path of flight between the laser fires out when it comes back we have two antennae here one in the front and one in the rear and because we know the distance between them we can actually figure out both very with high level precision where the vehicle is as well as the direction the vehicles pointed there are no blind spots with the way these sensors are set up so that allows us to see the entire environment at all times and three dimensions enabling a car to see its surroundings is one challenge identifying humans over inanimate objects is another perfecting this software is one of the hardest tasks facing any company trying to create a safe driverless car let alone a car company playing catch-up you can see all of the blue boxes that are showing up around the people so you see it’s only grabbing people in this frame it’s not grabbing the furniture in the room so basically the way this machine learning algorithm works is it it sort of teaches itself much away human learners to detect different objects and starts to recognize patterns so if you put this onto a car when you’re driving down the road your vehicle can tell the difference between like a fire hydrant or a trash can and a human that might be running to the road until very recently this was impossible to run in real time as you can see if I step out of the frame the the moment I step into it I’m boxed in less than a second so that kind of quick response time to where the system can immediately detect that this is a human and I need to avoid this at all costs that information is really important for driving in the city Ford isn’t the only car maker taking on the software giants Mercedes Nissan and others are all developing their own driverless cars but they’ll still have to face the possibility that the general public might not want to own them preferring the flexibility of ride-hailing someone else’s vehicle how you doing my friend all right all right all right I created a hip-hop trivia game that I actually play with my passengers I’ll give it my best shot okay well my question for you is this how much money in debt it’s Kanye West supposedly in right now I’m gonna give it to you anyway because you’re close you’re definitely up there and it’s actually 53 million car makers are trying to answer another question how to find customers and generate revenue in the long term and car hailing app lyft could provide one of the answers in 2016 US giant General Motors invested half a billion dollars in this four year old startup it’s a groundbreaking deal to combine forces and develop a fleet of shared driverless cars you take the hardware and manufacturing operations of General Motors and you pair that with the the you know network and and system and all most operating system capabilities of lyft and it’s really a step towards what the future looks like a software becomes an ever more important factor in how we get around and the commercial benefits of getting a share of the ride become more apparent it’s clear today’s car makers will do whatever it takes to stay in the driving seat when you look at the revenue that people are spending on moving around whether it’s mass transit or uber or motorcycles or whatever put aside planes that revenue that’s about five and a half to six trillion dollars we get zero percent of that we’re looking at that is a huge opportunity Oh


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