Thanks for the feedback! Let me make my intent clear: I want to sharpen my thinking about what will happen to the auto industry in the next 10-15 years, and the best way I can do that is to write my opinions down and get feedback from others. I can't start that conversation if people don't view my opinions, so of course I'm trying to design a headline to get views. I have nothing to sell or promote, I am just looking for a healthy debate.
In response to jaguar36, my premise is that car manufacturers are not software companies, and that will be their problem. I have no doubts about their ability to make advances related to the hardware side of autonomous cars, including sensors and cameras. But I don't think that will be the hard part about building a ride-sharing service. Ride sharing will require world-class machine learning, routing algorithms, and apps that are wholly outside of car manufacturers' wheelhouse. I think it's very unlikely that a car manufacturer can create the best ride-sharing product in house. It will probably be a software company creating that capability instead and licensing the technology to the OEMs. This will create many of the challenges I allude to in my post.
I think the consumer purchase decision for ride sharing will look a lot different than the purchase decisions we see with the ownership model. Under an ownership model, the most important considerations are functionality (ie size or a capability like towing), value, fit and finish, and durability. If I'm choosing a ride sharing service to use, the most important considerations to me are how much does it cost and when can it get here. Slight variations in fit and finish and durability will be less important because I'm only committed to the car for one ride, not 5-6 years. And I can easily swap in a specific functionality for an hour or day if I need to. This makes cars easily exchangeable for goods of the same type, ie a commodity.
Ride sharing services will benefit from network effects, so the more people that use it, the more useful it is. You're right that the ride-sharing service and autonomy itself will eventually become a commodity, but the network a software company builds up will not. This network will enable the software company to continually improve its cost and availability.
Regarding dealerships, I just wanted to highlight risks to their business model. Who will be buying cars that go into ride-sharing fleets? If it's individuals, dealerships should be fine. If it's cities or car manufacturers putting the cars directly in the fleet, I don't see dealerships being able to make revenue from that transaction. Cars will continue to need servicing, but who will be paying for that service and where will that service take place? If it's just individuals, dealerships will be fine. If cities or big companies are the ones paying for the service, it's unclear where or how that service will take place, or if dealerships will be able to benefit.
Great response and I appreciate the debate!
Seems like you were looking for a headline that would grab views and then wrote the article to match. Your basic premise seems to be that large companies can't transition to new technologies, which has been shown to be false. Its quite possible some of them won't be able to, but the majority will. You also assume that the core competencies of the major automakers will be worthless in this future world, which is also false. The big automakers core competencies are safety, engines, interiors, suspensions, and most importantly high volume, high quality manufacturing. Even if its a fully autonomous ride shared car, people will still desire a good interior, a safe car, good suspensions, and cars that are well built. It's possible electric motors will replace ICE engines, but its not going to happen soon, particularly in a ride sharing environment where time spent charging is time not spent delivering paying customers.
Rather than the car becoming the commodity its just as likely the software becomes the commodity. Once the software reaches a 'good enough' level (something that will happen fairly quickly) its all going to become the same to the end user. That hasn't happened with the other core competencies of the big auto makers and is unlikely to in the future either.
Lastly, I don't understand the random shot at the dealerships. Cars, autonomous or not, ride sharing or not, will still need to be bought and serviced. I have no love for the dealership model, but it seems quite irrelevant to the article.
