A study by global technology giant, Intel, has revealed that the growth trend surrounding autonomous driving will create a passenger economy worth some US$7tn by 2050.
The passenger economy will expand exponentially as active drivers become idle passengers, per Intel research – with the market excepted to grow from $800bn to upwards of $7tn.
Similar to how personal computing and the internet stimulated the emergence of new business models and job roles, autonomous vehicles are already forging a new industrial sector, disrupting long-held patterns of car ownership and usage, not to mention design, manufacture and maintenance.
Intel CEO, Brian Krzanich explained: “Less than a decade ago, no one was talking about the potential of a soon-to-emerge app or sharing economy because no one saw it coming.
“Therefore, we started the conversation around the passenger economy early, to wake people up to the opportunity streams that will emerge when cars become the most powerful mobile data generating devices we use and people swap driving for riding.”
Challenging the establishment
Increasingly, automotive manufacturers will transition from vehicle sales to Mobility-as-a-Service (MaaS) models, moving away from personally owned modes of transportation towards mobility solutions that are consumed as a service.
In due course, service, application and content revenue generated by MaaS are expected to displace the value of vehicle sales as core sources of shareholder value creation.
A primary challenge for automakers, therefore, is having to compete with a rising tide of disruptive service providers from across a range of consumer industries, including internet and retail.
The shift in demand coming from car owners and passengers will fundamentally change the landscape of automotive manufacturing. The Intel research emphasises the increasing demand for features the likes of on-board beauty salons, touch-screen tables for remote collaboration, fast-casual dining, remote vending, mobile health care clinics and treatment pods, and even platooning pod hotels.
The term ‘Mobility-as-a-Perk’ (MaaP), another term currently stirring up the automobile industry, suggests that employers, office buildings, apartment complexes, university campuses and even housing estates will offer MaaS in the future to add value to their business.
By 2050, MaaS is expected to make up around 43% of the total passenger economy, with consumer use of MaaS offerings expected to account for $3.7tn in revenue, or nearly 55% of the total passenger economy.
Upwards of $200bn of revenue is expected to be generated from rising consumer use of new innovative applications and services that will emerge as autonomous vehicle services expand and evolve.
Almost 600,000 lives could be saved due to self-driving vehicles in the era of the passenger economy from 2035 to 2045, according to conservative estimates.
Self-driving vehicles are expected to free more than 250 million hours of consumers’ commuting time every year in the most congested cities in the world, potentially offering a considerable productivity and economic boost to nations around the world.