Estimated Time of DepartureThe State of Mobility

The mobility landscape is changing fast. Like the mobile device manufacturers of the early 2000s, car companies of today are being forced to radically rethink their core offering. Like cell phone makers, traditional car companies built their businesses on expertise in hardware engineering and manufacturing, relying on a large network of suppliers, and creating products at scale with long timelines and little input from consumers. In the past, they could focus on incremental improvements to manufacturing efficiency and hardware performance, differentiating their products through branding alone. Today they’re finding their long incumbency challenged by new players with decidedly different strengths.

Today, traditional car brands must compete with Silicon Valley tech giants like Alphabet, Apple, and Amazon—companies with deep software expertise, global brand recognition, and trillions of dollars for investing in innovation. They helped transform the cell phone from a single-function device to a robust platform for a range of services. And now they’re deeply integrated into the everyday lives of consumers in a myriad of ways, offering the full gamut of devices, platforms, and services. Their financial dominance also affords them the luxury of near total freedom to experiment in domains far afield from their core expertise without the need to show any immediate return on investment. With this freedom to fail, they can act as their own disruptors.

Car companies must also contend with a multitude of nimble mobility startups like Tesla, NIO, Uber, and Lyft—smaller companies with youthful energy, no burdensome legacy, and little to lose. Without the defensive baggage of the incumbent behemoths, they can pivot relatively quickly to meet changing market demands. They command a workforce of believers—young, eager employees who work long hours with a passion bordering on fanaticism. Currently, this workforce doesn’t fall under the auspices of the UAW, a union that requires higher minimum wage standards and limited working hours. For now, they continue to experience a level of freedom to experiment and iterate, running on private funding without responsibility to public stockholders or trade unions. And with the possibility of acquisition, they may never need to create a profitable business to be successful. Perhaps most challenging is the sheer number of startups out there. Is Uber suffering? There’s always Lyft. Will Tesla last? Well, here comes NIO. There will always be another startup waiting to challenge the king.

As ever, this disruption is being driven by technological advances. Smartphones have fundamentally changed consumer expectations for device connectivity and functionality. Like cell phones, cars can no longer survive as the single function devices they once were. Vehicles are becoming platforms, enabled by low-cost sensors and screens, efficient electric batteries, and expanding wireless connectivity. Interfaces are evolving with touch, haptics, voice, and augmented displays. Cars are joining the Internet of Things to communicate with other networked vehicles, infrastructure, people, and devices. And they are becoming intelligent through computer vision, machine learning, and a host of connected data and services. Autonomous vehicles represent the culmination of this evolving intelligence, as the car becomes its own pilot and caretaker.

Change is also driven by shifting attitudes around ownership and sustainability. From music to movies to clothing, consumers are increasingly less likely to opt for a small set of privately owned items, and more likely to pay for ongoing access to a massive set of shared goods through subscription services. This inclination is practical—consumers appreciate the variety and immediacy, and can actually earn money through sharing, financing the purchase of a new car by driving for Lyft, or paying for a vacation by renting their apartment on AirBnB. But it’s also a moral and emotional preference—it reflects their desire to participate in premium experiences, but avoid unnecessary waste. As we begin to see the impacts of climate change and air pollution worldwide, consumers feel obligated to make more ethical and sustainable choices. Freedom to escape and connect with people far afield made the automobile king, but in the last decade that has been overtaken by high-speed internet and wireless connectivity. With lagging trends in both car sales and driver’s license adoption in the US, many younger consumers may never even own a car, and those who do are increasingly likely to prefer an electric vehicle.

Another crucial factor is the continuing trend of global urbanization. Today, over 50% of the world’s population lives in urban areas, and that figure is closer to 80% in most of the developed world. The concentration of wealth and population creates efficiencies, enabling services that would not otherwise be feasible. At the same time, urban real estate prices continue to rise, displacing many and diminishing opportunity for sustainable growth. In many cities, more than 50% of central urban surface area is dedicated to streets and parking, and cars remain parked roughly 95% of the time. Autonomous vehicles could radically reshape urban environments by eliminating the need for extensive parking, reducing the number and size of streets and vehicles, and freeing up large amounts of space.

Emerging forms of mobility, along with a steady increase in people working remotely, could also drive a new wave of suburbanization and exurbanization. Suburbs have always grown up around transport, from the early London suburbs that emerged along railways and underground lines in the second half of the 19th century, to the rise of American suburbs after World War II, with the mass adoption of personal automobiles and the growth of the interstate highway system. New forms of transit could drastically increase the range and speed of transport, transforming huge areas of currently unpopulated and underpopulated real estate, and allowing people to take advantage of cities while living far outside urban confines.

Many have pointed to regulation and infrastructure as key barriers to the mass adoption of autonomous vehicles, but governments may soon feel the mounting pressure. Over 80% of people in urban areas are exposed to air pollution that exceeds World Health Organization clean air standards. Much of this pollution can be attributed to greenhouse gases emitted by gasoline engines. This is creating a need for alternative fuel vehicles such as electric and hydrogen fuel cell to help improve local air quality. But perhaps the biggest impetus for swift change is public safety. More than 37,000 people die on American roads each year, and another 2.4 million are injured. That’s about 100 dead and 6,500 injured every day in the US alone. Globally, the numbers are more dire—3,500 dead and 135,000 injured every day. While multiple factors contribute to accidents, including vehicle and roadway faults, human error is the primary contributing factor in over 90% of crashes. In light of statistics like these, the need for change becomes more than just technological convenience—it becomes a moral and ethical obligation to public health and safety. Global regulators have already begun promoting plans to achieve the goal of zero road fatalities, and these proposals rely heavily on the adoption of autonomous vehicles and other emerging forms of mobility.

When Steve Jobs announced the iPhone in January 2007, Nokia, Motorola, and Samsung were the dominant mobile manufacturers, carriers maintained the principal brand relationship with consumers, and operating systems like Symbian, Linux, and Windows Mobile were widespread but largely unknown to end users. Now, more than ten years after the iPhone’s announcement, Nokia and Motorola are all but gone—chopped up, acquired, and reacquired. Carrier brands reside in the periphery while platforms and services sit foremost in the minds of consumers. Today Android and iOS are the only enduring mobile platforms, and the global smartphone market is shared between Samsung, Apple, and a slew of Chinese manufacturers like Huawei, Oppo, Vivo, and Xiaomi. Of all the major manufacturers from before 2007, only Samsung has really managed to survive and thrive after the smartphone wave. As automotive OEMs face a similar sea change, what can they learn from the mobile disruption of the last decade?

As specialists in UX for next-generation connected experiences, Punchcut partners with leading automotive and transportation companies to design new travel and mobility experiences for consumers. Our insight-driven methods, in-depth research, and strategic design solutions deliver critical perspectives on emerging technology and human behavior that drive new product ideas and strategies for growth.

Let us know  if you have an idea worth chatting about regarding the future of mobility experiences. Odds are we can help out!

Contributors: Nate Cox, Shayne Ingham, Jay Jansen, Shawn Relish, Claire Britt, Kerry Gould, Zach Bass, Jared Benson, Ken Olewiler

© Punchcut LLC, All rights reserved.