The book I read this week is done by "The Future is Faster Than You Think" by Peter H. Diamandis, a brilliant venture capitalist and the founder of X-Prize. His voice represents that from Sillicon Valley.
In the book, he puts out a staggering amount of reference with 80 pages. It's one of the most referenced books I've ever read. Unfortunately most of them are from tech magazines such as Wired and Forbes. The book naturally leaves an impression of news collections. You will come out of this with shallow impression.
The content is full of amazing ideas in every industry from insurance to education. You will familiarize yourself with uptrend high-tech startups, where I had to Google many of them.
As far as critical analysis goes, there was little numerical analysis other than the amount of venture capital startups have raised or big shots like Goole announced they're working on it. Well, in the past, we have so many examples technology didn't advance nearly as promised which I wished he went in deeper to analyze. This is where the book falls short of highly empirical books like that of Ray Kurzweil. (he did say CRISPR is still a very age as well lab grown meat. I assume it'll take more than 30 years even though he's never explicit with the timeline beyond 5 years).
Nevertheless, he does a fantastic job getting us on top of the current technology trend. Now is the time to grab this book. It'll be outdated in 2 years.
Self Driving Car Remove Ownership?
This seems like a standard view among futurists - the rise of self-driving cars will turn driving as pay-as-you-go service, and people will stop buying cars. That was the narrative laid out by Peter as well. The reasoning behind is because without the driver, rental cost of car itself will drastically drop.
That's partially true. But car ownership will not drop as significantly as these prominents suggest. There are some factors that will work against their proposals.
- Cost of long distance travel
- All you can eat (drive)
- Sense of Ownership
Long distance travel
The bigger drive of loss of ownership will be an ongoing trend of multiplied by the availability of transportation. That assumes city transportation where the destinatino is within 30 minutes. Most of us would like to ride around and make out of city Shinrin Yoku trip however.
Here's a concrete scenario. You want to drive down to Lake Muskoka for a weekend trip every summer. That's a summer shade resort for every Torontonian, that's 2 hour drive away. You will have 2 options in the no-ownership case: one is to rent the car over the weekend, which will likely be $100/day assuming the current cost of rental car. That'll make it $300/long weekend. Two: the driverless cars can drive back itself to the city by itself and you'll have to pay for only the two way round trip.
The first case is where math works. If you make the weekend trip 4 times the summer, which is not an unusual case, that'll add up to $1200/year rental fee cost. After 5 years, the cost will go up to $6000 in 5 years which is quite expensive just for something you use only 4 weekends a year. And this does not account for the inconvenience you'll have to go and register contract with the rental shop.
The second case is very unlikely option because if you want to move around for small shopping near the resort, there will be no Uber like self-driving cars waiting for you. You'll have to wait hours for cars to arrive which come with again the two way cost. In case of emergency, you'll be out of luck. Driving and keeping your car seems like a safe choice and one which gives you the true sense of freedom.
All we can eat (ride) effect
This leads to my second point: we like unlimited access. Have you ever wondered why there are so many all you can eat restaurants? We know they make profit at the end of the day, and most of us cant cover the cost. The beauty is not the cost calculation rationality. It's about having access to the abundance.
Next time you want to do a quick shopping for ice cream down the corner, we don't want to wonder if it's worth the cost of getting a pay-as-you-go car service. We just want to go: "free of charges". That's something beyond the price calculation of capital amortization of buying vs pay as you go.
Sense Of Ownership
We have pay as we go service today. It's called bus. It's called trains. Yet millions of Americans ride on cars. And certainly some of them come with the convienience of driving from home and lack of transportatino availability in your neighborhood.
However, that's not all. Another thing to consider is dirty nature of humanless machines. The futurists imagine the bright self-driving cars only high tech wealthy Tesla owners ride. But as the technology become assimilated, everyone will start to use. What if cars who come pick you up is filled with potato chips in the driving, or smell full of smoke? You wish you had your own cars because who knows what goes onto the driving seat. That may be more true after post Covid.
In reality, it will be split between multiple tier service offering by the self-driving car companies. The highend ones come with the monitoring cost where companies will be cleansing the cars every hour or so. Low end one.. well it will be full of filth. Think of high-end hotels vs highway-side motels. The majority won't be afford the cost of the highend yet they won't like the filthy ones either. Those middle volume would settle down with car-ownership.
What all these mean?
I don't mean to dismiss the future. Car ownership will likely to go down. Or rather continue to go down in the ongoing trends of urbanization. Once we break down the detail of futurism, we will start to understand the reality and the potential entrepreneurial opportunity around those ideas.