DIGITAL SHIFT. Getting on the driverless lane

American automaker Tesla may have got a head-start in self-driving cars, and Google may have logged many miles but the race to launch autonomous vehicles is heating up in other parts of the world too now. If Germany’s Daimler, Audi and BMW have all got the needle moving, Asian countries which were in the slow lane are now stepping on the pedal too. China’s Yutong has piloted a self driving bus, South Korea’s Hyundai is talking of showcasing an autonomous car next year and Japan’s Nissan has stolen a march over rivals Honda, Mitsubishi and Toyota with its driverless mini-van.

India, meanwhile, has just got off the blocks with Tata Elxsi’s announcement early this year that it is looking to test a driverless car on the roads of Bengaluru. Suddenly, driverless vehicles don’t look like just a futuristic Silicon Valley dream, but a global reality on roads in every continent. The bet is that driverless vehicles will be a common sight all over the world by 2025, impacting not just the future of car design and transportation but a whole lot of other areas.

There are many layers to how driverless vehicles are going to cause a big shift in the world. Layer number one is the car itself, its design and function. Some feel that the car of the future may actually be a pod without steering wheels. Layer number two is the way it impacts the car manufacturing industry. With tech firms like Google and Baidu also in the race, there may be quite a few surprises on who emerges as the automaker of the future.

Layer three is the way it impacts the future of transportation — from the way cargo is shipped to how we commute. Layer four is the way city infrastructure will have to re-shape itself to make way for these autonomous vehicles. Cities with fewer cars will redesign public spaces and reclaim vast areas currently reserved for parking lots. Layer number five is how the whole energy equation will get challenged. If electric is the future, then the power wielded by the oil producing companies could see a disruption leading to layer six, a shift in geopolitical power away from oil-producing countries to nations investing in electric power technology.

Finally, it will have an impact on every single person — on the one hand, jobs will be lost, on the other hand, productivity will soar for the many who spend hours on their daily commute. Commercial vehicles may be among the first vehicles to get fully autonomous, leading to a huge impact on truck driving jobs that provide employment to millions. In between, there are a whole lot of issues ranging from regulation of public spaces, insurance of autonomous vehicles, liability for manufacturers in the event of accidents, which need to be tackled by both the technology and policy camps.

But more on this at a later date. Let’s first look at the way the autonomous vehicle movement is shaping itself currently.

Driverless vehicles may hit the roads by 2020, but we probably will see a very phased entry. Phase one, by all reckoning, will be limited to highways, as it’s easier to set up dedicated lanes and governance systems, and vehicles need to deal with fewer variables than in city driving. And rather than personal transportation, cargo carrying trucks are likely to go driverless at first.

Automated commercial fleets will lead to as radical a transformation of logistics and shipping as mechanisation did to agriculture. We got a glimpse of this recently when a convoy of self-driving trucks traversed through Europe and reached the Rotterdam port. The savings in time, fuel, and labour costs are obvious but a world with an autonomous fleet of commercial vehicles is also one where global logistics runs on autopilot.

Once the highway experiment takes off, we could see the onset of the next phase when automated cars would enter city limits. But before we see city-wide rollout, they would be tested in pockets in the city with well defined systems and fewer variables. Examples may include university campuses or city centres that become pedestrian-only with autonomous buggies plying around. The simplicity of the vehicle’s environment will govern where autonomy can best be implemented.

Phase three, when driverless cars hit the main roads of cities, will be the most challenging one in its development. But for phase three to happen, cities will have to take on a new shape. The entire planning, infrastructure and cityscaping will have to undergo rethink. Some envision a future city where commuting will be entirely on government run driverless buses freeing up garages and parking spaces that could be put to other uses. Others are working on a city scenario where driverless buses, automated cars and a person on a bicycle automatically communicate with each other. Machines will directly converse and make micropayment, reroute themselves, and take other actions.

At the other end of the spectrum, as driverless cars gain adoption, automakers will need to shift their approach. The focus of these companies will shift from vehicle performance to the vehicle’s interaction with the ecosystem. In a connected car environment, competitive advantage will come not from product features but from network effects – or how a vehicle can leverage the intelligence of the network better than its other connected peers. Instead of process excellence, we will see interaction excellence taking centrestage. This is going to lead to new tie ups and collaborations as automakers will work hand in glove with tech firms and start-ups to convert vehicles into social devices. A car will not only have to navigate roads on its own, but transmit its information, as well as process in real time the collective intelligence of a community of connected vehicles.Tech firms are working overtime to connect these dots.

There’s Waze, a truly social network that connects cars, phones and people that is speeding ahead on navigational technology. The firm, acquired by Google for $1.1billion creates a constantly updating repository of traffic information. Amazon and Apple too are getting into car dashboards with a range of intelligent solutions for a connected journey.

There’s miles to go before we reach full autonomy. But the benefits will start appearing even in the short term as some specific scenarios start relying on autonomy.

Final part of this article appears next fortnight. Paul Choudary is the author of Platform Scale and Platform Revolution and founder of Platformation Labs. Narayanan is Editorial Consultant