Here’s an eye-opening chart for your Thursday. It comes from a RethinkX (a think tank) report released earlier this Spring. The report is titled “Rethinking Transportation 2020-2030: the disruption of transportation and the collapse of the internal-combustion vehicle and oil industries.”
The chart shows a projected shift away from individual car ownership and to something the report titles TaaS, or “transport-as-a-service.” (Think Uber/Lyft/Hourcar…)
It’s a classic phase transition:
The report is thick and full of fascinating guesses about the future. The projected shift in car ownership comes from technological shifts around the automobile, where “network effects”, competition, and upfront investments in new transportation technology will create disincentives for individual car ownership within ten or fifteen years. Longer car lifetimes from electric cars, for example, will minimize the use of regular combustion engines.
According to the analysis, which you should read through, far lower costs for not owning a personal car will be the big motivator for social change. The authors argue that cost will be the most important factor in consumer choice, and many of the technological trends support the transportation-as-a-service model.
Here’s another chart which shows how that might play out, taken from Chapter One, “The End of Individual Car Ownership.”
The analysis argues that “the cost differential between car ownership and TaaS will override all other factors that affect consumer choice and ensure that TaaS will be adopted wherever and whenever it is available.”
Here’s a quote explaining the cost trends:
Our demand hypothesis for consumer adoption of new technology is comprised of three elements:
- The greater the improvement in cost or utility, the more likely people will adopt a new technology, as long as other factors do not outweigh cost (see below);
- The greater the difference in cost or utility, the more weight that factor plays in the decision relative to other factors; and
- The scale of the cost savings in relation to disposable income is important. The option of spending about $3,4007 a year on driverless TaaS journeys (or $1,700 on TaaS Pool), rather than an average of approximately $9,0008 a year on a personally owned ICE or EV produces a very significant increase in disposable income. This $5,600 cost difference will widen as TaaS adoption increases and the IO ICE [ed. “individually owned internal combustion engine”] industry faces a death spiral.
Whether you believe the findings or not — and the authors do suggest that “behavioral issues such as the love of driving, fear of new technology, and habit” will be barriers to change — it’s worth thinking about this possible future as we plan our transportation investments that will last for decades.
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