Self-Driving Cars, Rights of Passage and Luxury Marketing

Tesla Model S

Editor’s note:
This is a different article to what you typically find on Ride Hacks. It’s a bit more reflective – perhaps a Sunday morning read, contrasting the usual practical advice that will get you in the wheels of a prestige car this weekend. I hope you enjoy this riff on self driving cars, luxury marketing and the future of Ride Hacks.

There’s no question, the automobile changed the world. Displacing horses with cars didn’t only benefit society with an endowment of productivity, it also cleaned up the mess that horses would make in city streets. It seems obvious, yet we take for granted that our streets are relatively clean, free from horse shit and its friends Mr Fly and Mr Rodent.

Fast forward into any major city in the 21st Century you’ll find traffic congestion, pollution and a pain in the ass for those who want to walk or ride their bicycle around the city.

Am I saying that cars are evil? Absolutely not. Will personal transport be different in 100 years? Absolutely. But there’s no need to be dramatic, let’s look at how personal transport has changed in the past 10 years.

In past times we only had car rentals, placed in opportunistic airport locations and designed for travellers coming to a new city. Now, new transport options have opened up for those who are in their home city, displacing one or all of their personal vehicles for options such as:

  • Uber X — less than a taxi in most cities, split a ride with your friend without being abused by the driver
  • Uber Black/Lux — your on-demand chauffeur, 24/7
  • Mainstream car rentals bringing in luxury fleet — rent a $95k car for only $138 per day such as the Mercedes-Benz SLK
  • GoGet and Hertz 24/7 — on-demand rentals with (less) strings attached
  • Car Next Door and Drive My Car — drive someone else’s car, because it’s a waste just sitting in their garage

Rights of passage

In Australia, like many developed countries, owning your car has been a right of passage. What you drive says a lot about you and what you value. And although some people like to think they make completely rational choices when choosing a car, less than 1% of those people actually have the skills (technically and emotionally) to objectively look at the specifications and facts to come to a conclusion of what best works for them. The reality is that we are manipulated from extremely fine-tuned marketing and social pressure.

Does James Bond have anything to do with the lure for showing up to your next dinner party in an Aston Martin? Yes, I know. Same here.

In my view, the best marketers are luxury marketers, and that includes for luxury cars. If you are Hyundai, Ford or Toyota, you can sell cars to the masses the same way we sell laundry detergent, life insurance and Android phones — find the largest segment who will be hooked from a handful of emotional or practical benefits and just add frequency — sponsor the AFL, run TV ads, cookie and chase people around online.

However if you are Mercedes-Benz, Tesla or Aston Martin, you’re selling something completely different. You’re selling the story of perception. It’s the perception of how others will see you when you’re driving their car. When you drive a Maserati, you become part of their brand and strengthen its appeal to your peers. These marketers don’t care about reach, they care that every customer embodies what the brand values. Sophistication, sex-appeal, opulence, innovation, whatever they may be.

In fact, who doesn’t buy your luxury product is more important than who does.

It won’t take much of a search online to discover an article about a Range Rover where someone says “What a waste of money, my Ford Territory has everything this car has and I spent 50K less. Suckers!”. Needless to say, the Range Rover marketing team really doesn’t want Mr Troll as a customer. He doesn’t see the world in the same way, and never will.

Some people call this ‘class’. Ignoring Marxist implications, there are different classes of customers for every product. Luxury products simply appeal to a select few primarily segmented by the way they think, rather than their ability to pay.

Personal Transport in 2050

There is absolutely no question that self-driving cars will be a critical part of our future. Tesla has already activated existing Model S owner’s cars with Autopilot – a feature which lets the car drive itself once up and running. In a recent Tesla conference call with their investors, Elon Musk dropped the biggest hint that there could be a potential partnership with Uber in the future. Unconfirmed, of course.

Uber’s CEO has also openly admitted that they will be replacing drivers with driver-less cars in the future, perhaps from Tesla. Why wouldn’t they? Their infrastructure is comprehensive, global demand is strong and managing and the ROI of purchasing a self-driving car and ‘putting it to work’ is a relatively easy calculation of microeconomics.

And then we have Google and Apple who are both working on self-driving cars. But they get it — the car will eventually be the easy part, a commodity they could pick off from any of the global car manufacturers. The hard part, and the part they are particularly good at, is building the intelligence and user experience that enables the car to talk to the network.

We know who owns the roads and highways, but who will own this network?

What about governments?

Not many cities have clean and efficient public infrastructure. Sydney, without a doubt, has failed in building public infrastructure that people want to use. Want is the key characteristic here. In fact, despite the cost and social perception, my guess would be that most people feel they have to use public transport in Sydney rather than they choose to.

However, just as mass production had its day in the industrial revolution, and mass marketing has been replaced with permission marketing since the 1960’s, mass transportation will likely give way to the technological advances of personal transportation in the future.

No this doesn’t mean countries with extremely efficient public transportation systems, like Singapore or Japan, will be knocking down their mass transit systems. Rather, it will be those who haven’t been able to break the cultural perceptions of mass public transport who will need the courage to be the champions of the personal transport revolution. Meanwhile, most governments are contesting ride sharing services such as Uber and car sharing services such as GoGet.

Those in power can be limited a business model that takes them out of the centre of the market.

What causes congestion problems within our cities?

People.

Despite coming a long way, humans really aren’t great at the complex mathematical calculations of distance, speed, acceleration, situational analysis and planning. We are, however, pretty good at making ethical decisions that can’t be linked to a logical model. But that doesn’t help with congestion.

Congestion occurs because we are all acting as independent agents in our vehicles, with different goals to everyone else on the road. We are selfish; our code of conduct is a function of fear — if I hit your car it will be expensive, it will waste my time, I have to deal with insurance companies and you probably will be angry.

Think of the busiest road and intersection near your home, or on your way to work. How many people try and sneak around everyone else, just to hold up another line of traffic going in a different direction? How often does a taxi stop without warning to pick up someone waving their hand, whilst slowing the entire road down? Why do you have starting and stopping when you’re on a long bridge?

People.

By contrast, if every car on the road was aware of every other car on the road, then many of these problems would be solved mathematically. If every car on the street had a known destination, traffic lights could optimise based on current and anticipated demand for traffic in the intersection. When the lights turn green, every car will speed up at the same time like carts on a train, not one-by-one in a cascading effect leading to starting and stopping. And parking, what if valet parking was automatic? Where you simply jump out of your car and it will find the most suitable car spot and park itself? Perhaps we could build deeper carparks without all of those two-way lanes for humans.

The footprint of a mass carpark is a function of the common driver’s ability to fight for the closest spot whilst navigating other cars. Carparks could be 10x higher and not take up as much land space if humans weren’t involved.

Autopilot, not capsules

We talk about hybrid in terms of fuel sources. Some manufacturers have bought in, others haven’t. However the broader question is actually: “Will cars drive themselves, or will we have some control”.

I believe Tesla has it right. There have been many designs of the ‘capsule’ style of personal transportation, the kind that has no controls and you just jump in and it takes you around. Maybe Uber might get there one day. Although as cars are still a significant component of our culture (and that of the developing world too), it’s more likely that cars in 2050 will be a combination of a driving experience and a transit experience.

It would be more feasible for cities to restrict cars entering that don’t have embedded intelligence that lets the ‘system’ take over within the city area and manage congestion accordingly.

Ride Hacks in 2050

This site is young, probably too young to make predictions on where it will be in 100x it’s current lifespan. However the purpose of Ride Hacks is to comment on the changing landscape of luxury and prestige driving experiences. With new options opening up every month, you are spoilt for choice and will need a trusted source of information as the world changes. Ride Hacks is just that.

The focus of Ride Hacks is on the experience. Given the rate of innovation, and therefore obsolescence, there are serious questions and concerns around buying an asset that has an uncertain future. Fifteen years ago, before Google, you either owned a car or used public transport. In a short period of time, you have been given the choice. Many choices.

Ride Hacks is here to make those choices easier.

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