Disruption in transportation is happening everywhere you look. Self-driving Google cars map our roads, ride-sharing startups like Uber and Lyft have made access to taxis as easy as pushing a button on our phones. Electric cars, after having spent many years as an R&D curiosity, are now popular and found all over. Cities across the U.S. have been installing bicycle sharing systems, improving bicycle infrastructure, and encouraging people to ride a bike instead of drive. There are even companies pioneering self-driving trucks like Otto, acquired by Uber. And of course, Elon Musk won’t stop talking about the Hyperloop, his new idea that could revolutionize mass transit.
In the 20th Century, the car was arguably one of the most disruptive innovations ever. It changed everything about how we live, shop, eat, and work. From the creation of the suburbs to the innovation of the destination shopping mall, the car transformed daily life. In the U.S., the Eisenhower Interstate Highway system in the 1950s connected the country with a system of modern freeways and paved the way to establish the car as the undisputed winner when it came to transportation.
As America embraced the car lifestyle, city planning became entirely car-centric. Train tracks for trolleys were paved over, ferry service for commuters was reduced or eliminated. Bridges and freeways went up all over the country. And the U.S., the only nation that produced cars after World War Two, tied it’s identity as a nation so closely to them that apple pie, hamburgers and denim jeans are the only three things more American than the car.
But, the story didn’t end there. Our car based utopia of the 1960s came to a literal stop with the oil embargo of the 1970s. At times people had to line up for hours to get gas for their vehicles. It was not just an inconvenience, the oil crisis made it abundantly clear how vulnerable the entire system was to forces outside of the control of the United States. The economy suffered significantly from the oil shock. The issue became a matter of national security. And has been a major factor in U.S. foreign policy for the past 35 years.
Not to mention the side effects of all those cars. Unbearable traffic congestion and pollution at a frightening scale. The dreams of a car based society quickly devolved into an unscalable, dystopian nightmare. Cars were no longer an icon of freedom. They were now a symbol of environmental crisis and crowded cities.
Technology Offers New Solutions
The problems that the popularity of the car caused has been widely known for years, but solutions have been hard to come by. Regulations were used to reduce emissions, freeways were widened to accommodate more cars, but the basic problems remained.
Today, a wide variety of technologies and businesses are solving the problems of congestion and pollution, disrupting transportation significantly, even calling into question the concept of private car ownership.
Tesla, the pioneering electric car manufacturer, was a key turning point. It demonstrated that creating transportation alternatives were not just talk. It could actually be a viable business model for entrepreneurs.
Along with Tesla, a number of other innovations came of age around the same time. Cloud computing has made software-based startups easier than ever to get off the ground. Access to financing, a notoriously difficult problem for many entrepreneurs to solve, is more plentiful than ever. In fact, it can be only one clever Kickstarter video away. Faraday Electric Bikes is a great example of how traction with a Kickstarter campaign can culminate into another promising company that’s offering a real alternative mode of transportation.
But, it’s the mobile app revolution that’s ushering an even bigger era of change. One so transformative it could call into question how cities are designed and challenge real estate pricing.
Uber, the most well known, offered a simple value proposition. Download an app to your phone. Push a button and a taxi will arrive at your location using the GPS chip in your phone to find you. Simple, easy, scalable, affordable and massively popular.
Big Change is Coming
The implications of this technology and these companies are vast. If an on-demand self-driving car or bus system scales to every urban location around the world, why even own a car at all? What if an electric bike becomes so powerful that it’s the obvious choice to make a run to the store instead of a car? What if peer-to-peer vehicle sharing, combined with self-driving cars, reduces the cost of on-demand taxis to mere pennies? What if the Hyperloop makes travel from LA to SF happen in under an hour?
Could private ownership of cars become a luxury, not a necessity? Yes. Someday, it could happen. And it probably will happen.
Fewer cars would mean less traffic, speeding up travel times in autonomous rented cars. It also eliminates the need for most parking structures, since there is no need to park a taxi or self-driving car. This then frees up all kinds of resources and space that were previously dedicated to private car ownership like carwashes, parking lots, street parking and even driveways. It would fundamentally change our approach to urban planning and make getting around more efficient.
Eventually, in this scenario location becomes less important. You can live far away, but still get where you need to go on time. Shops don’t need to be connected to ample amounts of parking. Commuting to work would be much more manageable. And this all could impact real estate prices, the bedrock of our financial system.
It won’t all happen all at once. The regulation will probably be the biggest barrier to overcome. But, it’s so top-of-mind that even Obama is working on it. I don’t have a crystal ball. And I don’t know exactly how this will all play out, but what is certain, it’s going to be different getting around in the 21st century.
Gregory Kennedy, President and Co-Founder of Uncharted Minds.
Four startup CEOs will discus this topic at the next Uncharted Minds Thought Leadership Series on November 30. Disruption in Transportation CEO Roundtable: Getaround, Scoop, Faraday Electric Bikes and Ridecell. Wednesday, November 30, 2016 from 6:00 PM to 8:30 PM (PDT) @ WeWork Transbay in San Francisco, CA
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