Autonomous Cars Could Bring in Billions of Dollars in New Revenue

Mar 6, 2015 | | Say something

In the coming years, self-driving vehicles could rev up Internet revenue by billions of dollars each year, says a new study by the consulting firm McKinsey and Company, which was released Thursday.

According to the report entitled “Autonomous Driving — 10 Ways in Which Autonomous Vehicles Could Reshape Our Lives,” each day of the week, approximately 1.2 billion people spend 50 minutes driving their vehicle, an equivalency of about one billion hours driving and 114,000 years in just one day. Now, what if people spent this time doing other things, such as working or surfing the web?

Hans-Werner Kaas, senior partner and head of McKinsey’s automotive practice, alluded to the fact in this study that motorists could spend this time shopping for goods from their in-vehicle embedded systems or mobile devices. This could generate huge bucks for e- and m-commerce.

The report projects that billions more hours browsing the Internet could lead to roughly $5.6 billion in additional digital revenue for each minute a driver spends online in their modes of transportation.

Furthermore, the group predicts that the popularity of autonomous cars could create a 90 percent reduction in accidents and collisions across the United States that could bring a savings of approximately $200 billion per year as well as fewer injuries and fatalities. This means insurance companies would have to adapt to this changing marketplace.

McKinsey notes that even though Daimler AG’s Mercedes-Benz and Volkswagen AG’s Audi are installing driver assistance systems into their vehicles, they face greater competition from unconventional firms that are able to create fully autonomous car. Nissan forecasts it’ll have a self-driving car within the next five years.

Auto repair shops would be another casualty of the evolving automobile market. Since mechanics would have less work because of fewer accidents, they would have to receive additional training to understand the ubiquity and intricacy of these vehicles’ systems.

It is estimated that by the year 2050, nearly six billion square meters would be transformed into something completely different.

Overall, the adoption of autonomy would take about two decades to fully achieve. But how much longer would it take for the general public to adapt to such a world without humans behind the steering wheel?

“Autonomous vehicles will have a gradual step-by-step adoption,” said Kaas in the report. “First, there will be pay-per-usage models. These vehicles will be alternatives to cars. They will make mobility available in smaller incremental units.”

Tech titans Apple and Google are at the forefront of this autonomous industry. Last year, Google announced its self-driving vehicles that would not even permit humans to drive it because an early version of the car didn’t have a steering wheel, gas tank, brake pedals or mirrors.

Apple is testing out a brand new autonomous vehicle project close to San Francisco – some are speculating that perhaps Apple is collaborating with Tesla in order to enter the highly competitive auto industry.

Despite the advancements of self-driving cars, governments may be the only hurdle for these aforementioned companies to overcome. Many officials and bureaucrats already see autonomous vehicles as dangerous and threats to the road. Perhaps lobbying will resolve that problem.

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