02 Feburary 2014

ENTERPRISE WORLD
FUTURES

AUTONOMOUS CARS AND PUBLIC TRANSPORT: AN OPPORTUNITY RESPONSE

617399 | Harry Sumpter

Executive Summary The automobile market is absolutely immense, cars are the most common form of transport and used worldwide. Autonomous cars reverse to cars that possess the ability to be driven without human intervention, through pre-programmed instructions, or directly through a web link. With recent developments of many automobile companies and technology giant Google researching and developing their own autonomous cars, this report seeks to understand how they will be utilized by society in terms of public transport; such as taxis and car sharing. There are numerous factors that will affect autonomous cars being publically available. An extensive PESTLE analysis has been carried out, along with a SWOT in order to identify all major developments that may affect autonomous cars. After this, a systems archetype diagram was drawn in order to understand how various trends would interact with each other to produce different futures. Then, all uncertain factors were plotted with Wilsons Matrix in order to identify the major trends.

Identification of Trends with Wilsons Matrix Pillkahn originally suggests using a simple 2 X 2 matrix as a means of identifying trends, however, due to the fact a thoroughly in depth PESTLE was used there were many more uncertain factors. (Pillkahn, 2008). With this in mind Pillkahn suggests using a more broad approach in order to encompass more trends, shown below on Figure 1. The scores are based on a scale of 1 10, with 10 meaning a high impact and high certainty. The scores are then plotted onto a graph Figure 2 allowing us to individually assess each of the most important factors and whittle them down into key trends.

A B C D E F

Job loss within the transport sector Laws passed allowing testing Rise in Taxi apps Rise in Car Sharing High cost of production Car ownership insignificant to Generation Y G Less pollution H Insurance issues I Emerging technologies such as SARTRE Figure 1

Potential Impact 5 8 7 7 4 8 5 4 7

Occurrence Probability 7 7 8 7 6 9 6 4 6

Wilson Marix: Evaluation of Critical Trends

10 9 Impact on Further Development 8 7 6 5 4 3 2 1 0 0 1 2 3 H E F

Important

Critical
A G

C D I B

Irrellevant
4 5 6 7 8 9 Occurrence and Projection Uncertainty

Due to the large amount of important factors shown on the graph, the highest scoring trends have been amalgamated in order create a diverse scenario; Automated Taxis and Car sharing services. This is due factors considered in the PESTLE analysis shown below and the SWOT analysis featured in the Appendix. Political The UK government permitted the testing of driverless cars on public roads in 2013. This is part of a 28 Billion investment in British roads to reduce congestion. (News - Technololgy, 2013) The UK government wants the UK to be the World Centre for driverless cars. (News Technology, 2013) In the national infrastructure plan for 2013 the UK government says its looking to review the legislative framework for driverless cars and create a 10 million prize for the development of driverless cars. (National Infrastructure Plan 2013, 2013) In America Google has been lobbying various states to allow the use of its driverless cars on their roads. It has invested significant amount of money more than $9 Million in 2012, to change the laws regarding autonomous vehicles on US roads. They have even given legislators rides in its selfdriving cars in order to persuade them that the. (Efrati, 2012) Colorado in America rejected a proposal for a driverless car. (Colorado Rejects Driverless Car Proposal, 2013) Economic In the Whitehouse, policy makers believe that autonomous cars could have a positive impact for economic growth (Rosenbush, 2013). The economic impact of crashes is also significant. More than 2.3 million adult drivers and passengers were treated in U.S. emergency rooms in 2009. According to research from the American Automobile Association (AAA), traffic crashes cost Americans $299.5billion annually (KPMG, Self Driving Cars: The Next Revolution, 2012). Considering that driverless cars are likely to be more fuel efficient due to the new technology and reduced times stationary due to traffic. This would lead to lower carbon emissions, and lower use of fuel. Overall helping the economy by reducing the reliance on oil. Less reliance to oil could bring a benefit to nation trade. According to RCF, a Chicago-based economic consulting company, oil rose to $120 a barrel making it the cause of 75% of the US trade deficit in 2008. (Kenley, 2011). If a country has to import excessive amounts of oil this could lead to a trade imbalance. Reducing the overall dependence on oil could help fix this. Due to the novelty, scarcity and huge amounts of advanced technology, it could be assumed that in the early years of them being publically available, autonomous cars will be too expensive for the average consumer. Especially considering the recent economic turbulence that many countries have faced. This does, on the other hand, make them more viable to be used as public transit, such as

taxis. Currently there has been a surge in companies that offer on-demand taxi services through the use of smartphone apps. (ABIResearch, 2014) The company Uber, connects users with of its many taxis from its diverse fleet of cars through its app, available on tablets and smartphones. The user can specify the car needed, order it and track it as it makes its way towards them (Uber, 2014). Big name brands have taking a liking to the prospects of Uber, with Google recently investing $250 Million dollars. One can speculate that this could be a strategic move with a future vision of coupling it with its autonomous cars (Hof, 2013). Social In 2010, there were approximately six million vehicle crashes leading to 32,788 traffic deaths, or approximately 15 deaths per 100,000 people. Vehicle crashes are the leading cause of death for Americans aged 434. And of the 6 million crashes, 93 percent are attributable to human error (KPMG, Self Driving Cars: The Next Revolution, 2012). Owning a car, and driving is viewed by much of Generation Y as not cool. (Tuttle, Gen Ys Take on Car Ownership? Not Cool, 2012). In 1983, 69% of all 17 year olds had driving licences, in 2008 this only half did. This is blamed on the recession, the rising prices in fuel and car insurance. (Tuttle, Fewer Teenagers Have Drivers Licenses Because of Gas Prices and the Internet?, 2011). Research has also shown they prefer to drive Hybrids and Electric vehicles (Tuttle, Will Gen Y Lead the Shift from Gas-Powered Cars to Hybrids and Electric Vehicles?, 2012). The Google Driverless car is a Toyota Prius a hybrid car, the driverless cars of the future are also likely to be hybrid or electric due to their efficiency. The pods set to carry people around Milton Keynes also run on electricity. Generation Y consists of about 80 Million people born since the 1980s who make up one the most sort after marketing segments the largest since the baby boomers. 1 out 4 new automobiles sold this year and 40% of the vehicles sold in the next 10 years will be purchased by Gen Y consumers (Deloitte, 2012). They want their vehicles to be like their smartphones an extension of their social-media and digital life-style "Gen Y consumers are willing to pay for technology that can help them better manage all the distractions created by connectivity," says Vitale. "On average, they will shell out approximately $2,000 for a bundle of safety features like collision-avoidance systems, blind spot detection and sleep alert systems. In fact, Gen Y respondents graded safety bundles as their second most important priority right behind technology bundles when ranking their desire to buy additional vehicle features." (Deloitte, 2012).

Figure 12 (Worldbank, 2014) This graph shows the growing population of the UK, higher than the US and Germany.

Figure 21 (Leibling, 2008) Parc is the number of cars that are available in the UK those that are licenced and those that are temporarily off the road. The car parc has risen from 19 Million in 1971 to 31 million in 2007 an average growth rate of 3% per annum as shown in Figure 1. Growth has slowed in the past 3 years, however if it continues over the same linear basis there will be over 37 million cars in the UK. If you take into account the accelerating population growth there could be 44 million cars by then. (Leibling, 2008)

Technological The SARTRE (Safe Road Trains for the Environment) project is a joint research objective by Ricardo UK, Volvo, the European Union and many other research groups. The aim of the research is was to investigate and trial technologies that could allow the safe platooning of vehicles (wherein several vehicles are linked together in a road train with only the lead driver in control) (SARTREConsotrium, 2012). The research is now finished and Volvo is looking into getting the final product onto the road. Successful test runs of SARTRE were carried out on Spanish highways in 2012 (Millikin, 2012). Due to the fact that the cars travel closely together, this cuts down wind resistance, raise fuel efficiency by up to 20% and fir three time as many cars in a single lane. (Brandom, 2012) Adaptive cruise control, an extension of cruise control is becoming increasingly popular in the U.S, Japan, China and European countries. It uses on board sensors to automatically adjust the vehicles speed in order to keep it a safe distance from the vehicles in front of it. Car manufacturers such as Audi, BMW, Mercedes-Benz, Volvo, General Motors and the U.S provide Adaptive Cruise Control as a standard or optional feature of a number of their passenger cars available for sale. As the BBC notes Much of the underlying technology for autonomous driving is already installed in cars such as the Mercedes S500 which uses onboard radar and 3D stereoscopic cameras to gauge the distance from other cars. (BBC, 2013)

Figure 31 (Rohan, 2012) As this graph shows, use of advanced spatial awareness sensors on the rise in Europe, Americas and Asia.

Heathrow airport has autonomous pods that pick up and drop off passengers parking in its business car park. In May 2013 the system celebrated driving its 1,000,000th autonomously driven mile. (Heathrow T5, 2013). However, the pods are on a set walled-off track so if something did go wrong with the navigation it would probably go un-noticed. The same company is designing and supplying autonomous pods for Milton Keynes however unlike the pods at Heathrow, these will have GPS, high definition cameras and sensors. The pods will have a max speed of 12 Miles Per Hour and customers can book and pay for journeys on their smartphones, at the expected price of 2 a journey. The data captured by autonomous cars can tell people where youve been and at what speed. This data could be used by the authorities, insurance companies, courts and accident investigators. (English, 2014). This is a huge invasion of someones privacy if the data is not kept heavily encrypted. The safety of a car could even be compromised. Considering the cars will be constantly connected to the internet there will be numerous possibilities for unauthorized access. Modern cars have more than 100 electronic control units that have operation of things such as cruise control, automatic transmission and navigation. If any of these controls were externally tampered with at high speeds it could cause a disaster. (Stansfield, 2014) "It's a serious problem," admits the president of infotainment at Harman, the company which supplies luxury audios and connectivity services to many leading car manufacturers. "A hacker could take control of very critical vehicle functions." (Stansfield, 2014).

Legal Who gets insured, the driver or the software company? The UK government permitted the testing of driverless cars on public roads in 2013. This is part of a 28 Billion investment in British roads to reduce congestion. (News - Technololgy, 2013) Google had to log the first 140,000 miles of its autonomous cars in secret originally, as it was not legal. The first legislation for Google to test its driverless cars was authorized in Nevada in the US. The state also said it plans to licence public autonomous vehicles owned by the public. "The vast majority of vehicle accidents are due to human error. Through the use of computers, sensors and other systems, an autonomous vehicle is capable of analysing the driving environment more quickly and operating the vehicle more safely," California state Senator Alex Padilla said in March when he introduced that state's autonomous car legislation. (Slosson, 2012).

Environmental Due to the smoother driving and less variance in acceleration and braking there would be lower carbon dioxide and particulate emissions for self driving cars. However, self driving cars would also

mean more people who could not drive before can now drive perhaps leading to more cars on the roads and increasing emissions. More autonomous vehicles on the roads may lead to more car sharing while this is a good thing, some research suggest that car-sharing could increase the number of journeys made by car. Why would someone want to take a train and two buses when they could share a car for an hour. (The Parliamentary Office of Science and Technology, 2013) The majority of cars that are being developed for the use of autonomous cars are hybrids, such as the Toyota Prius. (Lavrinc, 2012)

Conclusion, while there are numerous security risks (identified in the technology section of the PESTLE, and Weakness and Threats in the SWOT). The rising technology, social acceptance point towards it being a viable option

Appendix 1 - SWOT 1.1 Strengths People are already paying more for advanced driver assist packages when purchasing new cars. (KPMG, Self Driving Cars: Are We Ready?, 2012) Big name brands behind self-driving cars such as Google, BMW, Tesla. Environmentally friendly. Accessible to anyone. 1 . 2 Weakness Privacy and security issues in recent polls, the main concern the public had with driverless cars was the possible loss of privacy. In a Poll conducted by the Alliance of Automobile Manufacturers about 75% of respondents said they were concerned that companies would use the software that controls a self-driving car to collect personal data, and 70% were worried that data would be shared with the government. Asked whether they were worried that hackers could gain control of a self-driving vehicle, 81% of the respondents replied they were either very or somewhat concerned about that threat. (White, 2013). Autonomous technologies rely on wi-fi networks to control a vehicle careening down the road. These involve massive data streams of 1 gigabyte per minute monitoring all aspects of the vehicle, keeping it at speed, in place on the road, with myriad variables to contemplate like staying tuned to roadside sensors, mindful of stray pedestrians, objects in the road, curb sides, street signs and signals, and more. The data stream needed to control driverless cars would be immense, and would be too much even for the current 4G LTE networks of today. The challenge is no longer with the automotive industry but with the IT industry. (Cobb, 2013). Driving in slippery conditions such as snow and ice is something you tend to learn, this may be hard for a computer to navigate. Due to the need of a connection, self driving cars may have trouble navigating rural areas where connection is weak. If there are road works, how will the car understand? Various infrastructure investments will be needed to handle self driving cars to make them worthwhile in terms of time saving during commute times. Someone is needed to invest. What kind of product liability and insurance policies will these vehicles require.

Security is a huge weakness, considering that cyber-security is a growing global threat, how do you ensure that self-driving cars are protected from cyber attacks. Hackers, or terrorists could steal data on driving routes and track vehicles. Denial of service attacks could be used to bring down networks, causing chaos to whole networks of car operating systems. Privacy has been a huge issue recently, regarding the recent revelations about Americas National Security Agency, and the amount it monitors people all over the world. (Paul, 2014). Google is essentially an advertising company at heart using what your search on its search engine to target specific advertisements towards you. (Google, 2014). Will this be the same case with its driverless car? Tracking the locations you drive to the most in order to tailor more adverts towards you Current laws may not be able to protect the public from data collection of advanced technologies. In early 2012 the Federal Trade Commission issued a report urging greater transparency from data brokers. (FTC, 2012). 1.3 Opportunities Traffic congestion costs Americans 4.8 billion hours of travel delay each year, amounting to a cost of more than $100 billion annually in delay and fuel, $23 billion of the delay cost can be attributed to the effects of congestions on truck operations. Automated transportation systems could remove most urban congestion and allow traveller to make a much more productive use of their time while travelling. In 2010, an estimated 86.3% of all workers aged 16 years of age and older commuted to work in a car, truck or van 88.8% of those drove alone, while the rest car pooled. Therefore over 90% of workers in the US drive to work considering that the average commute time is about 25 minutes, approximately 80% of the US workforce loses 50 minutes of potential productivity every day. Self driving cars could be customized to fit the needs of the consumer, in regards to workforce it could be a mobile office. The disabled and elderly would have the opportunity to travel without the need of assistance. 1.4 Threats Public transport is cheap, subsidized and highly effective, it has been implemented for the long run and is what most people are used to and is commonly thought of as quicker. Buses and trains are used by the majority of the population, especially in densely populated cities such as London. For driverless cars to catch on, much of the population would need to be using them. People are happy with healthy, cheap alternatives such as cycling.

Self driving cars would mean a complete overhaul of our current road infrastructure years of policies and laws that have been implemented would also need to be modified. Every road would need electronic sensors. Car enthusiasts would not want to give up driving, they find it extremely fun, what would Jeremy Clarkson, presenter of driving show Top Gear have to say? Economic disaster there would be job loses everywhere, no longer a need for lorry drivers or cab drivers. Unions would most likely get involved.

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