The non-consumption in mobility that may be unlocked by autonomy
One aspect of the coming mobility revolution that we haven't covered so far is the change in consumption versus non-consumption. Through the lens of Apple, we can observe which industries they have entered and essentially ground the overall market in an industry. They have done that by converting non-consumption: people who previously did not use a product or service have been converted to do so. When this happens on a large scale and covers all age groups and demographics, we call it market expansion.
Horace Dediu recently broke down the industries Apple is in and compared it to the car industry. They have been part of the personal computer revolution of which Bill Gates said the goal is to have a PC on every desk in every home. This statement is about converting non-consumption at its core. In the smartphone revolution, Apple initially targeted 1% market share in the US and ended up selling millions of smart phones outside of this market–not just geographically but to people with no mobile phone or non-smart phones. Tim Cook famously said, all phones will be smart phones eventually. recently, Apple Watch started converting people who do not wear a watch into smart watch users; securing the number one spot of any watch manufacturer globally.
Dediu has been advocating for a long time that in the mobility space, non-consumption is predominantly converted by micromobility modes. People are easier drawn to scooter sharing or a bicycle rather than car sharing or owning a car.
My question, though, is:
What kind of non-consumption would a true autonomous car convert?
To answer that question, we need to look at the two most important markets where Apple car could launch. I have outlined previously why I think the US and China will be the key launch markets for Apple car. In fact, those two countries are at the forefront of autonomous vehicle development already.
But there is one major difference between the two: Access to cars. When comparing mobility access relative to the overall population of each country, the US comes out at the top, in China near the bottom of that list. Of course, the two countries are different in geographic scale, size of population, split between rural and urban population, number of people in middle-class and higher living standards, and the coverage of high-speed wireless internet coverage across the country. Both will be severely impacted in the next 10 to 20 years by the climate crisis and subsequent mass migration from south to north. In any case, the two can serve as classic west and east scenarios we can look at for testing the theory of non-consumption.
Non-consumption in the US and the West
The United States of America have been the dominant economic, cultural, industrial and political norm in the past seven decades. The current western mobility paradigm was specifically driven by postwar US-American designs and points of view. Cities were built around the car, and consumerism in the rising middle-class created an explosion in car ownership. However, there have been a number of demographics excluded from the capital intensive and mortgage driven rise of automobile lifestyles.
Racial conflicts led to the development of privileged suburbs, where again the car was the main idea of getting around and posing with a status symbol. Commuting from the suburbs to the city centres or other economic and industrial centres drove decision-making in transportation planning. Again, less privileged communities have suffered in terms of mobility and their ability to participate in economic opportunities.
As the age of population develops, US Americans get older and will find themselves in a retired group the size of 25% of all citizens by 2025. That is approximately 84 million people. On the other spectrum of the age pyramid, kids and teens represent 18% of the population, totalling at 60 million people. These are age groups who many times rely on public transport or other family members, and in consequence are passive travelers or don’t travel at all. Would South driving technology change that? This certainly depends on the price points that would bottleneck access to autonomous mobility for these demographics, but a significant amount of people in these two groups would certainly have the financial means to start being more mobile.
Finally, distances between cities in the US are either pretty short (when looking at metropolitan areas on the coasts) or pretty long (in the mid-West). So, another conclusion could be that non-consumption would be more easily converted in dense urban regions than anywhere else.
Non-consumption in China and the East
Many argue that China is going to be the defining world power of the next century. This has everything to do with its rising middle-class, which is expanding dramatically in economic impact, and of course the nations ability to manufacture most of the products that are and will be needed in billions each year in the future. New industrial and economic centres are built from the ground up in there are dozens of cities I was thinking millions of people that know western geography class ever teachers.
On the other hand, China is still home to an immense size of rural population. These are mostly older people whose kids have gone to the cities to provide. A fifth of the Chinese population is over 60 years old, this is less relative to the US, but much much more an absolute numbers: 300 million by 2025. Similar to the US, 17% of the population are kids and teenagers, again totalling at 250 million in the next five years.
So this is a significant number of people who are currently restricted from modern mobility, who may find new access points with autonomous and self driving vehicles. Poverty is still widespread in China, but has different roots and signs than in the US, however it will severely limit people’s ability to afford digital transportation — maybe not in percent, but certainly in individuals.
How much non-consumption can autonomous mobility unlock?
Let’s go back from all the data to just anecdotal evidence, that everyone can relate to and verify. Who in your family does not have access to a car, ride hailing or bike sharing? Probably kids up to the age of 12, and a segment of the elderly from the age of 65. Those are the groups who can be converted to active users of smart mobility by their middle-aged providers.
Historically we know that the advent of the bicycle freed up women to go further on their own. So will autonomous technology have similar demographic implications?
When I raised the question of age or gender in Micromobility use at the Copenhagen summit 2018, Horace Dediu replied that there weren't any signs at the time. I wonder whether that's changed, or whether it will in the future.