The future of fleets [and a personal update]
Autonomous vehicles have been looming large in our collective imagination, and for good reason. At a technology level, robots are sexy and cool. We feel small moments of joy when a car parks itself, or the first time we use adaptive cruise control, so full autonomy just seems like the Jetson future we deserve. On a personal level, getting any of our commuting time back is attractive. At a system level, we recognize that the 2 hours a day (that’s less than 10% utilization) an average car is used is neither personally efficient or sustainable as cities continue to grow.
This brings us to a new movement that I’m proud to be a part of => autonomous fleets of on-demand cars providing immediate transportation whenever and wherever. This future state represents not only a major shift in usage patterns but a major shift in ownership patterns. This represents significant opportunities and threats that cascade well beyond the vehicle itself to insurance, parking and even advertising. And so many are rushing to the gap. Tesla is pushing the boundaries for what can be achieved at a commercial scale and deploying lower level autonomy commercially. Waymo has driven well over 2M autonomous miles. The traditional car manufacturers, well-positioned to overcome the mass production, cost and regulatory challenges needed to launch at scale, are running pilots and most have announcements for when they expect to see Level 4 autonomy. Ride-share companies are all also engaged, as autonomous vehicles promise to bring the cost per mile of a ridesharing ride to an economically viable number.
While some early stage companies like Tesla have taken a typical vertically integrated approach, most of the attention and capital focuses on the front end of the value chain (rider aggregation, machine vision, autonomous brains and vehicle platforms). But as we experience a radical shift from pay-to-own to pay-to-use, we start to find the hidden cost in vehicle ownership. Today my family manages two cars. We bought one and leased the other. Either way, I had to go to the DMV to register both. I bring them for service once a year or whenever the little yellow light tells me to. I also try to clean them as often as I can.
Fast forward 5–10 years and I won’t own or manage any cars. The really smart autonomous vehicle of the future will come to transport me. It can drive itself. But how does it recharge? Where can it idle? Where does it get maintained? How does it get cleaned? Beyond the day to day, who owns it? How does it register or get licensed for a state or country? Who finances it? This is the other side of the autonomous vehicle value chain. I am extremely excited to share that I have joined the Avis Budget Group as VP of Fleet Ventures to help meet this crucial need and define the future of fleets and fleet services.
Avis Budget Group has hyperlocal presence at a global scale and is moving rapidly to embrace the evolving market trends of electrification, connectivity, a shift from pay-to-own to pay-to-use, and eventually autonomy. I believe they are strongly positioned to redefine the future fleet:
- This year Avis Budget Group managed almost 1M vehicles worldwide. These vehicles were maintained cleaned and available at the right place at the right time.
- Avis Budget Group bought and registered hundreds of thousands of vehicles, and profitably disposed of vehicles.
- The Company’s car-sharing brand, Zipcar, has more than one million members.
- In June, Avis Budget Group announced a partnership to manage Waymo’s fleet in Phoenix.
- Avis Budget Group is the first mobility company to fully connect their fleet of 5,000 vehicles across a major metro area, creating a Mobility Lab in greater Kansas City, MO.
Avis Budget Group Fleet Ventures was created to create new businesses to deploy and support future fleets. As head of Fleet Ventures my first priority is connecting with other teams that are looking to reimagine the future. What are your thoughts? I would love to continue the conversation. Leave a comment or tweet me @oz00