With autonomous driving likely becoming a reality in the not-so-distant future and the growing popularity of smart mobility services and alternative fuels, global innovators are pushing governments and the automotive sector to get on board with a rapidly changing environment.
“Most industries miss the biggest threat that is about to hit them,” Shai Agassi, founder of the former electric vehicle pioneer Better Place, said at a Tel Aviv conference on Thursday.
“The car industry is being hit by this device,” Agassi told participants in the 2016 Fuel Choices Summit. Disruptive technologies like the smartphone, as well as improved cameras, mobile applications and new fuel alternatives are driving the transformation of the global transportation sector, according to industry experts.
Such technologies, such as advanced camera systems, will enable autonomous driving for car-sharing applications like Uber, Agassi posited. While Uber has not replaced public transportation and traditional travel, these shared rides are already providing a substitute for private car use in New York and London, he explained.
Nahshon Davidai, chief marketing officer at the on-demand taxi app Gett, said he feels that the global population is already heading toward a path of dramatic reductions in fuel use.
The factors likely to contribute to this, include improved vehicle utilization, a shift from calculating miles per vehicle to miles per seat and a great adoption of electric vehicles.
“The revolution has already started,” he said.
With autonomous vehicles expected to be ready for production by 2020, up to half the cars sold in 2030 will be at least partially autonomous, Davidai explained, citing data from McKinsey & Company. “The question that we pose here is how low can we go?” Davidai asked.
Agassi took a look at typical taxi operations in New York, where he said that an average cab performs about 100 rides daily, equivalent to about 150,000 rides in a vehicle lifetime of five years. If the integration of autonomous technology would bring taxi expenses up to about $40,000, the average cost of each ride would be about 25 cents – 25 cents that can be taxed by the government, he continued.
“When the government can tax it, it happens,” Agassi said.
“When they can tax it and make it cheaper than a bus and cheaper than a subway, it will happen [quickly].”
Meanwhile, because 93% of all car accidents happen as a result of people, removing people from the equation of driving could be an increasingly attractive option, despite the technological mishaps that might occur, Agassi explained. Once the point comes when the hardware and software in the car is better than the average driver, insurance companies will begin insuring the algorithms running the car, he said.
“When that happens, there’s no stopping of the shift,” he added.
As the technology moves forward, Agassi pondered what the role of governments should be in the changing system.
“The government needs to take a first, high-level question: do we want to run ahead or behind this curve, a massive question,” he said. “Some countries decided to move ahead of the curve.”
While Israel is the home to innovations like anti-collision technology Mobileye, the United States and United Kingdom are already enabling autonomous cars to perform trials and build knowledge and data around real experiences, Agassi continued.
“Israel should be ahead of the curve, it is not,” he said.
National Infrastructure, Energy and Water Minister Yuval Steinitz stressed that the government’s vision is that by the end of the decade, most of the transportation sector will be based on alternative fuels.
Most of these alternative fuels, the minister explained, will originate from natural gas, which exists in abundance off Israel’s shores. Such fuels include compressed natural gas and methanol, as well as the electricity necessary to power electric vehicles, generated in gas power plants, according to Steinitz. In addition, hydrogen will likely also be derived from gas to power hydrogen cars, he said.
“In the next decade, at least in the Israeli case, hopefully [alternative fuels] are going to play a much more important and key role in our transportation system,” the minister added.
Although gasoline prices may currently be low, Steinitz stressed the importance of continuing to develop and integrate alternative fuels.
“Many people think that this is not the time. But this is wrong. We have to continue to work on alternative fuels,” he said. “Even in times when fuel costs are being reduced, we have to bear in mind that the real cost for the country, the society, for all the people – if you include all the pollution – is still much higher.”