McKinsey report on disruptive technologies fails to see full implications of driverless cars

It seems to be hard for some auto-industry insiders (including their consultants) to grasp the true nature of the coming changes in mobility. Strategy consultants McKinsey’s Global Institute just published a report on disruptive technologies which correctly envisions significant reductions in accidents and fuel consumption caused by autonomous car technology but the authors don’t really consider the fundamental change in personal mobility – switching from car ownership towards using driverless car sharing – which will be caused by driverless cars!

Driverless cars have the potential of slashing the total number of cars by a factor of 5 to 10 (see the recent Earth Institute study) and therefore will completely and thereby fundamentally transform the auto industry. McKinsey should have given much more thought to this potential disruption as this needs to be factored into the decisions of their automotive industry clients even today (they do have a one-liner mentioning that driverless cars could increase car-sharing but they fail to see the implications). This transformation will occur naturally because of the enormous cost advantages of driverless car sharing over traditional car ownership.

Nevertheless the McKinsey report gets it right when they point out that there are significant first-mover advantages in autonomous mobility and they also have interesting thoughts about the impact on trucking (50% autonomous driving possible by 2025).

The authors may have been involved with intelligent transport systems because they propose that countries should invest in sensors to be embedded in the roads to ‘provide precise positioning information and unambiguous information about speed limits’. This approach is not up-to-date any more. A more adequate and much less expensive delivery mechanism for such information would be the mobile internet: cars could eventually be required to download official maps with such information via the mobile internet.