Wednesday, June 7, 2017

Autonomous Vehicles Might be the Big Opportunity for Mobile Service Providers

 It might be easy to understand what “big data” might mean for mobile operators supporting autonomous vehicles: lots of sensors and processors, communicating status in real time, at the edge of the network, in volumes of perhaps a gigabyte of data per second.

It is harder to understand the eventual implications of ride-sharing services such as Uber that could be part of a larger trend that changes the economics of personal auto ownership. It is not so clear how a change in personal vehicle ownership, in favor of ride sharing, works out.

But it might be reasonable to assume that it is autonomous vehicles, more than ride-sharing, that has positive implications for mobile service providers. That is at least partly because more-efficient ride-sharing actually could reduce auto ownership, and the mobile communications required for those vehicles.

By perhaps 2030, it could cost less for a typical consumer to use a ride-sharing service than to own an auto, argues Morgan Stanley equity analyst Adam Jonas.

Today, ride sharing accounts for perhaps six percent of global miles traveled, but could reach as high 26 percent by 20130, Jonas estimates.

But there are other trends poised to change the economics of the auto business. A shift to autonomous vehicles is among the bigger trends. "Vehicle sharing can only take your vehicle utilization to about 50 percent to 60 percent of its full potential, in our view," says Jonas. "And as long as these vehicles are human-driven, logistical inefficiencies will persist.”

“Autonomous vehicles on the other hand remove the human bottleneck and the economics change substantially,” he argues. And, arguably, represent a huge app case for use of 5G, low-latency mobile communications.


One illustration of benefits is to consider the impact of taxi trips taken in New York City from ride-sharing alone: as much as 70 percent of all such trips can use ride-sharing, eliminating much traffic congestion, reducing fuel costs and reducing pollution, some believe.   



Today, a typical consumer likely incurs lower costs than relying solely on shared-ride services for transportation. In other words, the present economics are a bit like renting a hotel room versus owning a house.

But those per-mile operating costs should flip by 2030, when use of autonomous and shared vehicles by many consumers will actually be lower than owning and driving their own vehicles.


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