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Going Driverless

Published on October 3, 2016 by Prabaldeep Paul

Automotive companies are betting their future on driverless vehicles – the new frontier. The recent past has seen considerable activity in the passenger car segment, with almost all major players investing, developing technologies, or partnering with companies that can provide driverless technology. Most players have set 2020 as their target to introduce some version of a driverless car. A pioneer like Tesla is aiming for 2018. Even Uber is currently running a pilot program in Pittsburgh, where select users can request a self-driving car.

While the push for driverless cars is on a fast track, there is a good possibility that consumers may see driverless trucks (and delivery vehicles) being adopted before driverless cars.

Firstly, it is becoming increasing clear that building autonomous driving technology for highway driving is much easier than the technology needed for city maneuvering. An autonomous system has to deal with many more variables in congested city driving conditions than on a highway. Also, the adoption of driverless technology among consumers (passenger cars) may be slow because of personal preferences and as compliance frameworks need to be in place.

Secondly, the economics of autonomous technology lends itself much more suitably for driverless trucks than driverless cars. Ecommerce’s effect on the delivery industry is already visible. As it becomes more pervasive, demand for efficient delivery vehicles will increase, which are apt for this form of autonomous technology. The cost of adopting autonomous driving technology is also spread much more favorably for a truck, which has a larger base cost, than a car.

This is the reason Uber recently purchased Otto, a self-driving truck startup. Daimler is also working to launch its driverless truck by 2020. Amazon, which has invested heavily in logistics in the recent past, may also be developing its future delivery operations around self-driving trucks and drones.

If things progress in this pace, we may see the transportation and logistics industries change dramatically in the future, with autonomous trucks providing the long haul point-to-point services and smaller autonomous delivery vehicles solving the last-mile problem.

Acuity Knowledge Partners has been assisting logistics firms with technology-tracking and assessment services to help navigate through this fast-changing landscape of converging logistics and technology. We have helped clients identify new technologies and are assisting them in partnering with prospects to secure their future in an ever-changing technology-driven world.

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About the Author

Prabaldeep Paul leads the Strategy Research and Consulting practice at Acuity Knowledge Partners. He has over 11 years of experience working on assignments related to growth strategy formulation, go-to-market strategy, market entry and expansion (buy/build options), benchmarking, business transformation, process improvement and related areas.

He works closely with management, strategy, corporate development, competitive intelligence, innovation, procurement, and client teams across multiple industries, with focus on logistics and procurement, CPG and retail, hi-tech and digital services, private equity, and industrial goods.

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