Twists And Turns Ahead: Autonomous Vehicles Still Face Tech And Regulatory Challenges

Even without a clear path to application, the US autonomous automotive opportunity is “so big that any slice of it is big enough to support an entire ecosystem,” according to Jay Walker, founder of Upside and Priceline.com. “There are so many points of attack, it’s no surprise the VC community is picking them off.”

At present, autonomous technology is scattered across a variety of applications and stages of sophistication, with interested parties ranging from venture capital investors, automakers, insurance providers, ride-sharing startups, and even advertisers eager to take a piece of the pie.

Where and when we might see fully autonomous vehicles on our roads, though, still remains a matter of debate for a host of technical and political reasons.

Walker spoke at the CB Insights’ Innovation Summit, joined by Mike Burgiss of Cox Automotive and Mark Norman of Fraser McCombs Capital in a conversation moderated by Heather Somerville of Reuters.

From a business model perspective, Mike Burgiss underscored the idea of a subscription model for the industry. “There’s a new bill in the home called a mobility services provider,” he posited. While it’s not clear if this would be offered by a company like Ford or Uber, “consumers are going to have another subscription, the same as cable.”

Before autonomy is common enough to warrant a mobility services subscription business model, though, we’ll most likely first see autonomy in narrow use cases or “micro-applications: at the valet, or on the highway,” according to Mark Norman.

Walker argued however that the high capital expenditure costs associated with autonomous technologies likely wouldn’t allow for a bottom up consumer-facing model anytime soon. Likely, autonomous vehicles will first proliferate “through commercial applications like trucking,” where the assets are being used frequently, he said.

Business use-case aside, Norman noted that major hurdles confront automation. At the forefront of these is urban transport, especially in the first and last mile, where population density and environmental hazards increase.

Burgiss added that a larger factor will be the hodgepodge mix of technology that will exist on the road in intermediate phases. “We’re on a journey from cruise control, incrementally up to autopilot,” where cars will share the same space, with and without autonomous technology. “It’s a systems changeover,” Walker remarked. “If it’s not 100% changeover, all of your legacy issues muck up the current system.”

For autonomy to work Burgiss argued, cooperation has to exist “between roads, networks and cars,” both technologically, with mapping, telematics and networked vehicles, but also legislatively. If “the FCC, DOT and NHTSA agree on a set of standards,” Burgiss said, it would help support companies and investors that are looking at how the whole ecosystem can work together.

Walked noted that if regulations don’t come from US agencies they will end up being created elsewhere and then imported over. “Without political leadership you’ll export it to foreign jurisdictions. It’ll get tested in Europe, [or] in Asia and that’s where the innovations will get road tested, no pun intended, and then migrated here.”

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