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Google’s New-Age Tech Set to Shock Auto Market

Picture the scene…

You’re about to go out for a night on the town with some friends. And once the drinks start flowing, you know things might get a little dicey on the drive home.

So rather than drive yourself, you summon an Uber or (heaven forbid) a regular taxi to take you there.

What happens next may well be one of the most bizarre and unnerving things you’ll see… and is set to put thousands of people in New York City and elsewhere out of work…

Your Very Own Knight Rider

When you step outside, your car rolls up as usual… but with one major, glaring difference.

There’s no driver behind the wheel!

Welcome to “space age” taxis.

Of the many fast-growing technology trends at the moment, it’s no secret that the driverless car trend is one of the biggest. Just this week, for example, Britain announced that it’s trialing driverless cars on real roads in four towns around the country. And the U.K. government is pouring £19 million ($29 million) into driverless car technology.

In the United States, virtually all the major automakers are working on some form of autonomous car. Last month, for example, Audi’s next-generation A7 traveled from San Francisco to the Consumer Electronics Show in Las Vegas… without a driver!

Volvo (VOLVY), BMW, Toyota (TM), and Mercedes are all innovating here, too, in hopes of making the next big advance in auto efficiency and safety.

But one of the first movers into this area isn’t actually a car company at all.

It’s Google (GOOGL).

Like all great innovators, Google doesn’t sit idle for long. And it’s no secret that the tech giant has worked on driverless car technology for several years now.

Indeed, its self-driving cars have traveled several hundred thousand miles without an accident, and it hopes to have completely autonomous vehicles ready for use in five to 10 years.

That includes a disruptive shakeup of one of the biggest commercial auto markets – taxicabs…

Google’s Next Disruption

It’s telling that the largest investment Google’s venture arm has made isn’t in internet technology, but in Uber – the upstart car service company that’s taking the world by storm.

As you probably know, Uber has already disrupted the traditional taxicab market and sent many incumbent taxicab companies and regulators into a fit of rage.

But Google wants to shock the market again by making the obvious connection between driverless cars and Uber…

That is, driverless cabs.

In fact, Bloomberg claims that Google is so far along on the ride-sharing portion of this combination that its employees are using a test version of it around San Francisco. Uber is even considering whether to ask Google to resign from the board because of the pending conflict of interest.

So what would the combination of driverless cars and taxicabs mean?

Goodbye, Cabbies

If traditional cab drivers are already upset about Uber taking their business, they’re going to be apoplectic if driverless cabs become reality. The profession will become extinct!

Imagine getting in a taxicab anywhere in the world where the “driver” speaks your language… takes your currency (in the form of a direct bill to your credit card)… has no idea how to get lost… won’t rip you off by taking the “scenic route”… and won’t yell at you if you dare to roll down the window.

And as a bonus, that “driver” is safer on the roads than any human driver.

But it means so much more than that…

What a Driverless World Means for You

Without needing human drivers, taxicabs suddenly become viable in many places and circumstances where people are forced to use their own vehicles and time.

There are several compelling potential benefits here…

Benefit #1: Who Needs a Second Car, Anyway? Consider that most American families have two cars these days. For many of them, one of those vehicles is used only for commuting and a small number of predictable trips when it’s not at someone’s workplace.

But viable driverless taxicab technology could make a second car obsolete for many Americans. Instead of two cars, they’ll have one car, plus the Google App to summon a driverless cab whenever necessary. As a result, the cost of buying, maintaining, and insuring a second car will be gone.

Benefit #2: No Commute. Forget sitting behind the wheel in frustration in bumper-to-bumper commuter traffic, unable to do anything productive. Driverless cars will endure the pain for you. Companies can also organize driverless carpools for their employees, where appropriate. And if someone has to work late, he/she can just take a different driverless cab home, perhaps with fellow late workers. This ride sharing would also reduce traffic and pollution.

Benefit #3: More Independence. Far from having less independence without another car, consumers will have more with driverless cabs. The kids can go to and from school, activities, and friends’ houses without needing rides from busy parents.

Benefit #4: Shopping Made Easy. Grocery delivery suddenly becomes a piece of cake (pun intended), as customers can submit orders online to the store, and a driverless car delivers the food to your home. No human drivers necessary. Other stores could fulfill orders this way, too. And just like Enterprise, if you want to physically shop, various malls and stores could pick up their customers with their own driverless cars.

For sure, there are many issues that need to be addressed before driverless cars hit the streets. Is the technology flawless and fail-safe? What about regulatory issues? And in terms of the social angle, many parents report that ferrying their kids around gives both parties a chance to interact and share things.

However, technology marches forward relentlessly, regardless of social niceties. If it makes people’s lives easier or cheaper, it succeeds.

Google’s work in the driverless car area makes sense. After all, when you combine one of the world’s largest tech companies with a rapidly growing trend that relies on connectivity for its lifeblood, you’ve got a pretty powerful force.

To living and investing in the future,

Greg Miller

Greg Miller

, Senior Analyst

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