Autonomous vehicles and driverless cars among topics at Best In Fleet event
From the December 2016 print edition
Autonomous vehicles, electric cars, ride sharing and other automotive trends are changing the way North Americans view cars and mobility. No doubt, these developments are also shaping how fleets operate. To discuss these trends, two representatives from global management consulting group McKinsey and Company spoke to assembled guests during a Best In Fleet event organized by ARI Global Fleet Management Services in Florida in November. Joe Moser, associate principal, and Inga Maurer, partner, shared insights into what recent automotive trends might mean for the fleet world. The pair touched on opportunities that might arise, driverless fleets, working with insurance companies, sharing vehicles across fleets and more.
Maurer discussed several trends beginning with connectivity, which will provide several advantages, she said. For example, fleet drivers will be able to get data from a vehicle so that they pull a vehicle off the road to do preventive maintenance before a breakdown. Connectivity also allows for more efficient route planning, Maurer noted, citing UberPOOL’s ability to merge the routes of two customers, thereby splitting the cost in the process.
Another mega-trend was changes to the popular view of vehicles and mobility. Historically, people have owned one car for a single purpose, she said. These days, people look at options that allow them to use different vehicles for leisure, commuting and other functions.
Autonomous vehicle advances hinge around not only what level of assisted driving the consumer wants, but also what regulations will allow and what technology can provide. While car companies can produce high-level AVs, the challenge remains getting those vehicles to operate within a changing ecosystem.
Electric vehicles, another major trend, have existed for decades, Maurer noted. The push is growing in some places for more electric powertrains, but the infrastructure to support those vehicles needs to be in place. “Whether we talk to OEMs or suppliers, they all believe we’re actually at the verge of disruption,” Maurer said.
The timeline for such disruption is speeding up, she said, with organizations looking for strategies over the next three or four years rather than decades. Why are these changes occurring so quickly now? For starters, electronic vehicles enjoy a more favourable reputation among the latest generation of consumers, Maurer noted. Costs have also fallen, making them a more compelling option. Lastly, there are more charging stations than ever.
The connectivity push is helped by the fact that people rely on mobile devices, Maurer said. Rising safety standards also play a part, as many recently developed safety features need connectivity to work.
But all this doesn’t mean a switch to connected, autonomous EVs will happen overnight, said McKinsey and Company principal Joe Moser. Changes will most likely come through first on premium cars and some commercial fleet vehicles, Moser noted. “It’s not going to be a boom, and all of a sudden there’s going to be a bunch of robot cars driving around on the road,” he said. “We think it will implement slowly.”
Electric vehicles remain the key disruptive trend in the industry over the next 10 to 15 years, Moser said. Regulation is the driver, with C02 emissions targets pushing many automotive manufacturers to start thinking about EVs a while ago.
Commercial fleet impacts of autonomous vehicles depend on several factors, Moser said. Does the fleet haul freight or passengers? Must the driver be there or is the focus on point-to-point delivery? AVs offer several potential advantages to fleets, like potentially lower fuel consumption, lower insurance, fewer driver-related accidents and a parking need. Companies should look at total cost of ownership. “There’s going to be significant change in fleets,” Moser said. “It’s more of a question of how quickly do you role in some of these new technologies and how do you calculate the total cost of ownership or the impact you get for your business.”