A taxi to the future of technology

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October 16, 2017

Futurists often talk about disruption as a zero-sum game. Innovative technology creates new market leaders and kills off the slow-moving dinosaurs. Market forces often split changing industries into future leaders and fading has beens.

Traveling through Europe for the EMO Hannover 2017 show in Germany in late September, I got a first-hand look at the limitations of that theory. A lot of innovation was on display in the exhibition halls, but one example of thriving during market disruption came from taxis.

Like many European cities, Hannover has banned Uber and other ride-sharing apps. Critics call these actions protectionist – limitations on the free market meant to prop up the old-fashioned taxicab industry. However, the cab companies aren’t simply taking advantage of protected markets.

Searching for directions to a store on Google Maps, the map app asked if I wanted to use mytaxi (putting that app suggestion in the same spot that I’ve seen Uber suggestions in Chicago).

Download the app, and you’ll see the bulk of Uber’s functionality – a map view of cabs in the area, the ability to enter a destination and see trip pricing in advance, photos of the driver, and a list of amenities in the cab. Once inside the cabs, the innovation continued as several offered WiFi, phone charging, and other services.

With mytaxi, the default hailing app in many European cities, taxi operators have some of what consumers love about ride-sharing apps, combined with the licensing and tax structure that cities and companies developed for more than a century.

Between higher fuel economy mandates, autonomous vehicle development, and demands in several countries to offer all-electric drive (see Regulations p. 11), the automotive industry is being disrupted. Some predictions call for a future dominated by new players – Google, Apple, and Tesla to name a few – with old-line plays such as Toyota and General Motors left behind.

A more likely scenario, however, is adaptation.

Tesla has shown the value in software-based upgrades to its vehicles. When Hurricane Irma was heading toward Florida, Tesla extended the range of some vehicles with a software flash – turning on unused portions of batteries. Several Tier 1 suppliers offer telematics systems with push-update capabilities, so expect to see growing use of over-the-air software capabilities in all vehicles within the next few years.

Autonomous developments will likely be similar. Legal and technical issues will keep fully self-driving cars from being common in the immediate future, but the equipment needed to make it happen – computer controlled steering and braking, sensor suites to monitor road conditions – are available now. Automakers could install much of the hardware in cars on sale this year and next, and enable the fully autonomous functions when the software is proven.

Look at the research and development (R&D) spending from the top vehicle producers – no one is ignoring the challenges and opportunities coming from autonomy and electric drive. The incumbent market leaders may not be the first to market with every innovation, but they can adapt to a changing world.