Last week I briefly wrote about how absurd I find the idea that a forward-thinking company like Apple needs to dive into a stale industry such as automotive. But all week I’ve been thinking about how I didn’t go far enough. Apple, and really all the big tech companies, are actually killing the very need for the automobile in the first place.
All major technological breakthroughs are accompanied by a slate of winners and losers. The invention of the automobile wreaked havoc on the passenger train industry. The invention of the Combine Harvester caused a widespread reduction in farm labor employment. And on it goes.
My days working at NASA colored how I see the future of tech. Many within NASA consider their highest calling to be transporting exploration data. NASA believes this so much that they’ve transitioned their most precious resources (people) towards projects that move data like telescopes, satellites and robotic probes. They’ve outsourced the grunt work of actually transporting these objects to private companies.
As I mentioned last week, the great Coronavirus-lockdown of 2020 has shown the world the importance of working remote and connecting with people digitally. But I gave short shrift to the aspect of who the winners and losers are going to be. One of those losers is going to be the automotive industry.
I don’t mean for this to sound bad, but driving around town during the lockdown has been gloriously wonderful. I’m basically just going to the grocery or hardware store but I’ve been amazed at how easy it has been to navigate some of the former traffic hot spots. There are no traffic jams and it’s full speed everywhere. I love it.
So where are all the cars on the road? Well, for starters, no one is taking their kids to school between 7-8pm or picking them up between 2-4pm. That alone makes a huge difference. Then you have all the office workers who are working from home. And sadly, all those who have been unemployed.
But what if the new digital economy created new jobs that could be done online? What if corporations started letting people work from home? What if schools seriously considered expanding online classrooms? Could work-from-home parents supervise school-from-home kids? There would be a whole host of positives from these trends.
Everyone wants cars to get higher gas mileage. But what’s better than that? What if people simply didn’t drive as much? The car with the smallest carbon footprint is the one that stays in the garage all day. Our national gasoline usage would go way down and so would traffic congestion. And so would deaths.
One of the benefits of working at the Batesville Casket Company is that I’ve become acquainted with trends that impact the death rate. One of the major factors in how many people die is the unemployment rate. And it’s not what you’d expect. As the unemployment rate goes up, deaths go down. Why? Because there are less people commuting to work every day. For young healthy people, traffic accidents is a major cause of death. Also, unemployed people tend to start exercising more and eating out less which is a net positive.
But could we get these social positives simply by migrating people to a more home-based work world? People would drive less miles without the daily commute and perhaps more time to work out?
If the world moves in the direction of a greatly enhanced remote work lifestyle, there will be winners and losers. The winners will be the big tech companies who are providing the software and equipment that makes it all possible. But no one is talking about who the losers would be. The automotive industry would be one of the major losers.
I’ve been working from home since mid-March. Before that my job was work-from-home two days a week anyway. Even before the lockdown, I was starting to wonder whether the money I sink into my get-to-work car was justified for only 3 days a week usage. But what if my company moves me to work from home three days a week or more? At that point I start to wonder if I even need it or if I should downgrade to something less expensive.
How many other people would go through a similar thought process if work-from-home increases in the future? There are many households where a couple each has their own vehicle. If each of them was working from home, why not share one vehicle? For those occasions where both of them might need to go in separate directions, why not use a ride-sharing service? Even if households downgrade to cheaper models, that spells trouble for automakers who traditionally make less money at that end.
The internet is making it easier to connect with your co-workers and clients. The imminent wave of augmented and virtual reality is going to usher in entertainment which will be unmatched by any theatre or business. This means that people will be driving less. Less miles driven equals less cars sold.
Sure there will always be a need to drive places. But a reduction in the overall automotive units sold will mean a lot of change in the industry. It will be harder for the smaller companies to stay in business. Smaller companies like Tesla would be gone for sure and others in the middle like Mazda or Suburu perhaps as well.
Automotive consolidation is a sure bet. An exception to this might be mass transit vehicles. If dual-car households consolidate to one vehicle or young people decide they don’t even need to purchase their own car. There could be a potential upswing in ride-sharing or mass transit to fill that gap.
So I wouldn’t hold my breath for any of the big tech companies to dive into manufacturing automobiles. Especially since they are actively working to kill the whole need for an automobile in the first place. Asking when Apple is going to build a car is like asking when Tesla is going to jump into Texas fracking.
My days working at NASA colored how I see the future of tech. Many within NASA consider their highest calling to be transporting exploration data. NASA believes this so much that they’ve transitioned their most precious resources (people) towards projects that move data like telescopes, satellites and robotic probes. They’ve outsourced the grunt work of actually transporting these objects to private companies.
As I mentioned last week, the great Coronavirus-lockdown of 2020 has shown the world the importance of working remote and connecting with people digitally. But I gave short shrift to the aspect of who the winners and losers are going to be. One of those losers is going to be the automotive industry.
I don’t mean for this to sound bad, but driving around town during the lockdown has been gloriously wonderful. I’m basically just going to the grocery or hardware store but I’ve been amazed at how easy it has been to navigate some of the former traffic hot spots. There are no traffic jams and it’s full speed everywhere. I love it.
So where are all the cars on the road? Well, for starters, no one is taking their kids to school between 7-8pm or picking them up between 2-4pm. That alone makes a huge difference. Then you have all the office workers who are working from home. And sadly, all those who have been unemployed.
But what if the new digital economy created new jobs that could be done online? What if corporations started letting people work from home? What if schools seriously considered expanding online classrooms? Could work-from-home parents supervise school-from-home kids? There would be a whole host of positives from these trends.
Everyone wants cars to get higher gas mileage. But what’s better than that? What if people simply didn’t drive as much? The car with the smallest carbon footprint is the one that stays in the garage all day. Our national gasoline usage would go way down and so would traffic congestion. And so would deaths.
One of the benefits of working at the Batesville Casket Company is that I’ve become acquainted with trends that impact the death rate. One of the major factors in how many people die is the unemployment rate. And it’s not what you’d expect. As the unemployment rate goes up, deaths go down. Why? Because there are less people commuting to work every day. For young healthy people, traffic accidents is a major cause of death. Also, unemployed people tend to start exercising more and eating out less which is a net positive.
But could we get these social positives simply by migrating people to a more home-based work world? People would drive less miles without the daily commute and perhaps more time to work out?
If the world moves in the direction of a greatly enhanced remote work lifestyle, there will be winners and losers. The winners will be the big tech companies who are providing the software and equipment that makes it all possible. But no one is talking about who the losers would be. The automotive industry would be one of the major losers.
I’ve been working from home since mid-March. Before that my job was work-from-home two days a week anyway. Even before the lockdown, I was starting to wonder whether the money I sink into my get-to-work car was justified for only 3 days a week usage. But what if my company moves me to work from home three days a week or more? At that point I start to wonder if I even need it or if I should downgrade to something less expensive.
How many other people would go through a similar thought process if work-from-home increases in the future? There are many households where a couple each has their own vehicle. If each of them was working from home, why not share one vehicle? For those occasions where both of them might need to go in separate directions, why not use a ride-sharing service? Even if households downgrade to cheaper models, that spells trouble for automakers who traditionally make less money at that end.
The internet is making it easier to connect with your co-workers and clients. The imminent wave of augmented and virtual reality is going to usher in entertainment which will be unmatched by any theatre or business. This means that people will be driving less. Less miles driven equals less cars sold.
Sure there will always be a need to drive places. But a reduction in the overall automotive units sold will mean a lot of change in the industry. It will be harder for the smaller companies to stay in business. Smaller companies like Tesla would be gone for sure and others in the middle like Mazda or Suburu perhaps as well.
Automotive consolidation is a sure bet. An exception to this might be mass transit vehicles. If dual-car households consolidate to one vehicle or young people decide they don’t even need to purchase their own car. There could be a potential upswing in ride-sharing or mass transit to fill that gap.
So I wouldn’t hold my breath for any of the big tech companies to dive into manufacturing automobiles. Especially since they are actively working to kill the whole need for an automobile in the first place. Asking when Apple is going to build a car is like asking when Tesla is going to jump into Texas fracking.
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