01/05/19
Brice Bunner
Finance

Waymo’s next product reveals the urbanization of innovation

    

Image ©: sfcurbedAs dozens of manufacturers from Tesla to Amazon are working on driverless cars, the pursuit can come across as a fad, like MP3 players did a few years ago (Zune, anyone?). But what Waymo did by launching their driverless cars before the end of 2018 is actually putting efficiency before everything else.

Progress isn’t a straight line

Waymo’s decision to move forward with these vehicles isn’t following a fad. It’s actually following the goal of efficiency. A business model that aims to bring more efficiency to the lives of their consumers. But what Waymo and these other autonomous vehicle companies aren’t necessarily taking into account is that “progress” toward an efficient future is anything but linear.

Automation may seem like a good way to take human error and accident out of the equation, but it isn’t the end-all answer to our manufacturing and lifestyle woes. There are times that humans are simply better equipped at a task than robots. If manual labor can be more efficient at doing a task, the more economic thing would be to shirk common wisdom and actually remove automation from that process.  

But demand does dictate supply in these instances. If the consumer wants more automation, the economic thing would be to create autonomous vehicles. And, when it comes to this business in particular, autonomous vehicles will overtake the current commercial automotive industry simply because it’s more efficient, not because it’s a fad.

What automation really gives us

At its core, automation is efficiency. Though extremely costly, and anything but simple, the output of automation is to generate more consistency in less time than manual labor would. Whether it’s punching pieces out of sheet metal or commuting citizens, automation seeks to make processes more efficient by simplifying the human’s involvement.

But, when you look at the whole of the American economy, the simplification of transportation isn’t efficiency, it’s actually bifurcation. Moving automation to the private sector essentially outsources all the individualized elements of transportation and turns it into a service. We’ve seen this shift with other things like software as a service, or even print-on-demand. It’s a variable expense that allows the user to pay when needed, rather than to purchase an expensive product or device to perform that task.

Catering to the preferred consumer

The interesting point about bifurcation in this way, however, is that it only really works in the big city, or in urban settings. Rural areas get the short end of the stick when it comes to this innovation. Not only because the innovations are often less practical out in the country, but because access to those innovations is more challenging.

Price tags are higher outside the city because—as we can see with the fuel-price riots in France—rural areas are more affected by fluctuations in the market. Especially by the kind of fluctuations autonomous vehicles pose to create. Consider the cost of bringing autonomous vehicles to consumers if there is road-based infrastructure necessary to make those vehicles work. It’s easy to understand how rural roads would be the last (and most costly) to receive those upgrades.

We can already see how modern thinking prefers metropolitan areas with existing transport services like Car2Go and Lime scooters. You don’t see those start-ups clamoring for the affection of country folk. Of course, the argument is that it is a better business model to move those services to the city. But doesn’t that just prove the point? From a business perspective, innovation is better for urban consumers.

Whether by design or by accident, this bias doesn’t seem to deter autonomous vehicle companies in the slightest. Waymo is pushing their car line out and, if you live in the country, well, too bad. It seems as if the subtext of these tech companies is “move to the city to keep up with progress.”

Autonomous vehicles are destined to overtake our roadways—starting with the commercial sector. But that doesn’t mean the efficiency it hopes to bring is universal. There are whole communities that will either miss out or front more of an investment to have the innovation of autonomous vehicles for themselves. And the irony is that commuters coming from the country would perhaps benefit the most from a driverless car.

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