CES 2016: Connectivity drives new business models in car industry

Uber's chief strategist recently spoke on BBC Radio 4 about the demise of car ownership. At this year’s CES, the car industry responded

According to Uber chief strategist David Plouffe, 15 and 16-year-olds no longer want to get a driving licence. “In my generation, your entire social life revolved around the car,” he said. “Now it revolves around smartphones.”

There has been a growing trend in the automotive industry to incorporate more and more software into new vehicles and smartphone apps are being used to steer car makers in a new direction.

Among the big announcements at the Consumer Electronics Show (CES) in Las Vegas was General Motors’ $500m investment in US car-sharing service Lyft. “We see the future of personal mobility as connected, seamless and autonomous,” said GM president Dan Ammann.

Under the partnership, Lyft and GM will work together to create a series of national rental hubs where Lyft drivers can rent vehicles short-term, rather than needing to own a car outright.

This promises to enable more people to become Lyft drivers, and GM’s decision to invest such a large sum in the three-year-old startup shows that car makers are taking the Uber threat seriously.

Through the deal, GM will gain access to Lyft’s seven million customers and the mobile app that powers the startup’s business, all for about 7% of its $7bn annual R&D budget.

Rival car maker Ford used CES to unveil 25 global mobility experiments to address growing transportation challenges. It said the insights gained from the experiments would shape its future investments.

In London, the company will run an experiment to assess the viability of on-demand use based on a fleet of Ford Focus electric vehicles and Ford EcoBoost Fiestas. Ford said car-sharing using zero- and low-emission vehicles could reduce congestion and pollution.

Working in a similar way to existing pay-per-use car clubs such as Zipcar and Citycar, the Ford experiment will see users register, receive directions to the nearest service location, reserve a vehicle and pay via a mobile app.

Ford president and CEO Mark Fields said: “We are driving innovation in every part of our business to be both a product and mobility company – and, ultimately, to change the way the world moves, just as our founder Henry Ford did 111 years ago.”

Read more about connected cars

Ford also said that its open-source software, SmartDeviceLink, is being used by the Toyota Motor Corporation. The technology enables drivers to control their smartphones apps while driving, using voice or dashboard controls.

Ford hopes SmartDeviceLink will become an industry standard. Don Butler, executive director, connected vehicles and services, said: “The true benefit of a common smartphone app communications interface is that it creates an industry standard – enabling great experiences for customers while allowing different companies the freedom to differentiate their individual brands.

“Ford is making the software available as open source because customers throughout the industry benefit if everybody speaks one language.”

Other car makers considering the technology include PSA Peugeot Citroën, Honda, Subaru and Mazda.

Autonomous vehicles

There are cultural, political and legal battles to overcome before autonomous vehicles become widely accepted in modern society, but this has not stopped car makers from deploying semi-autonomous technology.

Every new car today is fitted with anti-lock brakes and parking assistance is regarded as a desirable add-on. But, without exception, fully autonomous vehicles are driving the industry’s research agenda.

In September 2014, Elon Musk, CEO of car company Tesla, predicted that the technology for fully autonomous cars would be available within five to six years. At the time, Musk said that “machine vision” – a computer’s ability to recognise objects quickly – was the biggest technological barrier to fully implementing the technology.

Two years on and graphics card maker Nvidia has made strides to tackle safety-critical computer vision. At CES, it unveiled its DRIVE PX 2 platform, an in-car artificial intelligence system.

Designed for self-driving cars, the PX 2 uses Nvidia’s graphics processing units to process deep learning for 360-degree situational awareness around the car – enabling the vehicle to determine precisely where it is and to compute a safe and comfortable route for its passengers.

Volvo is the first car manufacturer to sign up for the Nvidia technology. It said it would deploy the PX 2 deep learning-based computing engine to power a fleet of 100 Volvo XC90 vehicles in its Drive Me autonomous-car pilot programme. The cars will operate autonomously on roads around Gothenburg, the car maker’s home town.

If Musk’s predictions are proved correct, even if the technological hurdles are overcome, it could take several more years for autonomous vehicles to navigate the legal and societal slalom before they become mainstream.

In the meantime, car makers will continue to evolve connectivity within vehicles. Last month, for instance, Volvo introduced In-Car Delivery, which involves connection to an e-business ecosystem where Volvo car owners can have parcels delivered direct to the boot of their car.

The software industry is also looking at connected car opportunities. At CES, Microsoft announced a collaboration with Harman to develop connectivity between Office and in-car electronics. The pair will work to develop access to relevant Office 365 services through intelligent personal assistant software, enabling drivers to complete tasks without compromising safety.

Microsoft said the integration will include scheduling meetings, hearing and responding to emails, automatically joining conference calls without having to manually input phone number and passcode, and seamlessly managing events and tasks throughout the day.

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