If you're in the process of searching for a new car right now, Antonio Seba, an energy and transportation disruption expert, says there are two things you need to know.
One: This will be the last car you'll ever purchase. And two: Lease your vehicle, he suggests, because it will be worth virtually nothing four or five years from now.
In 2017, Seba co-authored a report predicting that most Americans will not own a car by 2030. Instead, they will ride in electric, autonomous vehicles owned by fleet operators. For young children, this means they'll never operate a vehicle themselves and, for their parents, it means never having to worry about their son or daughter making a fatal mistake on the road, even taking into account the safety concerns about autonomous cars.
Seba's findings indicated that, between 2020 and 2030, the number of passenger cars in the U.S. will drop by 80 percent, with 60 percent of remaining vehicles owned by fleet operators. Ninety-five percent of all miles driven will be in those fleets of on-demand, autonomous vehicles.
A year since the report, Seba says that, if anything, the timeline for these statistics is accelerating. The transportation industry already has ride hailing and electric vehicles and is waiting on one final component to catapult a huge disruption to the way people travel: autonomous vehicles.
The day self-driving cars are approved and regulated, everything changes, Seba says.
"Essentially the disruption happens immediately," he says, predicting that it will take place in 2021, a date that many industry experts have pointed to for the introduction of regulated autonomous vehicles.
Seba predicts that fleet operators will own the self-driving cars instead of individuals. These fleet operators will lease the cars to ride sharing companies like Uber and Lyft. This will be far cheaper – a tenth of the cost – for Americans compared to owning and maintaining their own cars, Seba says, making individual car ownership far less appealing.
As ride-sharing becomes the norm, customers could subscribe to a ride-sharing service for unlimited access, similar to how people pay for entertainment today through Netflix or Hulu.
But even before autonomous vehicles and without the plummeting car costs Seba predicts, ride sharing alone has already changed many people's views of transportation. A Lyft study found that, in 2017, nearly 250,000 ride sharing passengers sold or didn't replace their personal car because of available ridesharing services. For the 80 percent of Americans who live in cities, ridesharing services have helped fill in gaps where public transportation isn't an option.
Nir Erez, co-founder of Moovit, a public transit data and analytics company, agrees that most American car owners will abandon their cars for on-demand autonomous vehicles, though he says it will take more than 12 years for this to happen.
"I agree that cars will become a commodity for transport rather than a personal possession," Erez says, explaining that people "never fully realize the benefit of their [vehicle]." In other words, he explains, they are paying a high cost for their car when it is sitting parked and unused 90 percent of the time.
Erez believes that data companies like Moovit will be the "brains and hearts" of the new transportation model. Cities, he says, will have a central operating system that manages fleets of on-demand autonomous vehicles, much like airports have an air traffic control tower.
"Those central operating systems will be fueled with data by Moovit and other data companies that know all the people movement in the city, including the exact demand and timing for transit options," he says."
According to Erez, autonomous ride sharing and public transit will complement each other. For people who would use public transportation if they lived closer to bus or train stops, autonomous vehicles could help them bridge that gap. Smart cities would consider subsidizing these rides to public transportation stops to alleviate road congestion, Erez says.
Seba, on the other hand, says public transportation systems as we know them today will not survive in most of the country. New York's Subway could endure because of the city's extremely high population density, but he says systems in most cities, even Washington, D.C., don't stand a chance. He points to the fact that many of the systems, such as New Jersey Transit, are underwater already and there's no way they will survive once cheap autonomous ride sharing is an option.
Autonomous, electric vehicles, which includes buses, will become the new public transportation, according to Seba. For those who can't afford to pay for their own rides, Seba predicts autonomous rides would be subsidized by the government. And for the 20 percent of Americans who don't live in cities, the extra cost of providing rides to people in more remote areas could also become subsidized, he says.
To those who question how quickly the transportation transformation will occur, Seba points to the evolution of the smartphone, the popularity of which soared when Apple Inc. and Google Inc. introduced their first models in 2007. As soon as the technologies converged to make a smartphone product possible, the telecommunication world changed and has evolved dramatically during the past decade.
And you know, it took a lot of people by surprise," Seba says.
The trend lines are clear: a disruption in transportation is coming soon, and major car manufacturers have made huge business decisions betting on it.
Ford, for example, announced in April that it will be phasing out most of its cars in North America. In a press release, the company said one of the ways it will create long-term value is by building a "viable and profitable autonomous technology business."
Ford is one of numerous automakers to reveal plans of launching a self-driving car fleet in the coming years.
Alphabet's driverless technology company Waymo has already made headway in the autonomous car race. Waymo has partnered with Jaguar Land Rover and Fiat Chrysler to build self-driving cars, which are already being tested on the roads in Phoenix. Fiat Chrysler and Waymo are set to make more than 60,000 vehicles, while Jaguar and Waymo said they plan to build up to 20,000 vehicles in the first two years of production.
All of these investments indicate that "this market is going to happen, and it's going to happen now," Seba says. "These are very strong signals that we're on the cusp of all of this happening."