To paraphrase the champion boxer Mike Tyson, everyone thinks its clichéd until it hits you in the face.
Yes, technology is a game changer, yes, we’ve heard it many times, but it will hit us in the face (in a good way), sooner than we think.
All thanks to China…and the most visible impact will be China’s rapid implementation of autonomous transport and robotic technology due to:
· A sharp drop in its labour force. (Today’s 19 and 20-year-olds are almost 50% fewer in number than 19 and 20-year-olds in China ten years ago, based on the 1990 and 2000 census)
· A significant percentage of the nation’s drivers have limited experience (based on strong annual vehicle sales over the past decade -although slowing the past year), leading to poor driver behaviour accentuated by congestion and FOMO to get ahead (literally and in life/business –see my article China’s modern psyche)
· A desperate desire for new energy vehicles (EVs, hydrogen fuel cells) to reduce its geopolitical reliance on global oil and car pollution
· Need for better productivity to offset declining economic growth, and to improve quality of life
· Access to big data, relatively fewer consumer privacy issues to enable faster artificial intelligence and robot implementation
Thus we can expect rapid take-up of
· robot delivery vehicles (wheeled and drone)
· heavy-lift drones and harvesters (especially in premium agricultural produce, reducing the need for rural roads)
· driverless cars and trucks
· even robot overnight pavement sweepers to reduce visual pollution
Impact on Australia, especially on the property market (and airline industry)
With China in the driver’s seat (pun intended) on autonomous vehicles, the nation will offer useful case studies on how transport technology will impact society.
I expect a three-sector driverless car (DC) market to develop in three phases as safety, technology improvements and consumer acceptance increases
Phase 1: Localised micro-DCs to neighbourhood schools, shops and mass-rapid stations, run by transport firms – The fastest way for high impact introduction of this technology
Phase 2: Regular DCs for city driving, as individually owned DCs or as DCs run by transport firms
Phase 3: Inter-city and regional driving’
And when DCs are 99% of all cars on the road (eg sports-car drivers will pay hefty insurance premiums due to the increased risk they present to DCs), then almost everything changes, such as;
Property market impacts
1. existing home garages are re-purposed, new houses/apartment blocks have fewer garages/parking bays
2. homes don’t have to be ‘walk to station’ to have a price premium
3. low/mid/high rise apartments can be built further away from train stations
4. existing commercial, retail and industrial buildings can repurpose car-parks into space with higher rents
5. regional towns become commuter towns as passengers can work or rest instead of drive
6. more pleasant streetscape without kerb-parked cars, especially in tourist areas. Council parking bays can be landscaped or repurposed
7. quieter roads providing revaluations for properties close to busy roads
8. DCs can be parked with a far smaller parking footprint, including parked on two-levels in an existing warehouse floor
Quality of life impact
9. faster and safer traffic flow as DCs removes human latency (and stupidity)
10. overnight-freight driverless trucks eases congestion
11. overseas and interstate tourists can roam freely in DCs rather than be restricted to tour-busses or hire cars
12. booming regional tourism as DCs take away the hassle and danger of driving long distances (with anti-kangaroo collision features)
13. no need to own a first or second vehicle, which for most people is the 2nd most expensive purchase made, after their home
14. negative impact on truck, taxi, bus, tourist-coach and ride-share drivers, and car manufacturers/sellers, and intercity airport routes
But there are possible black swans and grey rhino impacts with DCs. And some property values will fall instead of rise.
I hope to see you at my seminar on 28th Oct, with thanks to Deloitte.