Why the death of the private car is just around the corner

Tony Seba is a disruptive influence. Or at least that the message he has for the world.

He predicts that in 12 years the age of the private car will be over. That we will all be driven in fleets of corporate owned driver-less vehicles summoned in minutes. And that it will cost us just a tenth of what it does today.

It is an ambitious prediction. But Mr Seba, an academic from Stanford University in California and self-described serial Silicon Valley entrepreneur, has no doubt he is correct. What is coming, he says, is a confluence of technologies in the transport sector that will dramatically push down the price of what we pay to drive around.

“Essentially when you get a similar product of service that is priced ten times cheaper you’ve had a disruption," he explains. "Every time; since 1454." (The year that saw the invention of the printing press.)

Disruptions are what Mr Seba calls sudden and dramatic changes in the way we live as a result of new technologies coming at the same time.

In his talks, which include one in Abu Dhabi last week at the World Future Energy Summit, he makes much of the arrival of the motor car and the internal combustion engine.

On the streets of New York in 1900, all traffic was pulled by horses. Within 15 years, four wheels had almost completely replaced four legs.

That’s not the entire picture though. Population studies show that there were four million more horses in the US in 1925 than in 1900. By 1930, so over 20 years since the Model T Ford first opened up a mass market for cars, the number of horses had fallen, but only by a fifth.

It was only after the Second World and the 1950s that the American horse population went into precipitous decline.

Mr Seba does not accept this challenge to his model of rapid change. “Essentially we had three minor things happen in that time-frame you mention. We had World War One, we had the collapse of the financial system in the US and we had World War Two you know these are small hindrances to the disruption.”

Is he seriously saying these events are minor? “I’m just being facetious.”

The coming disruption, the one that will kill the petrol-powered privately-owned car in barely a decade will begin in 2021, when governments permit the general use of self-driven vehicles, he expects.

The first elements are already stirring, he says. “If you look at Uber, to give a recent example, a company that was started in 2009 had more bookings in 2016 than the whole taxi industry in America. Seven years. That's all it took.

“In San Francisco 20 per cent of vehicle miles travelled are Uber and Lyft. So disruptions are happening even more quickly now than they have been 100 years.

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The next stage is the convergence of self-driving cars and electric engines, which will produce what he calls the “10X” phenomenon, when a product becomes ten times cheaper than it did before.

Large corporations will buy fleets of electric vehicles, he says, using their purchasing power to drive down costs that are already lower than petrol engines. Compared with buying a new car at, say, US$50,000 in payments over five years, this model is cheaper for consumers by an annual factor of around $6,000.

“Essentially, someone who is going to buy a new car is going to make this decision. Do I want to spend $50,000 over the next five years to own this thing I’m only going to use four per cent of the time?

“Or do I want to spend, on demand, a thousand bucks a year whenever and wherever I want to use a car? That’s a no brainer.”

He cites another recent example by producing his Apple iPhone 8. “Folks in 2007 did not get the fact that this was disruptive. They would say ‘Who would ever want to buy a $600 phone when you could buy the $100 Nokia’?"

“Remember Nokia? Gone. What they did not get is that this is not a phone, it’s a computer. One of the things it can do is make a phone call.

“So why did this happen in 2007 and not 05 or 09? The technologies that made this possible at this price happened in 2007. That when the convergence of technologies happened.”

“Lesson two?  Disruptions happen from the outside. It wasn’t the Nokias or the BlackBerries or the ATTs. It was the Googles and the Apples, who had never even built a phone before.”

Thus he imagines a vehicle that is also a mobile Starbucks that might take you and colleagues to work.

It all makes economic sense in part because electric vehicles will have a lifespan two and half times that of petrol cars. “You will need one electric vehicle for every two and a half combustion engines.

"At today’s prices. So the cost per mile for EV’s, even if they don’t get cheaper is going to be two and half times less.  And they will be ten times cheaper to maintain and ten time cheaper to fuel.”

What about the love people feel for their cars, for owning a cherished brand that in part defines their identity? The human factor in all this. After all, sales of vinyl records, a technology that was supposed to die in the 1980s, just rose for the 12th successive year.

“We liked horses also, and when the Model T came along?  Gone.

"In San Francisco, almost ten percent of folks who got rid of their car last year did not buy a new one. That’s not a small number. They are using Uber and Lyft. And that’s at today's prices.”

“People are going to stop buying cars because of that. Also the disabled, the very old, the very young, the very poor, who don’t own cars and have really bad public transportation, (they) are going to have little choice but to get on board and that’s a critical mass of users that basically going to tip it over.”

Yes, he says, private cars will still be around in 2030. In fact, they could still represent 40 per cent of the total number of vehicles. But they will be actually driven less and less. The 60 per cent that are self-driven and electric will perform 95 per cent of journeys.

He admits there will be challenges. People will lose their jobs, especially car dealers and garage mechanics. His model depends on high population density, so communities a long way from cities are going to need government subsidies if they are not to face prohibitive transport costs. But this already happens, he points out, with electricity and phone services.

Is he sure about all this? “How likely is it that I'm wrong? It’s not likely. Track my record. I predicated four years ago here that we would have electric vehicles with 200 mile range at $40,000, unsubsidised.

“And folks thought I was insane. Guess what we have two, with more coming. In 2009, I predicted that solar would be three and half cents per kilowatt hour by 2020. Guess what? We are there already.

“This may happen even more quickly than I am saying,” he concludes.

Or as we say in this part of the world, “Inshallah.”