New business opportunities due to self-driving cars

This is a slightly ex­panded ver­sion of a talk pre­sented at the Less Wrong Euro­pean Com­mu­nity Week­end 2017.

Pre­dic­tions about self-driv­ing cars in the pop­u­lar press are pretty bor­ing. Truck drivers are los­ing their jobs, self-driv­ing cars will be more rented than owned, trans­port be­comes cheaper, so what. The in­ter­est­ing thing is how these things change the cul­ture and econ­omy and what they make pos­si­ble.

I have no idea about most of this. I don’t know if self-driv­ing cars ac­cel­er­ate or de­cel­er­ate ur­ban­iza­tion, I don’t know how pub­lic trans­port re­sponds, I don’t even care which of the old com­pa­nies sur­vive. What I do think is some­what pre­dictable is some of the busi­ness op­por­tu­ni­ties be­come eco­nom­i­cal that pre­vi­ously weren’t. I dis­re­gard re­tail, which would con­tinue mov­ing to on­line re­tail at the ex­pense of brick and mor­tar stores even if the FedEx trucks would con­tinue to be driven by peo­ple.

Diver­sifi­ca­tion of ve­hi­cle types

A fam­ily car that you own has to be some­what good at many differ­ent jobs. It has to get you places fast. It has to be a thing that can trans­port lots of gro­ceries. It has to take your kid to school.

With self-driv­ing cars that you rent for each seper­ate job, you want very differ­ent cars. A very fast one to take you places. A roomy one with easy ac­cess for your gro­ceries. And a tiny, cute, uni­corn-themed one that takes your kid to school.

At the same time, the price of au­ton­omy is drop­ping faster than the price of bat­ter­ies, so you want the low­est mass car that can do the job. So a car that is very fast and roomy and uni­corn-themed at the same time isn’t eco­nom­i­cal.

So if you’re an en­g­ineer or a de­signer, con­sider go­ing into ve­hi­cle de­sign. There’s an ex­plo­sion of cre­ativity about to hap­pen in that field that will make it very differ­ent from the sub­tle iter­a­tions in car de­sign of the past cou­ple of decades.

Who wins: Those who de­sign use­ful new types of au­tonomous ve­hi­cles for needs that are not, or badly, met by gen­eral pur­pose cars.

Who loses: Own­ers of gen­eral pur­pose cars, which lose value rapidly.

Ser­vices at home

If you have a job where cus­tomers come to visit you, say you’re a doc­tor or a hair­dresser or a tat­too artist, your field of work is about to change com­pletely. This is be­cause ser­vices that go visit the cus­tomer out­com­pete ones that the cus­tomer has to go visit. They’re more con­ve­nient and they can also eas­ily ser­vice less mo­bile cus­tomers. This already ex­ists for rich peo­ple: If you have a lot of money, you pay for your doc­tor’s cab and have her come to your man­sion. But with trans­port prices drop­ping sharply, this reaches the mass mar­ket.

This cre­ates an in­ter­est­ing dy­namic. In this kind of job, you have some vague ter­ri­tory—your cus­tomers are mostly from your sur­round­ing area and your num­ber of com­peti­tors in­side this area is rel­a­tively small. With ser­vices com­ing to the home, ev­ery­one’s ter­ri­to­ries be­come larger, so more of them over­lap, cre­at­ing com­pe­ti­tion and dis­com­fort. I be­lieve the typ­i­cal solu­tion, which re­in­states a more sta­ble busi­ness situ­a­tion and re­quires no ex­plicit co­or­di­na­tion, is in­creased spe­cial­iza­tion within your pro­fes­sion. So a doc­tor might be less of her dis­trict’s gen­eral prac­ti­tioner and more of her city’s lead­ing spe­cial­ist in one par­tic­u­lar ill­ness within one par­tic­u­lar de­mo­graphic. A hair­dresser might be the city’s ex­pert for one par­tic­u­lar type of hair­cut for one par­tic­u­lar type of hair. And so on.

Who wins: Those who adapt quickly and steal cus­tomers from sta­tion­ary ser­vices.

Who loses: Sta­tion­ary ser­vices and their land­lords.

Rent anything

You will not just rent cars, you will rent any­thing that a car can bring to your home and take away again. You don’t go to the gym, you have a mo­bile gym visit you twice a week. You don’t own a drill that sits un­used 99,9% of the time, you have a lit­tle drone bring you one for an hour for like two dol­lars. You don’t buy a huge sound sys­tem for your oc­ca­sional party, you rent one that’s even huger and on wheels.

Best of all, you can sud­denly have all sort of ab­surd lux­u­ries, stuff that pre­vi­ously only mil­lion­aires or billion­aires would af­ford, pro­vided you only need it for an hour and it fits in a truck. The pos­si­bil­ities for busi­ness here are dizzy­ing.

Who wins: Peo­ple who come up with clever busi­ness mod­els and the ve­hi­cles to im­ple­ment them.

Who loses: Own­ers and pro­duc­ers of in­fre­quently used equip­ment.

Self-driv­ing ho­tel rooms

This is a spe­cial case of the former but de­serves its own cat­e­gory. Self-driv­ing ho­tel rooms re­place not just ho­tel rooms, but also tour guides and your holi­day rental car. They drive you to all the tourist sites, they stop at af­fili­ated restau­rants, they oc­ca­sion­ally stop at room ser­vice sta­tions. And on the side, they do overnight trips from city to far­away city, com­pet­ing with air­lines.

Who wins: The first few com­pa­nies who perfect this.

Who loses: Sta­tion­ary ho­tels and mo­tels.

Rise of al­co­holism and drug abuse

Lots of peo­ple lack in­trin­sic mo­ti­va­tion to be sober. They ba­si­cally can’t de­cide against tak­ing some­thing. Many of them cur­rently make do with ex­trin­sic mo­ti­va­tion: They man­age to at least not drink while driv­ing. In other words, for a large num­ber of peo­ple, driv­ing is their only rea­son not to drink or do drugs. That rea­son is go­ing away and con­sump­tion is sure to rise ac­cord­ingly.

Hey I didn’t say all the busi­ness op­por­tu­ni­ties were par­tic­u­larly eth­i­cal. But if you’re a nurse or doc­tor, if you go into ad­dic­tion treat­ment you’re prob­a­bly good.

Who wins: Sup­pli­ers of mind-al­ter­ing sub­stances and re­hab clinics.

Who loses: The peo­ple who lack in­trin­sic mo­ti­va­tion to be sober, and their fam­ily and friends.

Au­tonomous boats and yachts

While there’s a big cost ad­van­tage to ve­hi­cle au­ton­omy in cars, it is ar­guably even big­ger in boats. You don’t need a sailing li­cense, you don’t need to hire skil­led sailors, you don’t need to carry all the room and food those sailors re­quire. So the cost of go­ing by boat drops a lot, and there’s prob­a­bly a lot more traf­fic in (mostly coastal) wa­ters. Again very di­verse ve­hi­cles, from the lit­tle skiff that trans­ports a few di­vers or an­glers to the per­sonal yacht that you rent for your hon­ey­moon. This blends into the self-driv­ing ho­tel room, just on wa­ter.

Who wins: Ship­yards, es­pe­cially the ones that adapt early.

Who loses: Cruise ships and marine wildlife.

Mo­bile storage

The only rea­son we put goods in ware­houses is that it is too ex­pen­sive to just leave them in the truck all the way from the fac­tory to the buyer. That goes away as well, al­though with the huge amounts of moved mass in­volved this tran­si­tion is prob­a­bly slower than the oth­ers. Ship­ping con­tain­ers on wheels already ex­ist.

Who wins: Man­u­fac­tur­ers, and lo­gis­tics com­pa­nies that can provide even bet­ter just in time de­liv­ery.

Who loses: In­ter­me­di­ate traders, ware­houses and ware­house work­ers.

That’s all I got for now. And I’m surely miss­ing the most im­por­tant in­no­va­tion that self-driv­ing ve­hi­cles will per­mit. But un­til that one be­comes clear, maybe work with the above. All of these are origi­nal ideas that I haven’t seen writ­ten down any­where. So if like one of these and would like to turn it into a busi­ness, you’re a step ahead of nearly ev­ery­body right now and I hope it makes you rich. If it does, you can buy me a beer. :-)