Autonomous driving and fleet
Autonomous driving technologies are developing fast. But, despite the buzz around the potential impact of self-driving options, aspects such as timing, uptake and penetration remain hard to predict.
The new technologies that make autonomous driving possible also bring with them possibilities for completely new mobility models and services. In addition, developments based on networks, sensors, mobile communication, real-time information, and new levels of connectivity are changing our view on mobility. It is expected that autonomous vehicles (AVs) will open up the way for on-demand driving solutions: a car when and where it is needed.
But, the big question that is begging for an answer is how and in what measure these disruptive technologies could impact fleet.
3 ways in which AVs will impact fleet
1. The impact on a tool-of-trade fleet will be twofold: both on the role of a driver as driver and on car usage. On the other hand, the impact on benefit cars will centre round usage and ownership of a car. And, of course, fleet management will be affected, as shifting ownership and operational models gradually require adjustments in management models also.
2. In the distant future, autonomous vehicles will do away with ‘wasted commute time’. Such future scenarios envision commuting in a self-driving car, spent doing activities to enhance life and work quality. Meetings can be prepared, orders can already be processed or the time can be used as relaxation time to improve work/life balance.
3. It is to be expected that autonomous cars could potentially modify the current vehicle mobility model and maximize vehicle utilization. AVs could service multiple drivers and, in some cases, eliminate the need for individually assigned company vehicles, thereby decreasing vehicle idle time. This could be an ideal solution for fleets with cars assigned to a single driver and parked for long periods during the day that could otherwise be used for other business activities. However, such changes would require a thorough policy review. Multiple users would require liability and responsibilities to be carefully defined. In addition, vehicle location and logistics would need to be monitored and made available real time to both users and a coordination centre. It is clear that AVs will require adjusted fleet services and policy. Companies will need to weigh the pros and cons of managing an AV fleet in-house or to outsource it.
How fleet will benefit from AVs
AVs will improve safety and reduce accidents and incidents. Already, roads are getting safer with the Advanced Driver Assistance Systems (ADAS) in our current vehicles. Quite possibly, AVs will even eliminate most accident-related costs, such as damages and insurance. Car policies will need to be reviewed and renewed to support this improved safety trend. Policies could, for instance, encourage the adoption of in-car safety features through an adjusted car budget or car selection.
To monitor the effect of new safety features (and prove that fewer accidents and incidents are occurring) accident and cost reporting is required. Such monitoring will give insights into the actual reduction in damage costs and will ultimately drive down insurance premiums. In the very long term it can be expected that accidents and breakdowns will become a matter of product liability rather than car insurance. However, the bad news for the time being is, that the cost of repairing damages incurred by AVs will be high due to the intricacy of the technology applied.
Currently, influencing driver behaviour and – by extension – cutting back on fuel-, maintenance- and damage costs is a key priority for fleets. AVs will make such costs even less dependent on driving skills. What’s more, more efficient routing and driving performance of AVs could minimize such costs.
The self-driving car will ultimately change company car costs. The availability of accurate baseline cost reports will be key. Cost reductions will start with lower costs for damages, insurance and fuel, but with higher acquisition costs. Current financing models, in which a car is either owned or leased under a financial or operational lease, will also be affected. AVs will open up the way for new usage models and vehicle sharing: supporting financial models will have to be adapted to new realities that include car sharing.
For now, fleet decision makers are advised to keep a close watch on AV developments and decide whether they want to be an early- or a majority adapter. And one thing is for sure: ADAS features in our cars already make driving easier, safer and more fuel-efficient.
In a study held mid-2015, LeasePlan asked 4,000 company car drivers worldwide whether they would feel safe and comfortable as passenger in a driverless vehicle. The majority of drivers said they would be slightly nervous, but showed a pioneering interest in AVs .
Driverless vehicle survey LeasePlan
Source: PR Survey LeasePlan 2015
5 essential (unanswered) questions regarding AVs and fleet
1. Will sharing AVs be sufficient to offset the higher costs?
Autonomous vehicles will, certainly in the initial stages, have higher acquisition costs. This could drive up the total vehicle costs, as expected savings on fuel and damages will be insufficient to offset the higher acquisition costs.
2. Will companies still need a fleet or simply pay for usage and other forms of mobility?
Most likely, conventional fleet models will remain and the autonomous car will be available as a feasible alternative for certain driver groups such as the perk drivers.
3. What about the residual value of a self-driving car?
Today’s vehicles still have a significant residual value at three to four years, as there is a high demand for used vehicles in the consumer market. But what will be the residual value of AVs, especially in the light of possible shifting ownership models? An answer to this question can only be answered once AVs enter the pioneering stage.
4. Will regulations be adopted in favour of autonomous driving or will it inhibit adoption of autonomous driving?
It is expected that self-driving cars will start filling our streets only slowly and roads will not be accident free. Many questions regarding liability and regulations still need to be answered.
5. What kind of infrastructure will be developed for autonomous cars?
Will the current infrastructure be sufficient or will AVs require a dedicated road structure with ditto traffic lights, petrol stations and services?
Partial autonomy – helping you prepare for the future
The first pilots with self-driving cars – by both the traditional car manufacturers as well as new, disruptive hi-tech industry players – have been successful. And now we are seeing some ambitious local governments opening up the public infrastructure for testing new mobility options, whilst OEMs continue to include more autonomous features in their cars.
While it is expected to be some time yet before fully autonomous vehicles fill the roads, transportation and mobility innovations and ADAS developments that are already available, are helping companies adapt to new realities. In fact, new technologies can only be embraced by fleets, as they offer optimized driving (and lower TCO) and driver safety. What’s more, the steady integration of autonomy in driving, gives companies time to prepare for the disruption that is set to happen regarding costs, ownership, mobility, fleet financing and business opportunities. But despite the disruption, it is expected that fleet structures will remain, with AVs available as a feasible alternative for certain driver groups.