Luxury Will Carve Out Niche in Future Mobility

When cars drive themselves, anyone and everyone could have access to a robotic chauffeur.

This will turn all human drivers into passengers, allowing them to use their commute to work, relax or play games. It opens up a multitude of options that certainly sound more creative or luxurious than what drivers experience today but what does that mean for the future of transportation? Is mobility slowly moving toward luxury?

“It depends on what you think of luxury,” said Michael Mikos, CFO and director of strategic development at car2go North America, a subsidiary of Daimler AG. “Is it just beyond what you can do in your car today because you’re stuck driving? Now, with autonomous technology, you can get in chairs that spin and you have TVs. Is it really luxury when you compare the difference between a Kia and a Mercedes-Benz or is it just enhancing something because it’s a different mode of transportation? I think there’s a slight difference between the two.” Mikos added that, while he thinks there will always be luxury cars, the level of luxury will not be defined by the vehicle’s level of autonomy.

Ryan Gee, co-founder and COO of Priva, a regional travel start-up with door-to-door transportation via Mercedes-Benz Sprinters, agrees that premium offerings may not take over. However, he does expect to see more features that cater to a vehicle’s occupants. “I think there’s going to be a lot of permutations of vehicle interiors in the age of autonomous vehicles,” said Gee. “If you think about the vehicles of today, they are typically occupied by one person – exclusively the driver for the vast majority of them. As a result, vehicles are optimized for the driver experience but, as soon as the driver is a machine, I fully expect vehicle interiors to be optimized for passengers.”

Gee anticipates that future vehicles will be designed for productivity/collaboration, entertainment, or interacting with family while facing each other. “I also fully expect more passenger traffic to be ground-based as technology, like vehicle electrification and autonomy, reduces the cost to operate these types of services,” Gee added.

While luxury may never dominate the entire mobility spectrum, it has already had an interesting effect on car sharing. “When we transitioned to Mercedes-Benz vehicles, we saw people taking more and exponentially longer drives,” said Mikos.

New way to develop luxury AVs

Last spring BMW opened a new autonomous vehicle campus outside of Munich. The automaker built this campus to bring its various teams and departments together to work in a single location.

“We have to change the development process in how we do it,” said Oliver Rumpf-Steppat, head of product requirements, development and connected drive at BMW of North America. “We hired a lot of software guys, so we’re doing a lot of software on our own. We are changing our core competencies and embracing the new technologies we need for autonomous driving. If you want to do this, you also have to change how you develop and how people work. It’s in agile teams, it’s in open architecture.”

Rumpf-Steppat stressed the importance of making sure that you don’t waste time working on solutions that are no longer needed by the time they are released. “We’re trying to keep track of what are the requirements, what we react on and really agile our development process,” he said. “I think in the beginning it was slower because we had to learn a lot of stuff but then you’re speeding up and it’s moving so fast and we have to be that fast.”

Rumpf-Steppat is also keeping an eye on the potential regulations for autonomous vehicles in the United States. While there are certainly benefits to working on vehicles in a market without restrictions, he would prefer to have a legal framework to rely on sooner rather than later. “We have to know the rules we have to follow,” he explained. “The worst thing that could happen is if we have 50 different sets of rules in the US, so it would be really advantageous if we had a federal law. At the moment NHTSA has a proposal and some of us are working on that. I think this is a very important thing that has to come up soon so you can really rely on certain boundaries.”

Safety is another concern after one of Uber’s self-driving cars hit and killed a pedestrian walking across the street. This has inevitably affected the way people perceive the future of AVs. Consequently, trust will be essential to the success of self-driving vehicles – without it, consumers will be reluctant to get inside.

“I think the safety aspect is one every brand should take care of,” Rumpf-Steppat affirmed. “We have to do everything to have a development mindset that ensures that our vehicles are safe and the technology that gets in customers’ hands is mature enough and safe enough that nothing like that happens.”