Autonomous vehicles will clog our roads and line the pockets of maintenance and repair providers

Wednesday 24 October 2018

Article

Prepare for the mega traffic jam of the future. As cars become more and more available through on demand services we may see a tremendous rise in traffic. Up to 90% on some forecasts.

Some early indications of this can be seen in London, where the number of minicab licenced vehicles has surged in response to Uber - and is blamed for increasing traffic. 

In an eventual autonomous future, the effective cost of convenient personal transport will plunge (labour is the majority of the cost) and people will inevitably substitute journeys from public transport (who doesn't want A to B private comfort?) causing an explosion in vehicle miles.

Beyond being a potential nuisance, there is some great news in here for those who offer service and repair of vehicles. Most of these services are mileage-linked in some way or another, in the future they can expect a tailwind of volume if this mileage increases.

Hopefully this will go some way to offsetting the erosion of value as they increasingly serve B2B service providers rather than higher margin consumers.

The opportunity here is to be the kind of scale network (or virtual network) needed to support advanced mobility services i.e. national scale and with consistent quality, high utilisation and efficiency.

Will the large dealer groups (e.g. Pendragon, Marshall) or servicing chains (Kwikfit, Halfords) reach sufficient consolidation to play this role, or will the prize go to companies that can command virtual networks e.g. fleet management and accident management companies?

John Evison, Associate Partner

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