What If You Won’t Be Able to Buy an Apple Car?

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We know Apple is working on a car—but what if it turns out the company isn't planning on letting you drive or own that car? What if instead of designing a consumer car for end-users, Apple is instead designing a vehicle or vehicles it will use to deploy its own fleet of autonomous ride-sharing cars?

Apple Car Striding the Globe

Don't get me wrong. I'm not entirely sold on this notion myself. In fact, I'll play devil's advocate in a bit, but I find the idea compelling and interesting.

Skating to the puck

On Thursday evening, news broke that Apple had invested US$1 billion into Chinese ride sharing giant Didi. I posted a piece earlier on Friday looking at seven reasons why Apple might make such an investment, but there's another reason, too: Apple might want in on the ride sharing business.

That made me jump ahead to Apple Car. I know Apple is working on its own car, but there are couple of things that have always been difficult to reconcile. The biggest one is that car sales are sure to decline in the not-too distant future.

Once autonomous vehicles are a thing—and I mean a real thing—ride sharing is going to reshape the way we get around. Fewer of us will need cars—especially second cars—as vehicle use is made more efficient.

To that end, Uber has already made it clear it can't wait to fire all those pesky drivers earning the company money and move to its own fleet of autonomous vehicles. It's hard for me to imagine a future where this isn't the model for the entire world.

That means fewer cars sold, fewer cars on the road, less pollution, less congestion, and eventually fewer roads. Hoorah!

Owning a lucrative part of even a shrinking part of the market could make sense for Apple, but what if the company is looking past even that with plans to skate to where the puck will be and operate its own fleet of Apple ride sharing cars? Apple could compete against Uber on experience, not threatening journalists, and protecting customer data.

On the Other Hand

Again, I'm not entirely sold on the idea, but it's intriguing. On the other hand, credible leaks say Apple will enter the market in 2019 or 2020 with a vehicle designed for human drivers, not an autonomous vehicle, as those remain even further out.

It's possible Apple would attack both sides of this market by selling to customers while it works towards Apple Ride Share (not a good name, I know), but as it is I put this forward as Exhibit A on why my entire thesis is cockamamie nonsense.

Still...it's interesting. We are headed towards major disruptions of the auto industry as we've known it, and Apple is very adept at seeing making the future. Apple as a major player in a ride sharing, autonomous vehicle industry would massively diversify the company's revenue streams without necessarily sacrificing the things that make Apple "Apple."

Buying into China's Didi not only jump-starts Apple's education in ride sharing, it gives the company a possible avenue for its autos in the world's largest market. There's little doubt China would otherwise make it some degree of more difficult for Apple to do so on its own.

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Comments

John Martellaro

I like this half-baked idea!  And, I should add, half-baked ideas of people are better than ideas of half-baked people.

CudaBoy

What credible source thinks Apple will have a car out in 3 to 4 years?...pray tell me so I can light those igmos up as well. It’s as if nobody looks at Tesla and they are a SUCCESS, albeit chronically late on all their target dates. No car company would ever partner with Apple (why would they??) despite Marchionne begging. But even now Marchionne says autonomous cars will be perfected in about 5 years as opposed to 20. So, that means all by their lonesome Apple will design, test, and build factories, prototypes and a finished product in 3 years? Any design patents yet? Half baked are the Clones and Drones that think APPL’s (hit a low today) car is going to happen in 3 years. Copying Lyft/Uber and Google’s scrip cars makes more sense-but not 3 years out…. Anybody remember Think Small?...oops Think Different?

CudaBoy

Lee, interesting link with more “theories”, I wonder how “they” know exactly WHAT Apple is spending money on… Seems to me billions is going into their spaceship building and campus and other real estate ventures; how do we know THAT’S not where some money is flowing as opposed to product research? I still say a “system” might be interesting for Apple to delve into but I also believe without any evidence today of anything physical at all - no way Apple makes a car within 4 years. Also, 4 years from now the already established players will be experienced in autonomous. To gain experience you must uhhh ...be “experiencing” and since there is no Apple car yet - where is the experience coming from? Well, they are messing with other mfgs cars just as Google and Uber and Lyft are so the finger points to “system” rather than “car”.  The puck obviously is going to non-ownership of automobiles; full autonomy - no more Police,Insurance,Signage…..

Lee Dronick

  Lee, interesting link with more “theories”, I wonder how “they” know exactly WHAT Apple is spending money on… Seems to me billions is going into their spaceship building and campus and other real estate ventures; how do we know THAT’S not where some money is flowing as opposed to product research? 

You don’t hire that many automotive industry folks for things other than automotive.

craigf

“No car company would ever partner with Apple…”
Who might be interested in manufacturing vehicles under contract for Apple?
http://www.magna.com/capabilities/vehicle-engineering-contract-manufacturing

daemon

No car company would ever partner with Apple (why would they??)

I think the Indian company Tata would be more than willing to design and build Apple’s iCar….

Lee Dronick

Daemon, with our political climate Apple would be well advised to have them built here, at least for the domestic market.

brilor

That means fewer cars sold, fewer cars on the road, less pollution, less congestion, and eventually fewer roads

Possibly. There are also some negative possibilities: fewer cars means lower registration fee revenue for each State’s Dept. of Transportation. Lower revenue can mean more taxes elsewhere and/or reduced road maintenance. Lower revenue also eliminates jobs ( possibly fewer pollution check stations ). Less gas consumed means less gas taxes collected and folks in the gas/oil industry might lose their jobs too. Electric vehicles( whether BEV or fuel cell )  have many positives but there are negatives, so it’s good to keep it in perspective.

aardman

Let’s not overestimate how ride-sharing will reduce the over-all demand for cars.  Through the day, car utilization is concentrated in two peak periods—morning rush hour and evening rush hour.  If everyone who drove their own cars to work shifted to ride sharing, the stock of ride sharing cars will have to replace each and every one of those retired privately-owned cars.

Ride sharing will not reduce the demand for cars as much as true public transportation does.  It might even have the perverse effect where people still want to own a private car but choose ride sharing for their daily commute.  In that case, the demand for cars could conceivably rise!

brilor

...with our political climate Apple would be well advised to have them built here…

See your point Lee. However, Apple already builds most products in China without any ( IMO ) harsh press or other criticism. Other companies/corporations would be publicly skewered if they adopted Apple’s business practices.

brilor

Ride sharing will not reduce the demand for cars as much as true public transportation does

Probably but ride sharing implementations are easier to fund and approve than public transportation, so often public transportation needs languish due to lack of support ( both politically at the ballot box and financially to fund a project - like say light rail ). Then there are those areas of the USA where public transportation has no support at all. The ride sharing premise seems valid but public transportation doesn’t have enough support( and not universally accepted as a vehicle replacement ) to reduce car demand.

daemon

Other companies/corporations would be publicly skewered if they adopted Apple’s business practices.

Dell and HP both use Foxconn to manufacture their products just like Apple. I can’t even name a computer brand that is made in the US any longer, even MilwaukeePC shut down their PC manufacturing in Wisconsin….

Bryan Chaffin

Autonomous electric vehicle ride sharing/services will reduce congestion and pollution similarly to more traditional forms of public transportation. Furthermore, as Dave Hamilton has been saying a lot, it will reduce the amount of space we dedicate to street parking and vehicle storage (i.e. garages). That was at the heart of my assertion.

Bryan Chaffin

By the by, thanks for the wonderful discussion on this topic!

RonMacGuy

Let’s not forget that probably 1/3 to 1/2 of the US population does NOT live in a large city. I don’t see how ride sharing works from a suburb perspective when every M-F AM nearly EVERY suburbanite travels into the city and every M-F PM they travel home, let alone from a rural perspective. For suburbanites, you need to have the same amount of vehicles to move them from suburbs to city each morning and city to suburbs each evening, unless there is an increase to shared rides, which most people don’t want. And there are tens of millions of Americans who live in rural America and will have absolutely no desire to use autonomous vehicles. I will forever own my own car, as I may drive 5 miles, 50 miles, or 500 miles in any given day. What Apple can offer me is hopefully a car that can ‘learn’ my commute and my extra trips and help me out with a lot of the driving.

Lee Dronick

Ron see this table at the Department of Transportation. 75% of the population live in urban areas. Now that may include suburbs and bedroom communties, I wish that they had broke it down by population density.

http://www.fhwa.dot.gov/planning/census_issues/archives/metropolitan_planning/cps2k.cfm

RonMacGuy

Lee,

I found similar information elsewhere which said the urban areas included suburbs. So, I estimated the 1/3 to 1/2 based on guesswork. I couldn’t find a city/suburb split for ‘urban’ but given the large amounts of public transportation coming into cities from the suburbs, I have to suspect it is a huge amount living far enough outside the city to not receive any value from future autonomous vehicles that can be summoned for daily commutes (EVERYONE in the suburbs will be summoning them every morning so you will basically need a one-for-one vehicle for those living I’ll say 20-30 minutes outside the city. It would take too long for autonomous vehicles to pick someone up, drive them 20-30 minutes into the city, then return and get the next person. Just doesn’t make sense in my book to do so.

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