The Future of Transportation: From A to B in the Second Machine Age

For thousands of years, humanity was on a very slow and gradual upward trajectory in terms of our human development. That all changed in the late eighteenth century with the advent of the Industrial Revolution (the First Machine age), which delivered unprecedented growth in human progress and population.

The most important technology underpinning this movement was one thing - the steam engine. This allowed humans to overcome the limitations of human and animal power to move things, and allowed us to generate useful energy when we needed it. Without it we wouldn't have factories and mass production, or have  been able to build railways and provide mass transportation. 

Our modern life has been built on the backs of this technology. But as we make continued progress with digital technologies and we can increasingly deliver software globally at scale, we are starting to see the emergence of a second shift (what Erik Brynjolfsson and Andrew McAfee call the Second Machine Age).

Currently some large changes are happening on the transportation side of this equation. This has been driven by a re-imagining of how we move objects and people from A to B. 

The Growth of Uber

Uber is arguably creating the first step towards disruption.

The first time I ordered an Uber ride, it felt like something out of a dream. A friend had given me a $20 off voucher, and I had found myself in the position of being stuck next to a football stadium on game night with no cabs in sight - the perfect time to give it shot.

Accessing the app was simple, signup took a few steps, and when the main interface opened at the time it seemed like magic. I could instantly see the available cars on a map of the city, and order one with a quick press of a button.

A Black SUV turned up in minutes, and I could track it the whole way on my phone. When it arrived, the driver greeted me by name, and I could verify his identity by his picture within the app. 

Once we reached our destination, my credit card was charged seamlessly - no fumbling for cash, and no 10 minute delay messing around with an outdated EFTPOS machine that would repeatedly break down.

At this moment, I realised that fundamentally Uber had paved the way to completely disrupt the entrenched taxi service system that had caused so much pain and frustration. Rather than simply fixing a single part of the problem, they had focused on the bigger picture by tackling the entire ecosystem - how to better hail the cab using mobile, instant visibility, better cars, seamless payment systems, and driver ratings and feedback.

The initial success of Uber has happened because they have managed to deliver a flywheel of growth built upon three elements; finding a problem or pain point that affects millions of people, addressing the entire taxi ride ecosystem, and creating a beautiful and elegant solution that is customer focused and is just begging for word of mouth recommendation.

I definitely drunk the Kool Aid myself. After the first ride, I could not ever see myself trying to deal with traditional taxi's ever again, and would tell anyone who would listen to me that they had to try it out.

The Next Phase of Growth

Uber is now valued at $3.76 billion dollars, including an endorsement by Google to the tune of a $258 million. While this has left some people scratching their heads, when you consider the disruption potential to traditional transportation systems, they may in fact be undervalued.

Entrepreneur Michael Wolfe encapsulated this in his analysis of the Uber vision:  

  • If you think of Uber as a town car company operating in a few cities, it is not big.
  • If you think of Uber as dominating and even growing the town car market in dozens of cities, it gets bigger. (Data point: there are now more Uber black cars in San Francisco than there were ALL black cars before Uber started).
  • If you think of Uber as absorbing the taxi markets, it gets pretty huge.
  • If you think of Uber bringing taxis to parts of the world that did not have them before because of insufficient density, it gets even larger.
  • If you think of Uber as a personal logistics service that can drive your kids to school and back, take you to work, pick up your parents at the airport, drive you to date night so you can get your drinks on, it gets very very large.
  • If you think of Uber as delivering both people as well as things (packages, dry cleaning, groceries) it gets even larger.
  • If you think of Uber as a replacement for your car, it gets even larger.
  • If you mix in a fleet of self-driving cars, orchestrated by Uber, it grows again.
  • If you think of Uber as a giant supercomputer orchestrating the delivery of millions of people and items all over the world (the Cisco of the physicalworld), you get what could be one of the largest companies in the world.

Think about this for a minute. Uber is radically changing the way we think about the fundamentals of how we get around. In the past we have been responsible for purchasing our own vehicles that we need to maintain, store and manage. In the future, transportation will become more of a utility like electricity and water, purchased on a need by need basis for anything we require.

So is it science fiction to imagine a city full of robotic cars?  

The Google Car

In the Second Machine Age, Erik Brynjolfsson and Andrew McAfee recount their experience taking a ride in just such an autonomous driverless vehicle while visiting Google's Silicon Valley headquarters.  

"The car performed flawlessly. In fact, it actually provided a boring ride. It didn't speed or slalom among other cars; it drove exactly the way we're all taught in driver's ed. A laptop in the car provided a real-time visual representation of what the Google car 'saw' as it proceeded along the highway - all the nearby objects which its sensors were aware. The car recognized all the surrounding vehicles, not just the nearest ones, and it remained aware of them no matter where they moved. It was a car without blind spots. But the software doing the driving was aware that cars and trucks driven by humans do have blind spots. The laptop screen displayed the software's best guesses about where all these blind spots were and worked to stay out of them."

The Internet loves to lament the failure of science to deliver them their Hoverboard, the floating skateboard from the Back to the Future series. I never understood this because most people are terrible at skating, so I could never see them getting past a few hilarious Fail video worthy falls. 

My tastes are a little different. I was always nostalgic for the Johnny Cab in Total Recall, the self driving taxi manned by the albeit creepy robot.

The Google car ride mentioned above happened in 2012, meaning that self-driving cars are not only an actual reality, they have had a further two years of development on this concept. I have my Johnny Cab. This has paved the way for Wolfe's prediction to become a reality.  

The Paradox of Disruption

Just like the Industrial Revolution made huge swathes of humanity redundant overnight while creating entirely entirely new opportunities, this next evolution poses some interesting questions about how transportation will shift things in society.

The great paradox of Uber is that right now it is creating a sharing economy built around human drivers to underly its growth, but to look into its future is to see fleets of unmanned cars being the backbone of its transportation infrastructure. Humans just don't fit into this equation.

This is similar to manufacturing. Most Western countries have off-shored this component to growing economies due to cheap labour. As robots are able to deal with complex tasks more easily and they become cheaper than this labour, we may see these factories returning - but without any human involvement.

I was catching up with a friend Tom the other day over a beer and talking about this paradox. I was lamenting the fact that driving a car is one of the few remaining tasks in the world that creates a shared sense of mastery among people. There are not many other experiences that both generate flow states and naturally result in 10,000 hours of practice.

He had a very interesting counter argument to this. Every holiday period the news gets plastered with the death toll on the roads, and we are exposed to images of horrifying twisted metal wrecks. He has just had a son, and there is a good chance that when he is our age a car accident during the holidays could be as rare to him as a plane crash is today. All thanks to autonomous vehicles.

The disruption of transportation is already happening, and will likely change the very fabric of society as the Second Machine age rolls along. Like all big shifts, there are positives and negatives to this evolution, an event that is likely to occur much sooner than we think.