Ask a Silicon Valley futurist about the potential of self-driving cars, and you’ll hear a vision of shared mobility – people won’t own cars, they’ll subscribe to transportation services that will send vehicles to their doors to pick them up and take them where they want to go. Owning a car will be as much a foreign concept to people 10 years from now as dial-up Internet is today.

Instead of sitting in parking lots, cars will be in constant motion, and far fewer will be needed. It’s a vision that’s drawing huge investments – $1 billion from Ford in February to fund tech startup Argo AI, $1 billion from General Motors (GM) last year to buy Cruise Automation, $500 million from GM in early 2016 to buy a big part of car-sharing service Lyft.

While most industry watchers expect autonomous technology to develop at a rapid pace, a few are suggesting that the utopian future with small numbers of vehicles in constant use is not realistic.

More passengers, more traffic

One of the biggest questions for automotive manufacturers and suppliers is what impact autonomous technology will have on sales. Visionaries say producers should brace for massive volume declines as people turn away from ownership. Glenn Mercer, a longtime automotive analyst who has studied autonomous systems for the National Automobile Dealers Association, presents an opposing view.

“If you make an experience cheaper and more effective, people are going to use more of it,” Mercer says. “Better asset utilization and vehicle sharing – some of that may happen. But you’re dramatically increasing the number of people with access to transportation.”

Early adopters of driverless cars will likely be people who can’t drive for themselves, such as disabled and elderly people. With the aging American population, that second group could be massive within the next 15 years, Mercer says.

If non-driving seniors simply use Uber or Lyft, demand for new vehicles may only rise slightly, but Mercer adds that the demographic most likely to use autonomous vehicles initially is the least technologically savvy. So, a very possible outcome will be large numbers of seniors buying self-driving cars – increasing the number of vehicles on the road.

“The implications for congestion are massive,” Mercer says. “Even if the vehicle sharing model becomes dominant, you’re still talking about moving more people around every day. You might be able to improve the capacity utilization of individual vehicles, but the number of trips traveled will go up, not down.”

Taking care of cars

Joe Vitale, global automotive industry leader for Deloitte LLP, believes vehicle sharing will start dominating the market by about 2035, and auto sales will fall sharply as fewer people own vehicles. But several issues will need to be settled, the biggest being the question of ownership.

Uber and Lyft rely on individuals to drive the vehicles and care for their cars. If late-night revelers spill their drinks, an Uber driver will clean the mess before picking up his next passenger. Take that driver away, and the ownership-free model starts looking a lot more like public transportation – cleanliness, vehicle condition, and basic comfort issues will vary greatly.

“Someone’s going to have to maintain the vehicles. The brand of the vehicle will be less important than the brand of the fleet services company managing your experience,” Vitale says.

The business model will be similar to taxi fleets in large cities – expensive equipment with labor-intensive maintenance. Because capacity utilization of vehicles would be very high, transportation costs to consumers will likely be lower than owning a vehicle, but the difference may not be as radical as some are predicting.

Look and feel

Vishwas Shankar, an automotive analyst at Frost & Sullivan, also believes that autonomous, shared vehicles will eventually dominate the industry. Ownership, care, and cost issues will need to be settled before service companies figure out how to make money (something that hasn’t happened yet with Lyft and Uber losing billions of dollars in recent years). However, automakers should continue investing in sharing services and developing new vehicles for the market.

“Design will change as autonomy takes a bigger role. Rear-seat comfort is going to be as important, if not more important, than the front seat,” Vishwas says.

The traditional shape and layout of modern vehicles assumes a front-seat driver, but that won’t be the case within the next 15 years, he adds. Designers will have the freedom to develop vehicles with radically different shapes when the need for large, forward-facing windows declines. Without pedals, steering wheels, and other mechanical features, more room will be available to fit into a smaller vehicle.

Share or own

Even without vehicle sharing, experts agree that the technology enabling autonomous vehicles will continue to develop at a rapid pace. Advanced driver assistance systems (ADAS), electronic safety systems such as adaptive cruise control and lane-departure warning systems, have become very popular in recent years. Those systems enable autonomous driving by adding sensors to vehicles and motor controls to take over operations if drivers don’t react to threats.

However, Vitale adds, drivers aren’t 100% comfortable with those systems, and as cars take over more of the driving experience, consumer wariness grows.

“In one survey, 74% of consumers in the U.S. said they felt that fully autonomous vehicles were unsafe. So there’s a lot of education that will need to take place,” Vitale says.

Mercer says consumer comfort will grow if automakers implement systems properly. He sees cultural issues being the bigger impediment to autonomous, shared vehicles. Given the choice between efficiency and convenience, consumers tend to pick convenience. That means buying bigger cars and houses and avoiding public transportation in favor of bumper-to-bumper commutes. Shared vehicle ownership will become less attractive if subscribing to a car service means waiting more than 20 minutes to leave work, or paying a premium if you live in a far-off suburb.

“There is an existential threat to the current system. If the pieces fit together just right, car sharing and autonomy could break existing models,” Mercer says. “It’s possible but not likely.”

Deloitte LLP

National Automobile Dealers Association

Frost & Sullivan

About the author: Robert Schoenberger is the editor of TMV and can be reached at 216.393.0271 or