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Skytek series: drone legislation, research, data, science and safety
October 6, 2015

Trust and the Future of Cars

Long ago, during an era that predated basic adult responsibilities like feeding children, paying a mortgage, and generally avoiding high-risk behaviors, I would go racing on weekends.

Unforgivably, in the eyes of my mother, I spent several years road-racing motorcycles and then, in a fit of pique, bought an older Porsche 911 (for less, it should be noted, than the cost of a new Honda Civic).

It had skinny tires, no anti lock brakes, no assisted steering, and made maybe 225 horsepower on a good day. She was loud, angry and temperamental and quick to punish lapses in judgment or gaps in technique, and at speed, it felt like every corner of the car wanted to go in a different direction.

One day, a good friend dangled the keys to his brand new, very modern, very powerful Corvette Z06 and invited me to do a few hot laps.

It was jaw dropping, and not simply because of the intoxicating amount of power the fuming V8 under the hood produced at the slightest provocation of the gas pedal. It was the fact that all this power was useable by a hack like me. Anti-lock brakes, launch control, traction and spin control, and an electronic suspension that adjusted to track conditions within microseconds meant that not only had I just been given the reins to a rhinoceros, but that I really couldn’t screw up even if I wanted to.

Its magical collection of semiconductors and algorithms made me look (and, more importantly, feel) like Jackie Stewart incarnate. I felt like I was driving some kind of rocket ship, like I was driving the future itself. All I had to do to go fast was trust the car.

Trust Your Feelings, Luke

I thought about this experience as I read an article in the New York Times titled “Trying to Win the Public’s Trust With Autonomous Cars, at 120 M.P.H.” which showcases a hot rod Audi RS 7 named “Robby” (my name, misspelled, so I’ll ask you to forgive me for rolling my eyes) with enough autonomous driving technology to have it circling the Sonoma Raceway at high speed.

There is a driver in the Audi, but his only job is to hold what is essentially a panic button that in the event something goes awry will shut the whole thing down. The technology works, of course, and nothing goes wrong, so we’re getting a lot closer to the day where that panic button isn’t in the sweaty palms of a nervous reporter, but is buried behind glass and given barely a second thought as the cars we’re in pilot us about town (or across country) with de minimus input or involvement from passengers.

Which raises a very interesting point about this particular technology category as it explodes in terms of innovation and visibility: autonomous cars, regardless of the quality of their technology or the value proposition of the product itself, will only be successful when they’ve earned public trust.

This is a novel problem for carmakers to face, because selling the technology and the vehicles that deploy it is not really a marketing problem to solve for – it’s a complex political, regulatory, and social problem, involving multiple audiences and stakeholders, and in this country at least, poses a fascinating cultural question: while Americans love their cars and always have, they must now ask, can they be trusted?

Trust, But Verify

There is a related issue here that is equally interesting to us – namely, that when it comes to public perceptions about the future of automobiles, more often than not, actual car companies are not part of their thinking.

And if car buyers, regulators, and the general public are going to have to invest their trust in self-driving cars for this particular future to come to pass, that’s a serious disconnect.

For example, who exactly springs to mind when we think about the future of the automobile?

Google’s driverless car effort gets an enormous amount of mind share (and a disproportionate amount of press) and the mere mention that Apple may be entering the car business set both broad and category specific media alight.

The data bears this out: on Twitter, Apple gets roughly 13x the mentions within “autonomous driving” as a category than Ford does. Fascinating, because Ford sold over 2.4 million cars in the US last year, and Apple sold exactly none.

In traditional press outlets, in the past six months, Google attracted over a thousand more mentions in the autonomous driving category than Daimler.

Think about that: Daimler has been building astonishingly reliable and sophisticated vehicles for over a century, and is actually fielding autonomous vehicles (transport trucks, no less) on public roads – earlier this year in Nevada, and just yesterday in Germany, on public roads, in traffic, without incident.

In a sense, the future of autonomous driving is here, but the entire conversation about this future has essentially been carjacked by tech companies executing test drives in vehicles “that look like a Roomba, and sound like one, too” around a parking lot at Google’s headquarters.

So while Apple only has to hire a few engineers from Tesla and suddenly it’s at the center of the conversation about the future of cars, and Google is lapping parking lots, an actual auto company that fields a 75 foot long, 40-ton truck on public highways at 50 miles per hour is old hat – at least as far as the public and most media outlets are concerned.

What more does a company have to do to get invited to the party?

Hardware, Software, or Both?

There is a lot to unpack here, and one valid response might well be, “so what?” After all, there is also the perfectly reasonable contention that OEM manufacturers are, frankly, best off understanding themselves as primarily hardware companies – or, in the parlance of Bill Ford, positioning the enterprise as “thoughtful integrators” of other people’s technology.

My instinct is that there will ultimately be more value in offering a combined and integrated product than there will in offering a hardware platform only. After all, it’s tough not to notice the margins on iPhones.

But the other key consideration here, and one that once again highlights the critical role trust plays, is that connected vehicles means vehicles in a position to collect the kinds of data that consumer-facing businesses dream about. Where you are. Where you’re going. When you’re going. How long you were there. And it won’t be long before your car knows why (jump in the car, have it get you a couple tickets to a show and book a table at a decent restaurant because it remembers, not that you wouldn’t, it is your wife’s birthday today).

That data is incredibly valuable, and being able to collect and parse it will be worth far more to a business than the markup at the dealer on the Road Queen Family Truckster. But that data is also incredibly sensitive, precisely because it is private.

Affirmative, Dave. I Read You.

So if you’re going to exist in the Car of the Future ecosystem, and you’re interested in the broadest possible opportunity set (and the widest margins) you’ve got data privacy and security issues that rival those of a Swiss bank.

We did some recent internal research here, and one of the fascinating discoveries was that technology companies, on balance, enjoy higher levels of trust than most other institutional categories (government, health care providers, insurers, etc.) when it comes to personal data – and this is true both in the United States and Europe.

And so here again, we find OEM auto manufactures a step behind their technology-driven competitors. Certainly, given recent events, I can’t imagine there being a very comfortable conversation centered on “trust” in the head office over at Volkswagen.

If I were at a legacy auto manufacturer, I would be up at night thinking very carefully about making sure I was participating in the conversations about the future of my business, to simply make sure I had a seat at the table when it comes to shaping it.

Right now, those companies aren’t really there – at least not as far as the public or the press is concerned. And to me, the key to earning that seat is both appreciating the value of, and clearly articulating an understanding of, earned trust.

Robbie Goffin
A career Wall Street sales executive, Robbie has a deep knowledge of and connectivity within the institutional investment community. Robbie deploys his understanding of communications, marketing, sales processes, and the capital markets to the benefit of our clients.

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