The GCC must embrace self-driving cars

Comment: Autonomous vehicle technology will have a devastating impact on countries that depend on oil exports. Yet players in the Gulf have a great opportunity
The GCC must embrace self-driving cars
Dubai clearly understands the benefits of autonomous driving.
By Alex Giannikoulis
Tue 18 Jul 2017 05:24 PM

About 130 years ago, the automobile revolutionised transportation, cities and commerce as well as our way of life. Today, we are on the brink of another such transformation.

Autonomous driving is coming on fast. Hardware manufacturers have been testing cameras, sensors and high-speed processors that can turn the car into a four-wheel computer. Elements of this autonomous functionality — adaptive braking, dynamic cruise control and automatic parking — are already available in high-end cars.

The hardware has not been the biggest challenge; rather, it has been the logical layer. The software, or operating system, that interprets data and orchestrates real-time, decision-making is complex. But non-traditional car manufacturers have asserted themselves. Google, Apple and Tesla aspire to dominate the car’s operating system the way that Android and iOS have done for mobile devices.

They have all made tremendous progress. Google’s sister-company, Waymo, has logged 3 million miles of autonomous driving. Tesla’s models S and X have Level 3 autonomy, which requires human intervention. But their newest model (expected to ship in 2019) will have Level 5 autonomy, requiring no human intervention.

With the initial testing complete for full autonomy, the final piece for market adoption are paying customers. This, too, is already here via the ride-sharing industry. What Lyft, Uber, Didi and Careem have created are massive rider networks that have the scale and trust to deploy AV technology. All the pieces are in place.

Autonomous driving’s arrival is imminent, and analysts predict 10 million autonomous vehicles will be on the roads by 2020.

Autonomous vehicle technology will have a devastating impact on countries that depend on oil exports. Yet, players in the GCC have a great opportunity to benefit from AV.

When autonomous driving vehicles arrive, they will be fully electric. Further decreasing oil demand. Stanford’s Rethink-X report estimates production will decrease by 30 percent and oil pricing will be as low as $25 by 2030.

But self-driving technology does not mean gloom for oil-producing states. Dubai, for instance, will be the first in the region to reap the rewards of autonomous vehicle technology.

Its newly constructed roadways with clear lane markers, flyovers and roundabouts are ideal for early and safe roll-outs of autonomous driving.

Dubai clearly understands the benefits of autonomous driving. Saeef Al Aleeli, CEO of Dubai Future Foundation said: “Studies show that a city the size of Dubai could provide all of its trips with 90 percent less cars, [using] a self-driving taxi fleet”. Not surprisingly, Dubai is committed to having 25 percent of its trips as driverless by 2030. The RTA has already completed testing of an autonomous driving shuttle bus in Business Bay, procured 200 Teslas for Expo 2020 and is dedicating driverless lanes for buses.

New service operators in the Middle East will prosper from autonomous technology. As car ownership moves towards Transportation as a Service (TaaS), ride-sharing networks will reap large rewards. For example, Careem could offer a subscription of miles per month for transportation the same way wireless companies offered minutes per month for calling.

Autonomous driving’s use of electric engines means increased demand for the generation, storage and transmission of electricity. Electric vehicles could need as much as 30 percent more electricity. New energy requirements in the region will create massive new opportunities.

The rise of autonomous driving is yet another trend reducing demand of the GCC’s key export. This change brings opportunities. New sectors of the economy will blossom. Cities will be more efficient, cleaner and more enjoyable places in which to live.

Much like the first automobile revolution in the early 1900s ushered in massive changes, so too will this second automobile revolution.

Alex Giannikoulis, General Partner at Graphene Ventures.

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