— Posted in News
If They Try It, They’ll Like It: How Ridesharing, Autonomous Cars Will Win Over the Public
Five years ago, when she was still an insurance broker with Marsh, Kate Sampson called insurance underwriters at American International Group (AIG) and other insurers with a new concept.
“I’m working with this company and this is what they’re going to do. They’re going to be the first in peer‑to‑peer ridesharing and everyone will have an app and you can share a ride with a stranger,” she told the underwriters.
AIG did not dismiss the idea but a number of insurers said, “So, hitchhiking? You’re going to just do hitchhiking?”
After almost 20 years in commercial insurance including time spent arranging protection for the ridesharing firm Lyft and other sharing economy pioneers, Sampson joined Lyft in 2014. She is vice president of Risk Solutions for the company, which recently formed a partnership with autonomous tech company Aptiv to develop autonomous vehicles for its ride-hailers. At the recent Consumer Electronics Show (CES) in Las Vegas, Lyft and Aptiv had a fleet of semi-autonomous BMWs to shuttle CES attendees around the city.
At CES, Sampson participated on a panel with executives from AIG and a professor involved in an AIG-sponsored study on consumer views and expectations around autonomous vehicles, future mobility and liability issues. The AIG survey in one of its findings identified consumer uncertainty as an obstacle to speedy adoption of autonomous vehicles.
For those concerned about the apparent reluctance of consumers to embrace autonomous vehicles, Sampson drew a lesson from her “hitchhiking” days. “We’ve spent our whole lives being told not to get in the car with a stranger, and then, we launched Lyft, and we’re like, ‘Hey, here’s a pink mustache, and fist bump, and jump in the car with a stranger,’” she said.
Sampson said Lyft knew back in 2011 that it had to change consumer behavior if it was going to succeed. “We had to wipe out, ‘Don’t get in the car with a stranger’ and get you to getting in the car with a stranger,” she said.
“It worked, I think we all agree. I used to say, ‘Raise your hand if you’ve been in a Lyft or an Uber?’ and now, every hand goes up in the room.”
Within a short time, Lyft tested people’s trust even further by offering a service where users of its app would not only get in a car driven by a stranger but also share their ride with another passenger, another complete stranger. The service is called Lyft Line.
“Now, not only are you going to get in the car with a stranger, but you’re going to get in the car with another stranger who’s also going the same way as you, and everyone said, ‘Now, that’s just crazy.’”
The Aptiv-Lyft vehicle with autonomous technology drives on the strip in Las Vegas, Nevada. (Photo by John F. Martin for Aptiv)
Within months, 50 percent of the rides in San Francisco were Lyft Line rides, according to Sampson.
Given Lyft’s partnership with Aptiv to get into car manufacturing, Sampson is understandably upbeat about the future of both ridesharing and autonomous technology.
“I tend to think that the adoption of this technology is going to be much quicker by consumers than we think. I think there is some hesitation, but, when I think about getting in the car with a stranger or getting in the car with technology that is being advanced over all this time by some of the greatest thinkers in the world, I’m pretty bullish on it,” she said.
The AIG report — AIG: The Future of Mobility and Shifting Risk — surveyed driver-age people in the United States, the United Kingdom and Singapore. The surveys reveal an underlying lack of consumer trust in self-driving vehicles. While virtually all think that these cars are going to be safer and will make driving less stressful, only 42 percent of adults in the U.S. said they would be comfortable sharing the road with driverless vehicles, while about the same percentage said they would not be comfortable.
According to Gaurav Garg, CEO for Personal Insurance for AIG, consumers are confused about the technology and question whether these vehicles can “anticipate the millions and millions of scenarios” such as identifying a stationary object versus a pedestrian, a bike instead of a car, a pet running across the street, or knowing what a 4‑way stop means.
“That creates a big hurdle to surmount for any innovation or any progress to be made in this area,” Garg said.
Even assuming that technology is flawless, Garg believes proponents still face a “trust gap” with consumers that needs to be overcome before they will fully embrace driverless technology.
AIG believes that consumers will have a say in how fast autonomous vehicles penetrate the market. But Sampson and others in the tech industry think that consumers, as they have with other technologies, will be won over more quickly than they think.
Sampson equated her experience with an autonomous car with when she first traded in her Blackberry for an iPhone. “I’ve been around for a while in the insurance business. I had a Blackberry for a long, long time. Then, finally, I got an iPhone, and I just thought, ‘Oh, I’m going to miss the keypad. I’m going to not like this,’ and within an hour, I thought, ‘Why did I not get into this iPhone game before?’ I think that we will get in these cars, experience it, and stay with it for a long time.”
Sampson noted that while AIG survey respondents think a majority of cars on the road won’t be autonomous for another 35 years, in 2051, Lyft is focused on getting a majority of its rides autonomous by 2021.
“There’s a huge gap in what the report and what consumers are thinking to what some of the companies are working toward,” she said.
She sees autonomy becoming the norm. “I think it’s just going to be so much safer that I envision a time down the road where if someone takes out their car keys, you’ll kind of look at them and say, ‘You still drive? Aren’t you using an autonomous car?’ because so many of the accidents are going to be caused by human drivers, not by the robot cars.”
The AIG survey also found U.S. drivers believe a high cost for the new vehicles and people’s enjoyment of driving will slow the transition to a driverless future. The “experts” and consumers diverge here. too. Consumers expect that they will largely own the driverless cars in which they travel, whereas some car manufacturers, in addition to ridesharing firms like Uber and Lyft, are betting many consumers will welcome not owning them and instead will use cars that are part of autonomous fleets.
“If the cars are deployed on a fleet basis, rather than an individual ownership basis, I think that particular concern about cost is going to fade a little bit into the background,” said Robert Peterson, one the report’s researchers, and a professor of Insurance and Regulation at Santa Clara University School of Law.
Sampson compared the situation to adoption of cell phones and how some people still maintain a landline phone. “We really don’t use it, it just accepts cold calls and political calls but we like having it,” she said.
But unlike a phone line, a car is a major expense; it can cost up to $9,000 a year to own one.
“If that [landline] cost you $9,000 a year to keep, you’d get rid of it in a second and you’d use an alternative. I think that’s what we’re looking at when we talk about the transition to the various forms of ridesharing that will occur with autonomous technology or semi‑autonomous technology,” she said.
She said Lyft is seeing more and more uses for ridesharing such as non‑emergency medical rides for folks who want to get to their dialysis appointments or their check‑ups.
“I think we’re going to still see adoption of ridesharing and elimination of car ownership. Maybe you go from three cars to two cars, or two cars to one car, through this transitional period, but it’ll start to be more and more obvious to consumers that this is the future as those things start to emerge,” she said.
Peterson agreed the change will come faster than the public now thinks.
“I agree with, I think, everybody here, that the public perception is probably not correct, that these cars are going to be on the road and in substantial numbers, particularly in urban areas, where the value proposition is pretty obvious, very quickly,” the Santa Clara professor said.
“I think we are, as humans, neophobes. That’s part of how we stay alive is we are a little bit fearful of new things until we establish that they are at least harmless to us, and then if they’re useful, we will adopt them,” he added.
Patterson offered a personal experience to buttress his case. “I rode in a Google Car a number of years ago. We went out on 101 and 280. I was nervous when I first sat in the car, but probably within five minutes, I was relaxed, and I was chatting with the person who was in charge of driving the car. It took no more time than that for me to sit back and say, ‘I like this.’”
Peterson also extrapolated that even if fleets do not represent a high percentage of all vehicles, say only five percent, the effect on the car market could be considerable because each fleet vehicle replaces six vehicles.
“Those are cars that either aren’t going to be bought, or they’re going to be retired, or they’re going to sit in their driveway. You really have 30‑percent penetration ‑‑ five percent times replacing six cars. It can happen very, very fast, without deploying cars one‑for‑one, or even close to one‑for‑one,” he said.
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- Ride-Hail Firm Lyft Enters Race to Manufacture Autonomous Cars