Good driver discounts? Accident premium hikes? These are about to go extinct, along with a good portion of auto insurance profits. Because in just three years’ time, driverless cars are going to start hitting the roads and reshaping a host of industries — not to mention all of our lives.
But before we look at how, exactly, our lives will change, let’s explore a curious feature of this radical innovation: it’s coming primarily fromoutside the auto industry itself.
Two days ago, Tesla released autopilot software for its Model S cars that allows for hands- and feet-free driving in either stop-and-go traffic or highway speeds. It does not yet allow for fully-autonomous driving not because of any technical constraints — the tech is already there and ready to go — but simply because of regulatory and insurance concerns. Tesla said it plans to release its first fully-driverless car in three years.
Meanwhile, technology giants Google GOOGL +0.29% and Apple AAPL -8.11% are also furiously at work on their own autonomous vehicles. Reporting from last month’s Frankfurt International Motor Show, The New York Timesnoted that “Along with Google, Apple has focused the minds of auto executives on the challenge posed by new technologies that have the potential to disrupt traditional auto industry hierarchies.”
Think it can’t happen? Think again. It’s the tech companies, not automakers, who’ve been driving the rapid development of intelligent dashboards in recent years. Then there’s the fact that Google is worth five times more than any auto company on the planet. As for Apple, it’s worth a whopping eight times more than any car company, and it also has the proven technological and cultural capacity to utterly transform the auto industry just like it did the mobile phone and recorded music industries.
In contrast to this breakneck innovation by outsiders, the traditional auto industry itself seems largely stuck in a defensive crouch. What does it say about the auto industry’s attitude towards innovation that a premiere carmaker like Volkswagen was willing to bet its entire future on an emissions-control scheme just to save the $4 billion it would have cost to R&D a real solution to the emissions problem?

Whatever you think of Apple, Google, or Tesla and their various corporate missteps, can you imagine any of them ever behaving like this?
In the end, VW will now have to spend at least $40 billion to repair the flawed emissions systems in its cars, compensate customers for the fact that their cars have depreciated 25 percent overnight, and settle the tsunami of lawsuits soon to come crashing down upon their corporate headquarters in Wolfsburg, Germany.
That’s a 10-to-1 loss caused by the failure to innovate. And when you add to the VW scandal the lethal ignition switch fiasco at General Motors GM +0.00% and similar industry foot-dragging going back at least 40 years to the exploding gas tanks in Ford’s Pinto, it seems pretty clear that we’re looking at an industry not run by innovators.
This is not to say there is no innovation in the traditional auto industry. My Mercedes has some pretty amazing driver-assist and connectivity technology. And General Motors CEO Mary Barra has already announced plans to unveil a fully-autonomous electric Chevy Volt by this time next year — though only for employee use on its Warren Technical Center campus near Detroit.
But quick to spotlight the auto industry’s greatest flaw, the satirical magazine The Onion made this announcement: “General Motors announced plans Thursday to recall a fully autonomous car by 2021.”
So it’s outsiders like Apple, Google, and Tesla who are pioneering the road to an on-demand autonomous vehicle future that will totally disrupt not only the auto industry, but a dozen other industries as well — and all of our lives along with it.

Imagine the world five years from now, filled with driverless cars at your service as needed. What’s the biggest change we’ll see?
For one thing, they will start saving an astonishing 300,000 American lives every decade!
As The Atlantic magazine reported last month, researchers at McKinsey & Company “estimate that driverless cars could, by mid-century, reduce traffic fatalities by up to 90 percent. Which means that, using the number of fatalities in 2013 as a baseline, self-driving cars could save 29,447 lives a year. In the United States alone, that’s nearly 300,000 fatalities prevented over the course of a decade, and 1.5 million lives saved in a half-century.”
Moreover, once the technology spreads worldwide, where a total of 1.2 million people now die annually in car crashes, “driverless cars are poised to save 10 million lives per decade — and 50 million lives around the world in half a century,” added The Atlantic.
This fact, noted the magazine, makes autonomous vehicles one of “the most transformative public-health initiatives in human history — on a par with the efficacy of modern vaccines,” which have saved millions of lives all over the world.
It will also make them the most disruptive economic force multiplier in modern industrial history. Because once driverless on-demand vehicles are on the road in large numbers, look what will happen to other industries we interact with in our everyday lives:
• The auto insurance industry will be transformed or else wither and die as 90 percent of traffic accidents go away. Don’t forget, driverless vehicle software won’t get drunk, fall asleep at the wheel, or violate speed laws. And guess what — you’ll be able to legally text while driving!
• The hospital business will go into shock as millions fewer people are injured or killed on the roads. Emergency rooms will still treat cardiac cases and gunshot wounds, but with few accident victims to care for, ER’s will specialize in discrete care areas and become differentiated profit centers for major hospital chains.
• No more schlepping to airport car rental facilities and standing in line for an hour. Instead, on-demand rental cars will pick you up at the terminal and drop you back off again when you return to the airport, then drive themselves to their remote facilities.
• Urban planning will face its greatest challenge since the invention of high-rise apartment living as cities no longer need be designed around auto traffic and parking needs. Urban congestion will ease as cars move about only on demand.
• Municipalities will need to find new sources of revenue as their police forces are redeployed from traffic and ticketing duties to solving crime and catching crooks. Crime rates will decline dramatically.
• Gas stations will become fully-automated 24/7 operations where cars will fuel themselves when not in use by humans.
• Just in time delivery and transport services will become much more profitable without the cost of labor as a major factor. “How Am I Driving?” and “Drivers Wanted” signs will sell on eBay as collectors’ items.B
Where will the profits lie in this driverless future? In lots of places, as I’ll demonstrate.
My innovation-on-demand company, ipCreate, has mapped out the economic opportunity in just one small area of the autonomous vehicle future: on-demand tour guide services. We found there is little intellectual property in this area, and what little there is consists of patents held mostly by a wide array of individual inventors, with no clearly-dominant player among the top five patent holders (Uber, Frias, IBM, Microsoft, and Xerox).
In short, there is lots of white space for invention, and a wide-open opportunity for players to seize key chokepoints in the on-demand tour guide services market. Based on our proprietary analytics as well as some market research using Survey Monkey, we estimate on-demand tour guide services to be a $130 million to $300 million business in the near-term.
And that’s just the opportunity in one little segment of the driverless on-demand future! We have also identified over 100 other brand new businesses that will emerge in the driverless future — new businesses that the big auto companies may end up playing little or no role in.
So what are some other ways that our lives will change when autonomous vehicles start hitting the road in three to five years? Where will the best business opportunities lie?
Post your ideas in the comments section and hopefully we can get a “driverless futures” discussion going.