Announcement of Service Closure

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Self-driving cars: how we are reimagining mobility

My two-and-a-half-year-old son is absolutely crazy about the animated film “Cars”, a Pixar production released by Disney (NYSE: DIS). Centred around a racing car that is ordered to leave town, he makes friends in an obscure and dilapidated town – the fictional Radiator Springs – which used to be one of many popular stopovers along the legendary US Route 66. But when the more direct Interstate 40 highway bypassed the town, it fell into disrepair.


Disruption and technology

Although admittedly a cartoon, it represents an apt allegory for us from which to learn from; namely the disruption that can be caused when society discovers a more efficient way of doing things. One such technological advancement which we should all be aware of is the nascent development of autonomous vehicles (AVs), or more commonly known as self-driving cars.

Estimates vary but most experts predict that a “fully automated driving system” will be completed sometime in the mid- to late-2020s. So for the moment, developers are focusing more on the shorter-term benefits that AVs can deliver; prevention of traffic accidents caused by elderly drivers, cutting the time we’re banging our heads on the steering wheel stuck in traffic and reducing the overall burden on drivers.

Yet a fully-autonomous car in the decades to come will go much further and will completely change the way we humans interact with cars.


Using, not owning

The most obvious change when fully-autonomous cars arrive is that the number of actual car owners will come down. Why? Because when the cost of a robotaxi falls, the incentive to drive your own car rather than use a driverless taxi will be diminished. It’s reckoned that around 70% of the cost of taxi operations come from labour.

Unlike human drivers, robotaxis don’t get tired and can operate for nearly 24 hours a day (except for obvious maintenance and refueling needs). Deploying Artificial Intelligence (AI) to map out the most efficient routes is a no-brainer for these robotaxi operators.

I mean, think about how much a car is actually used per day; 30 minutes, maybe an hour max? The rest of that time – 23 hours – it sits idle. Parked. Not doing anything. In that sense, for both costs and the impact on the environment, using a car instead of owning one will become the norm.


Location, location, location

The age-old motto of property. But it can also be applied just as easily to parking lots – those gargantuan eyesores that can be found throughout nearly all our cities. They obviously need to be near our homes, offices and shopping centres. What if car ownership rates dramatically fall off though? Then it’s nearly certain urban parking lots will go too. There would be no point using prime real estate in the centre of our cities to serve as the refueling and maintenance outposts for robotaxis.

Take Japan as a case in point. There are just over 200,000 parking lots in the country today. Imagine the efficient use of space that could be turned into in terms of apartments, shopping malls and offices!


Big Autos to become sub-contractors?

Alright, so people won’t buy cars in the future. So what? Well, for investors in auto manufacturers that may be of some concern. If ride-sharing operators such as Grab and Uber are the only ones buying cars, then the total number sold is set to fall drastically.

Understandably, instead of succumbing to the inevitable the automobile industry is trying to reinvent itself. We can already see this in action. Back in 2016, General Motors (NYSE: GM) invested US$500 million in Uber’s ride-sharing rival Lyft in order to develop self-driving cars. And Japanese giant Toyota Motor Corp. (TSE: 7203) has partnered with Uber while the auto firm has also separately invested ¥7.5 billion in Japan Taxi – a taxi-hailing app.

There is no doubt in many peoples’ minds that the automobile industry will change fundamentally over the next few decades. Yes, the major autos are now investing in autonomous driving technology but will they actually benefit? This isn’t a question that many investors are asking and it’s one that auto companies aren’t providing convincing answers to just yet.

It’s something we should all watch out for though. Just like the nostalgic residents of Radiator Springs who were looking to “get their kicks on Route 66”, the future can easily pass you by.


by Michihiro Soma 4 Aug 2018

Announcement of Service Closure

Thank you for using the FIGS service since our launch. Regrettably, we have to announce that
we will be discontinuing our service as of the 14th of December 2018 due to certain constraints.
Please note that the during this period, the information shown on the FIGS platform is not up-to-date.