Big Tech is eyeing the travel industry again with autonomous vehicle push

Over the last couple of years it has been easy to predict that autonomous vehicles are coming, but hard to predict exactly when.

The impact was always expected to be significant - for example in January 2018 (now almost three years ago) I wrote that autonomous vehicles will reshuffle the travel industry.

I followed this up in June 2019 by asking if sightseeing buses be first to globally scale with autonomous vehicles?

So all the warning signs were there, but if you were a ground transportation company or a vehicle-based sightseeing company, were these predictions really actionable?

I argue that they were, but too easy to push down the priorities list in order to focus on more immediate concerns. Fleet electrification trumped fleet autonomy.

All previous technology changes only altered the means to retail a product, rather than the product itself, so it was understandable to believe that you could react to this change late - and catch up when necessary.

However, this is likely to turn out to be an incorrect and, now, fatal assumption.

Autonomous vehicles are here in 2020

Last week, Waymo (Alphabet/Google's autonomous vehicle division) went live with a public commercial service in Phoenix, U.S., with no safety drivers.

In the world of autonomous vehicles, this is level four - a significant milestone, as Reilly Brennan of Trucks Venture Capital put it: "This is likely one of the most important announcements around vehicle technology within this young century."

Previously, Waymo was testing the service with public riders, but there were limits.

There still are limits and it's still only one city, yet customers can now take the service without an NDA just like any other human-operated taxi.

This has resulted in a flurry of videos, including the one below that highlighted the ability of how a vehicle could handle complex manoeuvres. It's worth a look just to see how far the tech has come.

Here comes Big Tech

Autonomous vehicles would be a reasonable commercial challenge for the travel industry if these new vehicle platform owners were startups or incumbent vehicle companies (referred to as OEMs in their industry).

However, the new autonomous vehicle platform owners are a much tougher beast: they are today's Big Tech brands.

As previously noted, Google is in this sector. It is partnering with companies like manufacturers such as Volvo to assist delivering on its consumer-facing, ride-hailing ambitions.

Amazon is also joining in on the fun - it recently acquired Zoox in order to launch a ride-hailing product.

Apple, inevitably, doesn't want to be left out. There are ongoing rumours about an Apple-designed autonomous vehicle, but in the meantime, Didi, a company that Apple has invested $1 billion, outlined its intention to operate one million "robotaxis" by 2030.

E-commerce players in Asia are also pushing to win this next platform war. For example, web giant Baidu is already pushing ahead with robotaxi services in five Chinese cities and is now testing autonomous buses.

Beyond Big Tech, incumbent car companies (OEMs) are still investing heavily. Many of these vehicle companies are larger than any existing online travel agency, meaning the travel industry giants will be easily outgunned if it comes to a symmetric battle.

New possibilities

We can do so much with these new technical capabilities. As the vehicles are digitally controlled, we can program an autonomous vehicle and design new services around customer profiles that OTAs hold, tightly integrated with flight and hotel bookings, etc.

Here is a fairly simple list:

• In-destination mobility - e.g. taxi services.
• Airport transfers - a hotel can send a vehicle to pick up a customer and transfer them to their hotel, tracking the customer through the airport, ensuring minimal friction for the guest to find their ride.
• Shopping trips - customers can keep exploring offline retail outlets if they put their new purchases into a vehicle that would take it all back to a hotel.
• Connected trip - go to a restaurant, theater, late-night bar, with the vehicle transferring customers between venues in a frictionless way.
• Vehicle-based sightseeing - visitors do not need bus tours if they can take a robotaxi on a personalised route, which starts when they want, at a lower price than a commercial sightseeing experience.

What now?

There is a lot of travel industry murmuring about Google's dominance at the top of the funnel, or to a lesser extent Apple's device dominance.

But imagine for a moment what it will be like when today's Big Tech is no longer important within the retail distribution funnel but also key on the delivery side of a product.

The only real question outstanding is to ask if the OTAs and others are so distracted by the COVID-19 pandemic that they don't have any energy left to react to this new concern, or can they muster an effort to get involved with this new world, ensuring that Big Tech doesn't have it all its own way?

If the OTAs don't get involved now, I predict tourist ground transportation and vehicle-based sightseeing will be handed over to Big Tech and it won't ever come back to the OTA's collective sphere of influence.