Only Google Can Beat Uber

For the better part of the last century, the motor car has dominated the personal transportation business. Over the same period, customers got a mind blowing plethora of choices to buy from. More than this, some of the finest design and engineering minds had worked tirelessly on making the motorcar safer, cooler and more efficient. Someone like Volvo decided eight decades ago that they would dedicate themselves completely to safety as a defining philosophy.

Yet accidents and inefficiencies continue. And a badly driven Porsche doesn’t look very cool I assure you. So do we need to look for the warts elsewhere. Unfortunately, the species building the car also drives it. And so the most inefficient, dangerous element of a moving motor car has not been worked on as yet. No marks for guessing which that is. How do we take care of that.

The idea of the driverless car has been around for a while. I have seen simulations created by Volvo. But Google is the one working on a software for the driverless car. Which means that potentially any human driven vehicle can be converted into a driverless car.

Why is Google best positioned to drive this project? Two important influences. One is the ability to generate realtime data on road traffic almost anywhere in the world. So a car can decide what routes are most efficient. And because it is realtime it will always be relative to the last car that left its parking. Second, high quality artificial intelligence will enable both safety and efficiency relative to other movements on the road. Of humans, other vehicles and surface conditions.

So the big question is what happens to businesses that are defined by the presence of a driver. Okay, the auto giants will rush to manufacture driverless cars. But what about an Uber, Ola or a Lyft. By the way, Google has a minority stake in Uber. This can only go two ways. Either Google will take a controlling interest and make it a driverless service or render the idea of “Everyone’s personal driver” irrelevant.

This might take a while to happen. This might be stalled by large vested interests. This may never happen. Not a big deal. But the big lesson is how we can get blindsided or turfed in for a long time, based on a comfortable and hence easily exploitable habit.

As more and more firms developed the ability to decide on IT product requirements, the box became almost generic. IBM’s decision to sell the product business to Lenovo was at least partly based on the need to break the deeply ingrained box selling habit. Customers were now asking the more difficult questions about connecting IT investments to business efficiencies. And IBM morphed into a consulting and services company. One resembling an Accenture much more than an HP.

We saw what happened to Kodak. And to Nokia. The mighty Microsoft is struggling with existential issues under the siege of a variety of start-ups who are already delivering a large number of front-end functionalities.

As ironical as it may sound, markets change much faster than corporate habits. As much as we are very quickly dissatisfied as customers, we are not as easily inclined to respond to the same change as suppliers. Once on a flight, a manufacturer of components cribbed relentlessly about what Chinese imports were doing to his business. And how the government was letting them die. After he had finished ranting I asked him where he buys toys for his children from each time there is a birthday party invitation. To his credit, he got it quite quickly.

It’s a human thing which is more acute in some economies and societies than others. We tend to be far more demanding than giving. Enduring firms should watch out for the real danger of turning into creatures of comfort. It’s the beginning of the end.

(This story was published in BW | Businessworld Issue Dated 25-01-2016)