Entire industries are changing course with the introduction of disruptive technologies and business models, such as Airbnb for travel, Uber for transportation, Netflix for TV – and so many more.

It is clear that connected and automated vehicles are poised to cause the same kind of paradigm shift in the way we think about cars. While we wait for self-driving prototypes to become floor models, technology is already changing the way people approach transportation.

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According to Morgan Stanley, complete autonomous capability will arrive by 2022, followed by massive market penetration by 2026 and extinction of the cars that we know and love today 20 years after that. IHS Automotive predicts that there will be approximately 54 million self-driving cars in use globally by 2035, while ABI Research suggests that half of new vehicles shipped to North America by 2032 will have driverless, robotic capabilities.

The Next Chapter

Innovation has paved the way for new business models, thanks in part to the ideal mobility device: the smartphone. As smartphones become more and more ubiquitous, disruptive ideas are reshaping our lives. From your smartphone, you can hail an Uber, rent a Car2go, and find the nearest bike share station, all with up to the minute information about availability. Smartphones have the power to set users free from a confined transportation system.

It’s just a matter of time before disruptive business minds develop an app that provides users with all available options – a combination of all mobile-enabled travel options in the form of the cheapest/fastest/most efficient way to get to your destination. Fully automated vehicles – when they join the road – will just be one more option in your app.

Under such a system, predicts Timothy Papandreou, from Google Self-Driving Vehicle Project at X, the specific mode of transportation is beside the point. Customers don’t necessarily care who or what brings them to where they’re going, as long as it gets them there on their desired timetable. “We are aiming at mobility as a service,” he explains.

The question then becomes how public transit will fit into this paradigm. Obviously, the best case scenario is that public transportation agencies stay with the curve and build a solution that compliments the mobile revolution. What is certain, however, is that new mobility models are blurring the lines between public and private transport, and that governments thus far have been slow to react to change.

Bill Peduto, Mayor of Pittsburgh, summed up the situation during a discussion at the Age of Urban Tech conference in Montreal (in 2016) by saying that “the culture of government is risk averse, while the culture of entrepreneurs is to embrace new stuff.”

The Private Sector Surges Ahead

The private sector, meanwhile, has recognized the inevitability of technology in transportation and is investing accordingly: as of today, Daimler owns the car-sharing service Car2go, GM has invested heavily in ride-sharing provider Lyft, Avis Budget Group owns quick rental service Zipcar, BMW is working with Chinese tech giant Baidu on building driverless cars, and Uber has come full circle, investing in self-driving trucking company Otto. The automotive industry is partnering with and investing in the technology they see as the next step forward in their industry.