Retail And Autonomous Cars: A Marriage Made in Heaven?

There is a lot of discussion going on of how autonomous cars will change mobility, public transport, and cities in general. While some are hoping that traffic jams will be a thing of the past, or that parking spaces can be re-purposed, because autonomous cars will drive more and park less, other are not so optimistic. They believe that we will ride more and longer distance, because we don’t have to drive ourselves, leading to urban sprawl.

Where most are agreeing is that users will spend less on mobility. The annual costs for owning a car are on average 5,600 Euro in Europa, and almost 12,000 Dollars in the U.S. This includes fuel costs, service, insurance, and other fees and costs. With an average mileage this means we spend 70 cents per mile. Using an Uber brings that to 2 dollars per mile, the triple amount. Self-driving cars will bring that down to 25 cents per mile. Experts in general expect that we will spend 80 to 90 percent less on mobility.

The cost savings come mostly from saving on the drivers’ wages, which account of up to 50 percent of taxi fares. Autonomous cars are also driving more fuel efficient, which deduct another 10 to 20 percent. A higher utilization rate of those cars make amortizations better. And adding that robotaxis will me predominantly electric, fuel costs will be 75 percent lower, when comparing to internal combustion engine cars.

But there are industry experts such as Voyage-CEO Oliver Cameron, who expect that costs will sink 100 percent and thus users won’t pay anything for transportation anymore. Until now, this has been considered as unrealistic.

Now for the first time there is such a model being tested in  reality. Waymo and Walmart announced a partnership, which offers dedicated parking lanes for Waymo’s vehicles in front of Walmart stores. Waymo passengers in Chandler, a suburb of Phoenix who participate in the Early-Rider-program, can have their Waymos drive through those lanes and load their online-shopping in the van.

Especially interesting is the fact that Walmart is paying Waymo for this privilege to have the cars pass through those lanes. Walmart is spending bucks to a transportation service for bringing passengers to their stores.

Such a model is only the beginning. Movie centers, shopping malls, shopping streets, amusement parks, restaurants, event organizers, clinics and hospitals, pharmacies, or health insurance companies could shuttle passengers and patients with autonomous vehicles to their locations. Customers wouldn’t pay a dime, because the store owners could expect that customers will spend money in their stores, and thus pay for the service.

That also explains the surprising note by Waymo-CEO John Krafcik, who said that Waymo will make revenue, for the first time in its history. So far Waymo-sister Google has spent billions of dollars on developing self-driving cars. With different types of cars, stores and brands could distinguish themselves. Family vans could shuttle Walmart-customers, while luxury stores such as Hermés or Louis Vuitton pick up their customers with Jaguars.

Other positive effects could come from parking spaces that could be re-purposed. And there are a ton of parking spaces, as we have recently reported.

Negative effects coming with such a model could be the rise of the European “sales drive with buses selling heating blankets,” or the creation of a multi-class society, where privileged shoppers get access to premium taxis, and where shopping malls are regulation access to their malls through such cars.

Before we are coming to conclusions too early, we’d have to see how this Walmart-Waymo-model is performing in real life.

This article has also been published in German.