I am not convinced that the winner will be Google, nor can I can choose between the existing car manufacturers. If you were to attempt to invest in self-driving cars as a phenomenon, what would you invest in? What is a proxy investment for the public investor?
Below are a few of my investment ideas, although I’m afraid all are subject to many other forces beyond self-driving cars. I’d love to hear your ideas in the comments below or via email– what is the purest proxy for self-driving cars?
Suburban housing… self-driving cars will mean less time spent driving and parking, meaning living further away from urban centers will be more tolerable. Expect suburban property values at medium distances from major cities to increase in value.
Entertainment companies… driving commuters will now have hours of newly free time in their week. This time will need to be filled with images, sounds and text.
Unemployment… professional drivers (taxis, delivery folks, garbage collectors, etc.) will be out of a job. Optimistically, invest in retraining programs. Pessimistically, invest in inferior goods, and more pessimistically, riot gear.
E-commerce companies… as if there weren’t already reason enough to be long on e-commerce, self-driving cars will reduce shipping costs and time qualitatively. A whole new class of e-comerce companies will be built. I think of Russia’s e-commerce companies.
Oil companies…. a combination of more efficient routing and driving, along with mission-specialized vehicles will reduce the need for fossil fuels. Electric self-driving cars can also smartly recharge on off hours or be swapped.
Motels, rest stops, off highway restaurants…the car will be its own self-contained entertainment pod and the only stops along the way will be intentional.
Parking lots… increased car utilization and a decreased need for strategically local parking lots (just let the car circle the block if you don’t want to loan it out– or park a few miles away) will reduce the market for paying parking premiums.
Insurance companies… in the short term self-driving cars will be a boon for insurance companies as accidents will decrease along with payouts. In the long term, the consumer and regulation will catch up and car insurance will no longer be necessary or required.
[Footnote: As a former Apple fanboy– I can’t help but note that an iCar would play to all of Apple’s strengths: existing large crowded market, bificurated luxury sector, rewards deep technology innovation (battery, AI), while ultimately being about the user experience. Not to mention Apple is one of the few companies that will have a great map asset in 5 years. But enough on that.]