- Daniel Roland/Stringer/Getty Images
GM’s CEO, Mary Barra, thinks your car could soon turn into a “second office.”
With autonomous cars on the horizon, she has made huge moves to bring the company into the future. In the past year alone under Barra’s leadership, the auto giant acquired Cruise Automation, invested $500 million in the ride-hailing company Lyft, and launched GM’s first long-range, all-electric vehicle, dubbed the Bolt.
That’s just the beginning of the changes consumers will see as self-driving technology develops. Barra describes a world in which getting to your destination will turn into leisure time.
“Whether it’s a second office or entertainment, I think there is a lot of new opportunities when you have that person in the vehicle,” Barra told Business Insider.
We recently had the chance to speak with Barra about what a self-driving future would look like and how GM was planning for it. The interview has been edited for length and clarity.
GM’s plan for rolling out self-driving cars
GM’s first self-driving car for public use will be the all-electric Bolt, which will be available to the public in a shared setting on the Lyft network, Barra said.
“When we step back and look at this broadly, we see it all fits together: electric, autonomous, and sharing. People still need to get from point A to point B, and we believe autonomous will be a big part of it,” Barra said. “We will start from a shared perspective and expand from there. But I think we are a ways from walking into a dealership and walking out with an autonomous car.”
Unlike some other companies developing the autonomous vehicles, GM has not yet shared a date as to when it plans to roll out its first pilot program for self-driving cars. But that doesn’t mean that the company isn’t aggressively planning for it.
The company is testing 40 autonomous Bolts on the streets of San Francisco and Scottsdale, Arizona, and investing heavily in developing its technology.
- Cruise Automation
“We are testing and we are moving very quickly,” Barra said. “We are very much committed to autonomous and doing it safely and we are aggressively developing the technology, but we will put it out for the consumer when it meets all of our requirements.”
The competition’s pilot programs
Uber rolled out a pilot program for its self-driving cars in September in Pittsburgh, Volvo plans to launch cars with autonomous tech in 2017, and Ford aims to have its level-four autonomous vehicles on the road in a pilot setting by 2021.
But these come with some caveats.
For example, Uber’s cars have test drivers, and Ford’s will operate only in certain geographical locations in certain weather conditions.
“I think there are a lot of claims being made because it’s a new space, and I think when you look at a lot of them they are in controlled environments and have safety drivers,” Barra said.
She added that other companies in this space were credible but that for GM the focus was on getting the tech right before rolling it out to the public.
“The technology is going to be ready when the technology is going to be ready,” she said. “And that’s what we are focused on. We are putting all of our energy into getting the technology ready and getting it right, getting it into vehicles, and demonstrating it.”
What GM is doing differently
A big part of getting the technology ready is making sure that the car is capable of safely operating in all kinds of situations. To do this, car companies drive their autonomous vehicles thousands of miles collecting data to help them learn how to operate in certain conditions.
- Business Insider
Many automakers and tech companies developing autonomous vehicles highlight how many miles their self-driving cars have driven, but Barra said GM was focused on more than just collecting miles to improve the safety of its cars.
“A lot of the conversation has been about, ‘Oh, we have this many miles,’ but it’s not as much about the miles as it is about the experiences that the car learns,” she said.
“I can go to the middle of Montana and rack up a lot of miles on open straight flat roads with no traffic. But one of the reasons we are in downtown San Francisco is because there’s not many other places that are as dynamic, dense, and congested so that we can make sure that the car has in its solution set all the different experiences … and can handle almost an infinite number of situations. So that is what we are focused on.”
The biggest impacts of autonomous cars
Autonomous vehicles will bring about huge changes when it comes to safety, congestion, and how we spend our time, Barra said.
In 2015 alone, there were more than 34,000 traffic fatalities. But self-driving cars can “dramatically take that number down” because they take human error out of the equation, Barra said.
Barra said autonomous vehicles would also have the potential to greatly reduce traffic in urban areas because they were always connected and sensing their environment, helping them to choose the most efficient route.
- Business Insider
With less congestion and no need to drive, people will also ultimately have more free time.
“I think from an individual perspective what you get back is time,” Barra said. “Time is almost a currency for many people, and so we will be giving back that time and a new experience. So we are not only working on the technology, but we are also working on the experience in the vehicle.”
Autonomous cars will also open up new opportunities for people who depend on drivers, like the elderly or young children, to be able to travel on their own, Barra said.
How the car-riding experience will change
The experience in self-driving cars will be tailored to meet the needs of customers, meaning there will be a more personal travel experience, Barra said.
“It will be very customer-focused and customer-driven. It will be about what they want to do in the vehicle,” Barra said.
Barra said new services would eventually be offered in its autonomous vehicles that would open up new means of revenue for GM.
The biggest way autonomous cars will change the business model for GM
Barra said she saw autonomous vehicles as a new way for the GM to add to its business model and not take away from it.
This is because the company plans to roll out its autonomous vehicles first in heavily populated cities, which is currently not a strong market for GM.
- Business Insider
“Our strength is not necessarily in the dense urban environments like in New York or San Francisco or LA, so we see this as an additive opportunity for our business because the strength of our core business, specifically in the US, is in trucks and SUVs. And that is the area that we believe will be impacted last by autonomous because of use case and because of needs,” she said.
Owning a car in a big city like New York means high parking prices, driving in heavy traffic, and high insurance premiums. These factors keep a lot of people away from buying a car in urban areas. But many people in these major cities still use ride-sharing services like Lyft and Uber because they are convenient. Self-driving cars will only improve upon this ride-sharing experience and benefit GM, Barra said.
“Today, it’s done with ride-sharing 1.0. But when we get to autonomous, you take a lot of those pain points and you do it more efficiently and more safely,” Barra said. “So we think the adoption will be in these dense urban areas and that it will complement our current business nicely. It will be additive, and we can grow from these shared of miles.”
Where GM will be in 30 years
Personal car ownership is not going to die quickly because of self-driving cars, Barra said.
“I think we are a long way out from that,” she said. “I think traditional ownership model will dominate for quite sometime, and it will be driven by rational customers making decisions about what’s best for them. If you look more broadly than the United States, there are still whole markets that are emerging where you people are still looking for that freedom that mobility gives them and the ownership.”
Barra said there would be some cases, though, in which certain developing cities skip over personal car ownership and jump to other solutions, like autonomous cars.
“But I still think there will be a tremendous market for the traditional owner driver model for a very long time and it will be driven by the consumer,” Barra said. “But I have a very hard time saying what it will look like in five years, much less 30 beyond that.”
It remains to be seen how self-driving cars will affect automotive production
Some predict the demand for vehicles will decrease because people will give up their vehicles in favor of autonomous taxis. Others speculate that the demand for vehicles will go up because there will be a need for more autonomous cars on the road. Either way, GM sees opportunity.
- Rebecca Cook/Reuters
Today, personally owned cars are used only 6% of the time. But because autonomous cars will be used in a ride-sharing setting, they will be used more frequently, thus meaning a higher turnover rate, Barra said.
What’s more, as automotive technology continues to evolve, Barra said people would most likely want to upgrade their vehicles more frequently.
“I see a different model than today’s model, but one where, even if there are fewer vehicles, their life cycle is less, or the way they are serviced provides a different business,” she said.
“The nature may change, but I think there’s still a very strong business fundamental,” Barra said.
Barra added that one of the reasons GM was being so aggressive in developing the technology and getting it into the marketplace was that it saw driverless vehicles as creating new business models on top of its core model of producing cars.
The biggest transformation Barra sees in the industry
“I think it’s pretty big,” Barra said. “I’m on the record as saying we are in the midst of seeing more change in the next five years than we’ve seen in the last 50 years. I haven’t thought about it as the most significant, but I would say it’s right up there when you look at how dramatically people will move because there have been a lot of evolutionary improvements.”
No evolution happens overnight, but Barra said cars were changing more quickly than ever before thanks to new technology.
“If you go back and sit in a vehicle that was manufactured, say seven or eight years ago, and then get in a vehicle that is rolling off our assembly line right now, they are more capable from a safety perspective, from a connectivity perspective, from a fuel-efficiency perspective,” she said. “I mean, every single aspect of the vehicle is an order of magnitude better. And I think for the last couple of decades, it has been evolving.”
GM plans to dominate
“It’s very exciting for me personally,” Barra said. “I have been at the company for 36 years, and I know the deep technical talent that is across this company, so enabling this talent and empowering them to be able to lead this transformation is something that excites me every day. It’s the power of the men and women at General Motors and their capability to redefine how people get from point A to point B. That is exciting to me, that we are in a position to lead.”