Five Changes To Transportation With The Potential To Upend Auto Glass
By Drew Vass
Imagine yourself a blacksmith, and a farrier, working in the early 20th century. For as long
as anyone can remember, your services—though a small part of society—have been in nonstop demand, as horses remain the dominant engine of transportation. Then, one day, a big invention rolls into town: the self-powered buggy. News of this precedes its arrival, labeling it expensive and impractical. And you’ve heard about the man from Michigan aspiring to mass-produce and make such vehicles commonplace, but word on the street is: “That will never happen.” But it does. In less than a decade, there are more than 250,000 Ford Model T’s rolling (not hoofing) around. And just like that—your once thriving business becomes a cottage industry.
Now, “The future of private car ownership will be relegated to hobbyists; not dissimilar to the horse,” says Robert Dillman, of Dillman Driving School in Saint Augustine, Fla. Long term, Dillman might be best served by aiming his business at consultation for the development of artificially-intelligent, self-driving vehicles.
At more than 100 years old, the auto industry has long been considered, “mature and stable,” states a February 2016 edition of U.S. Economic Watch, a publication of BBVA Research, a private firm that’s based in Spain. “But the opposite actually holds true,” the report adds, “as it remains a very dynamic industry ripe with disruptive technology and consolidation.”
Today, auto makers, insurance companies and countless other industries are revamping for those disruptions, says Michael Walton, Ph.D., with the Department of Civil, Architectural and Environmental Engineering at the University of Texas at Austin. They’re launching auto subscription services that make owning (and disowning) vehicles as simple as subscribing to apps. They’re eying ride-hailing and rideshare services such as
Uber and Lyft, which seek to increase their popularity by integrating with public transit and fleets of fully-autonomous vehicles. They’re also weighing the impacts of an exponential rise in online retailing and determining how to meet the shifting preferences of millennials,who find fewer and fewer reasons to get behind the wheel of a vehicle in order to get around.
And those are just some of the changes the industry faces.
“Automobile manufacturers are changing their models of vehicle ownership,” Walton says. “We don’t know whether individuals will even own automobiles in the future or not.”
And the fact is: Already, fewer people are doing just that, as well as driving less. We found numerous reports showing that the number of miles driven among U.S. citizens actually peaked sometime around 2005—even before the last economic recession—after which that number has continued to drop. And according to research provided by Michael Sivak, Ph.D., research professor at University of Michigan’s Transportation Research Institute, vehicle ownership rates also peaked sometime around 2006. Meanwhile, experts agree that this isn’t a temporary trend. As a result, 20 percent of U.S. cities are dialing back their future plans for road capacity and maintenance, according to a report published by National League of Cities’ Center for City Solutions and Applied Research. “We drive significantly less as a nation than we did 10 years ago, and that number is only likely to decline more,” the report suggests. At the same time, past research conducted by AGRR magazine shows that the single biggest factor driving the need for auto glass repair and replacement is miles driven. In other words, these developments hold the potential to seriously disrupt demand.
To be clear: This article isn’t meant to serve as a doomsday message, nor are we suggesting that auto glass shops will go the way of farriers. But, based on our research and the opinions we gathered from experts, below are five things every auto glass company should consider.
#1 Subscription-Based Auto Programs
Auto lease programs have existed for as long as any of us can remember, but who thought that they would ever reach as little as a month—or even a day—in length, while also including everything from tags, title and insurance, to maintenance, roadside assistance and wear and tear—including auto glass?
Starting in 2017, auto manufacturers began offering subscription-based programs that allow drivers to forego the commitments of private ownership, or multiyear leases, instead opting to “subscribe” to the latest vehicles, which they order up over websites and mobile apps. In the meantime, “subscribers” have but one thing to pay for outside of their monthly fees: fuel. Each plan has mileage limitations, but those restrictions are managed along the lines of data limits for cell phone plans (you pay for overages on a per-mile basis).
“I think that’s proof that it’s not just economically driven, but lifestyle driven,” says Daniel Levine, a trends expert, keynote speaker and director of the Avant-Guide Institute, a New York-based trends consultancy company.
We found a total of four programs introduced in 2017, starting with BOOK by Cadillac, in February, and Ford’s Canvas program in May. Volvo followed suit in November 2017 with Care, along with Porsche, which calls its program Passport. But in 2018, not only are more programs slated to be introduced by manufacturers, but independent companies are stretching the concept across brand lines.
Numerous media reports suggest that the initial success of Volvo’s program was so strong that the company couldn’t keep up. Representatives for Ford tell AGRR that subscribers to Canvas recorded three million miles in the first nine months, in the cities of San Francisco and Los Angeles alone. A representative for General Motors (Cadillac) tells AGRR that BOOK was first introduced in New York, but, due to the program’s immediate success, was quickly expanded to other cities. The same representative says that more than 8,000 individuals have expressed interest in Cadillac’s program since.
Meanwhile, folks are still driving those vehicles, which will no doubt need auto glass, but with repairs, maintenance and even insurance rolled into those programs, it won’t be the “subscribers” who arrange for those services. A representative for Ford tells AGRR that the Canvas program “partners with a certified glass repair provider for glass repair and replacement.” And while the company failed to clarify, we’re willing to bet that those services will happen at a Ford dealership. Similarly, a representative for GM says that, in most circumstances, it’s Cadillac that will be responsible for repairs and replacement.
#2 Millennials
So far as why changes like auto subscriptions are surfacing, “We’ve gone too far,” Daniel Sperling, professor of civil engineering and environmental science and policy at the University of California at Davis, told an audience at Massachusetts Institute for Technology. “We’ve created a transportation system made up of massive road systems and parking infrastructure that is incredibly expensive for travelers and for society to build and maintain. It is also very energy- and carbon-intensive, and disadvantages those unable to buy and drive cars.”
Never was the latter part of his statement truer than for millennials amid an economic recession, research suggests. Meanwhile, according to the report “Activity patterns, time use, and travel of millennials: a generation in transition?” published by the journal Transport Reviews in June 2016, millennials became the largest population segment in the United States in 2015. At the same time, “Compared to recent previous generations, they have been found to travel less, own fewer cars, have lower driver’s licensure rates, and use alternative modes more,” the report says.
And regardless of the fact that economic conditions have improved, “Millennials are not as enamored with cars as their parents were,” Levine says.
In other words, millennials are expected to have less need for auto glass repair and replacement than those before them.
#3 The Amazon Effect
But let’s face it, the concept of staying home more often and driving less is one that extends beyond millennials. And some of the best evidence for this can be found among statistics for online retailers. So far as how giants such as Amazon impact total miles driven, that’s a hard—if not impossible—statistic to pin down. But according to a report published by Local Government Commission, a Sacramento, California-based non-profit organization, companies like Amazon are cutting signifi cantly into trips to and from retail centers. Over the course of 2017, the report states there were thousands of retail store closings, including 100 among major retailers like J.C. Penney, RadioShack, Macy’s and Sears, which it directly attributes to the success of Amazon and other online retailers.
Forecasts published in May 2017 by Credit Suisse, a Swiss multinational investment bank and financial services company, predicts that as many as 25 percent of U.S. malls will close by the year 2022, leaving Americans with not only fewer reasons to drive, but fewer places to drive to. In August 2017, Amazon also acquired Whole Foods, which it now uses as local hubs for at-home deliveries of groceries, and it recently acquired online pharmacy provider PillPack.
#4 On-Demand Ride Services
Some experts and analysts suggest that as companies such as Amazon chip away at people’s needs to leave home, they’ll find fewer reasons for owning vehicles. For those occasions when they do venture out, already many are choosing to do so by ride services, like Uber or Lyft (which are now successful enough that their names are used as verbs). Statistics also show that more often, those who “Uber” are choosing to share those rides with complete strangers, in order to reduce costs (and miles driven per individual). In June 2018, an Uber spokesperson told The Atlantic magazine that, in San Francisco, 50 percent of rides are now shared.
In February 2016, Uber began partnering with transit agencies to integrate public transportation into its services. Lyft made similar moves, even going so far as injecting itself into city planning. In a public statement issued in April 2018, Uber’s CEO suggested that the company’s goal includes providing, “alternatives to personal car ownership, bringing together multiple modes of transportation right in our app.” Lyft co-founder and president John Zimmer was even more direct by telling Atlantic reporters, in June 2018, that his company would like to completely replace car ownership.
#5 Autonomous Vehicles
Every expert interviewed for this article agrees that the biggest changes to transportation will arrive via fully-autonomous vehicles (AVs)—partly due to how they interlace with and impact other mechanisms (like those above).
In the not-so-distant future, riders will hail these AVs from nearby stations via apps (like Uber and Lyft), while artificially-intelligent software minimizes the total mileage driven among shared routes. In a talk he gave at MIT in March 2018, Daniel Sperling, professor of civil engineering and environmental science and policy at the University of California at Davis, told students that the monetary cost for hailing autonomous ride services could be as little as 15 cents per mile, versus 60 cents per mile for privately owned vehicles traveling 15,000 miles per year. But the bigger impacts may come via reductions in car ownership.
A simulation conducted for the city of Lisbon, Portugal, utilizing a fleet of fewer than 26,000 “taxibots,” effectively replaced 203,000 vehicles. Even if those “taxibots” include glass, combined with reductions to miles driven, there could be monumental impacts to demand.
It isn’t all gloom and doom for auto glass companies, Levine says, so long as they learn to adjust their strategies. “I would say keep an eye—a close eye—on when autonomous vehicles are going to be a regular thing on our streets,” he says. “If you can catch that, there’s a lot of money to be made,” he says.
Until, that is, they introduce magnetically levitating trains, hyper loops and autonomous drone taxis that travel by air. And that’s no kidding.
Drew Vass is a contributing writer for AGRR magazine.
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