What does a $7 trillion passenger economy really mean?

A recent Intel report claims that the passenger economy created by the introduction of driverless cars will reach $7 trillion by 2050. Experts weigh in on what it means for the business market.

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The promise of a self-driving future--which is fast approaching, with many automakers claiming to have some sort of autonomous vehicle on the market by 2020--clearly translates into a major shift for the auto industry and a rethinking of mobility. But the self-driving industry is about more than just cars: It's about all of the tech and connectivity that comes along with massive robots on wheels.

According to a recent report from Intel and Strategy Analytics, there's a price tag on the economic gains reaped by what it dubs the new "passenger economy"--to the tune of $7 trillion dollars.

Intel, clearly, has its own skin in the game. The chip-making giant is well-positioned to benefit from the new driverless auto industry, since so much of it depends on storing and synthesizing massive amounts of data collected by these cars. Intel makes the chips, the data centers, and the processors in many of the vehicles.

"We're in the early stages of cars generating data," said Michael Ramsey, autonomous vehicle analyst at Gartner Research. "Data has to go somewhere, has to be processed. As the car becomes more of a computer, and starts generating more data, Intel sees a big spot for itself and will certainly be a big player." Other companies like Nvidia, said Ramsey, and the carmakers themselves, also have an opportunity here to capitalize on this huge influx of data processing needs.

But beyond data processing, the Intel report hits on a plethora of other areas that will reap financial rewards from the passenger economy created by driverless cars. This new shift in transportation encompasses everything, said Ramsey, "from the cost of the vehicles to the data centers to all the revenue from using a mobility service to the aftermarket."

Peter Cahill, CEO of Voysis, a customizable voice AI platform, sees this moment as the perfect time for carmakers to use tech to improve the experience for passengers.

"There's a huge opportunity for auto manufacturers who survive the autonomous vehicle revolution to build and own new relationships with their customers by providing experiences that are driven by software," said Cahill. "Similar to its role in the smart home of today, voice will be the primary interface for these future 'cars.'"

It's crucial that auto manufacturers own this new voice-enabled relationship with their customers, rather than defer to Google, Apple and Amazon, said Cahill. "Otherwise, they simply become commodity players," he added.

Ramsey agreed. The big chip makers will "dominate silicon," Ramsey said, because of how difficult it is to develop the plants. But the new passenger economy, he said he believes, presents a "big opportunity for startups--in software, especially."

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Still, said Ramsey, it's hard to really understand what is meant by a number like 7 trillion. "It's like saying 'what's the market for food?'" said Ramsey. "It's so big--whenever I see numbers like that I'm like, 'Okay, what does that even mean?'"

Even if you total all the annual revenues from the automakers, said Ramsey, you don't get a number even close to 1 trillion. Essentially, he said, it comes mostly from the "mobility" market--Ford puts this close to $5 trillion. If you go in that direction and work from there, he said, "it's not hard to get a huge number."

Image: Jasper Juinen, Bloomberg via Getty Images

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