Study: “Passenger Economy” Will Create $7 Trillion Market by 2050

Emerging autonomous vehicle systems and smart city technologies will create a new “Passenger Economy” that will grow to $800 billion in 2035 and nearly $7 trillion by 2050, according to an analysis by Intel Corp. and Strategy Analytics Inc.

Peer-to-peer and ride-hailing services are creating a “generational sea change” in how consumers and businesses view transportation, the authors note. They predict such services and technologies will drive change across multiple industries, including a range of business-to-business and concierge services.

More than $3.7 trillion of the 2050 projection is expected to come from consumer uses of so-called mobility-as-a-service (MaaS) applications. These services allow travelers to schedule, combine and choose among several types of transportation (mass transit, car-sharing, ride-hailing) for a single trip via an integrated smartphone app.

Another $3 trillion in revenues is expected to come from business-related MaaS applications. These include package delivery and automated long-haul transportation.

The remaining $200 billion in 2050 will be generated by emerging concierge services facilitated by autonomous vehicles. The report groups hotel and hospitality, restaurant and dining, tourism, entertainment and healthcare services in this category.

The authors predict that at least 585,000 lives can be saved between 2035 and 2045 as the number of self-driving vehicles grows. Reductions in public safety costs related to traffic accidents could surpass $234 billion during the same period, the report estimates. Asia is projected to generate 47% of the $7 trillion total by 2050. The rest will be split by the Americas (29%) and Europe (24%).

Intel likens the implementation of self-driving vehicles to that of personal computers, the internet and smartphones in terms of social impact and creating new business opportunities. In addition to MaaS, the rise of the Passenger Economy will be driven by increased urbanization and mobile connectivity. Other factors will be stricter global regulations aimed at curbing traffic congestion and pollution and improving safety and public welfare.

The authors caution that driverless vehicles will require more advanced technology than is available today, coupled with a “significant paradigm shift” in consumer perception and behavior. They add that the necessary regulatory and infrastructure changes likely will take several generations rather than a few years.