Imagine the transportation future 20 years from now. Here’s one way things could roll on a weekday: Many of us get picked up at home by a sturdy, standardized, driverless car that will also scoop up a few of our neighbors who work at other businesses near ours.
Entering the highway, the vehicle automatically links to a platoon of similar self-driving cars headed in the same direction, and they all conform to a safe speed that maximizes energy efficiency.
But if we passengers look out the window, will we spot amid the many autonomous vehicle platoons a lone human driver powering along freely at the wheel of a bronze SUV or a flaming red Porsche?
Porsche, for its part, says yes.
It’s not that the German luxury automaker is rejecting the potential of driverless technology, or the digital connections that are transforming navigation, safety, mass transit, city planning, and a host of other arenas. In fact, Porsche is currently investing in digital technologies, and has a long-term plan for some autonomous driving features.
But Porsche, with its origins in auto racing in the 1930s and its later development of high-performance sports cars, is determined to hold out against the common assumption that vehicle ownership will largely fade out if efficient, low-cost transportation-as-a-service—similar to the scenario above—becomes commonplace.
“We still believe at Porsche that personal car ownership is going to play an important role in the future,’’ says Stephan Baral, a Silicon Valley-based leader at Porsche Digital, a global Porsche unit developing software-enhanced experiences for the car brand. Baral, one of Porsche Digital’s top two executives in the United States, also oversees its venture capital arm, which scouts for innovative mobility startups that could make for good strategic or financial investments.
Porsche’s long-term strategy is a balancing act: The company aims to preserve its luxury cachet while also making Porsche ownership a more inclusive club, through various new options that are accessible to a larger group of people. (More on those initiatives below.) By broadening its global constituency in these ways, the company may be better able to weather the cultural and technological shifts to come. For example: If transportation-as-a-service models someday deliver popular, affordable rides to the majority of people, and roadway infrastructure is redesigned for connected, coordinated, and autonomous vehicles, will governments still keep a lane open for the maverick solo driver in a Porsche 911 Carrera?
Regional governments are already taking a more active role in regulating traffic flow—spurred in part by transportation technology companies that hardly had such a result in mind. For example, the city of New York has imposed limits on the hours when ride-hailing cars can circulate in congested downtown neighborhoods as they wait to get a fare. Although these restrictions are aimed at companies such as Uber (NYSE: UBER) and Lyft (NASDAQ: LYFT), they also limit roadway access for individual car owners who drive for those businesses as contract workers.
Mobility companies such as trip planner app developers are also encouraging cities to mine the data they collect on factors such as trip volume and traffic timing, so the cities can better plan their infrastructure projects and transportation policies. And big companies such as Intel (NASDAQ: INTC) and Ford (NYSE: F) are creating cloud-based hubs capable of linking government agencies, connected cars, automakers, consumers, vehicle service providers, and other players, so they can coordinate for many purposes yet to be fully envisioned.
Baral says he expects that technology, including autonomous technology, will change the transportation system significantly. Porsche plans to adapt to those changes—while still keeping humans in the driver’s seat, he says.
Porsches don’t have self-driving capabilities yet, and there’s no timeline set to install them, the company says. But if and when Porsches do include autonomous driving options, Baral says they’ll be activated at the discretion of the driver, probably to carry out dull tasks like inching through the rush hour commute or driving up a parking garage ramp. When the road opens up ahead, the driver can always take over, he says.
“We think Porsche has always been, and will always be, about the driving experience,’’ he says. “There will always be a steering wheel.’’
If certain highways are someday reserved for platoons of autonomous cars, Porsche could equip its self-driving systems to detect the caravans and join the car up with one of them, Baral says. Drivers would switch on the self-driving module.
But what if autonomous cars eventually build up a traffic safety record far superior to the performance of human drivers? Could humans be excluded from driving in certain traffic regions? Baral isn’t losing sleep over such possibilities at this point. Bringing passenger cars up to that high level of safe autonomy still presents significant challenges, he says. “I’m quite convinced that it will take longer than people think,” he adds.
In the meantime, Porsche is trying to enlarge the league of Porsche loyalists, advocates of car ownership, and fans of the human driving experience. To do that, the company is augmenting its traditional purchase and car lease options with programs described as “flexible ownership.’’
Under the Porsche Passport program, a driver can jump behind the wheel of a Boxster sports car or Porsche SUV without paying $60,000 or more for a taste of Porsche ownership. Porsche Passport could be described as “ownership-as-a-service.’’
Under the initiative, launched in Atlanta and slated to spread to four other yet-unnamed cities in North America, drivers can pay a monthly subscription fee for continuous use of a Porsche—and they can swap the car for a different model at any time. At the top monthly rate of $3,000, subscribers can choose among 22 models. It’s like a Porsche wardrobe, with a convertible number for that weekend getaway, and sleek sedans for the opera’s opening night.
Porsche says the Passport program is drawing in a new demographic: 80 percent of subscribers have never before owned a Porsche. Some swap their cars as much as four times a month. Cars are delivered to the subscriber’s location of choice in the Atlanta area.
Still, there are less expensive ways to sample the Porsche driving experience. Through the Porsche Drive program, a two-seat Boxster convertible can be rented for $329 a day—the lowest end of the service’s price range. Before any high school seniors start spinning prom date fantasies, please note: Porsche renters have to be at least 27 years old, produce their passports, and pay a $2,500 security deposit.
Porsche has also created a peer-to-peer rental network, Porsche Host, which helps current owners loan out their cars via a mobile app. And the company is opening up public access to a performance track driving experience that is offered free to Porsche purchasers. Those buyers can choose to receive delivery of their cars at one of the two US Porsche Experience Centers, located in Atlanta and in Carson, CA, near Los Angeles. At the $100 million Atlanta center, new owners get to drive a Porsche on a racing track for 90 minutes, supervised by a professional driving coach. But anyone over 21 with a driver’s license can do that too, for a fee that depends on the Porsche model they choose to drive. For a standard Porsche 911, it’s $500.
The Atlanta center is the headquarters for Porsche Cars North America, the exclusive US importer of Boxster, 911, Cayman, Macan, Cayenne, and Panamera series Porsches. With its driving track, classic car gallery, and other amenities, the center draws visitors into the physical aspect of Porsche-world. But it’s also becoming a hub for the growing virtual side of the experience. Porsche Digital just opened its second US location there, to work on projects including the online customer portal My Porsche and a digital commerce unit that aims to buttress the Porsche reputation as a lifestyle brand.
Porsche owners use My Porsche to make service appointments for their vehicles, track safety updates, and manage the online connections of their cars. But Porsche is also inviting the public to set up their own personal accounts and tap into its digital sales platform, which already includes an online shop. There, Porsche fans can buy high-end goods such as leather driving gloves, sunglasses, beach towels, racing chronograph watches, and a Porsche-shaped computer mouse. Other offerings may include online banking and additional services not directly related to vehicles. The goal, Baral says, is to establish “daily relevance’’ for consumers in the Porsche orbit.
US drivers provide a rich testing ground for the development of new digital features. In 2018, Porsche sold 57,202 cars here, making up 22.3 percent of its global sales. The United States is Porsche’s second-largest market, exceeded only by China. The US Porsche owners’ group, Porsche Club of America, has more than 130,000 members, who display their vehicles at rallies and parades.
Porsche’s innovation strategies are aligned with those of parent company Volkswagen, whose shares trade on European stock exchanges. Volkswagen owns a group of 12 automakers, including Bentley, Bugatti, Lamborghini, and Audi—one of the frontrunners in the race to develop autonomous vehicles. Porsche isn’t saying whether it will eventually incorporate Audi’s self-driving systems into its cars, or tap another supplier.
New business possibilities could open up for Porsche at the point when its vehicles include self-driving capabilities, Baral says. Porsche Digital is looking at the uses people could make of their time in the car when they’re not driving, such as enjoying entertainment via virtual reality systems. “People spend hours in their cars today,’’ Baral says.
Porsche, founded in 1931, is trying to make the most of a legacy car brand that resonates with the aspirations of the early 20th Century: individualism, freedom, upward mobility, exclusivity, human artisanship, and an exhilarating physical experience on the road. At the same time, the company is exploring the profit potential of embracing the advantages of the digital era: mass scale, convenience, flexibility, social connectedness, virtual environments, and a greater inclusiveness.
Such new trends, while disruptive, can also lead to profits. But Porsche still isn’t ready to envision all vehicles being absorbed into company fleets.
“Airbnb disrupted the hospitality industry, but people still want to own houses,’’ Baral says.
Photo courtesy of Porsche