Self-driving cars revolution

Photo: Google Self-driving prototype with no steering wheel or pedal

Even ten years ago, self driving cars would have seen fanciful.  Now for most industry experts, the question is whether they are 5 or 10 years away.  BMW and Ford are promising fleets by 2021.  Google’s fleet of self driving cars, using advanced radar systems, have been logging in millions of miles on California roads for years.  A dozen or more competitors (some startups, other’s billion dollar firms like Ford and GM) have followed suit.  Most famous for its electric cars, Tesla already has an autopilot mode in which the onboard computer can recognize lanes and effectively drive the car on highways for you.

The impact on people’s life will be transformative.  Commutes will soon move from drudgery as cars become more like moveable lounges where passengers relax, watch movies, surf the web, work or sleep.  People may begin living further away from jobs.  For the youth without cars or the elderly too old to drive, self driving cars will mean independence and a new found ability to touch.  Public transportation like buses could be replaced fleets of minivans that pick and drop off passengers on routes constantly updated and optimized by computer algorithm, just as Uber pool and existing firms already are developing.  While it may take years of effort to increase their safety (especially in the early years where roads are populated by a mix of autonomous and driver controlled cars), is has the potential to save 30,000 plus lives lost per year in auto accidents.  Indeed, private auto insurance may also go away as accidents will be adjudicated among auto makers not passengers.

Automakers are excited, but also have two big reasons to be fearful.  First, what will set luxury cars apart where driving matters less – softer leather, bigger entertainment systems?  Cars may soon become commodities – movable couches that are hard to distinguish from each other.  Consumer will likely balk at paying significantly more for upmarket brands.  Second, why even own a car?  With self driving fleets, Uber or other companies may simply maintain fleets that you can order on command.  These big players will need far fewer cars and likely have a lot of bargaining power.

For labor markets, the productivity gains of autonomous vehicles are enormous.  But so is the potential to destroy jobs.  About 5 million people earn a living driving taxis, cars, vans, buses, delivery trucks.  If cars become something you use on demand, how many jobs in auto dealerships, parking lots and even gas stations will be lost.  With fewer accidents (and more electric vehicles), how many car body and repair shops or insurance agents will be needed?  One entity soon to become obsolete that people may not miss?  The DMV as who needs a license for a car you don’t own that drives itself!

Technology 3