5.6 trillion dollars – that’s how much could be contributed in annual savings to the global economy by autonomous cars, according to a recent Morgan Stanley report. Hidden in the text of a chart in the report is an inconspicuous but bold prediction: 100% autonomous vehicle penetration and a utopian society within two decades. Whether or not this speculation is, well, speculative, it is worth considering the implications of driverless cars beyond the obvious practical benefits. Self-driving cars are no longer science fiction. The technology is here. Already, Google’s driverless cars have travelled over a million miles in autonomous mode, without any accidents. Bar the 14 caused by human error.
The future of mobility centres around two profoundly different visions, according to Deloitte University Press. Major players in the auto industry would have you believe that the design of cars will evolve incrementally as each new generation of vehicles adds autonomous drive features; a vision that sees motorists – and automakers – in the driving seat for the foreseeable future. They argue that the overall structure of the current transport ecosystem will remain intact, while progression will be orderly and linear.
In contrast, the radical ‘disrupter’ vision foresees a tipping point, after which the shift towards autonomous vehicles will accelerate rapidly as motorists and public transport users move towards ‘robotaxi’ services en masse.
A Cleaner Energy Future
Before I explain my view that the disrupter scenario is the more likely one, let’s look at what this future of mobility might look like. While the likes of Mercedes, BMW and Tesla design cars with self-driving features, Google is developing a car without pedals or a steering wheel, removing drivers from the equation altogether. Google is thus effectively placing a big bet on the full autonomy technology necessary to enable the creation of robotaxi services. A transport ecosystem dominated by a robotaxi fleet would be one in which, with the tap of a button on your mobile phone, a vehicle of your preference could be summoned to your location within a matter of seconds, opening its door as you approach. On arrival at your destination, you would exit the vehicle, which would drive away to the next rider.
This level of convenience would almost certainly lead to a rise in vehicle miles travelled, but how might the overall picture of energy use change? Changing consumer habits could ultimately lead to a decrease in energy consumption if passengers use ‘suitably-sized’ vehicles for each trip. For example, a rider might use a single-occupant vehicle for his daily commute, switching to a larger vehicle when travelling with family and friends. Energy consumption could be reduced further if self-driving vehicles employ smoother acceleration and braking, and are allowed to drive in platoons, reducing air resistance. Eventually, when human-driven vehicles are phased out and the risk of collision recedes, vehicles will be designed to weigh significantly less, reducing energy consumption even further.
The utilisation rates of robotaxis as compared with privately-owned vehicles will necessitate a different energy consumption strategy; if driven over 40,000 miles per year, a robotaxi will be more cheaply powered by an electric battery or hydrogen fuel cell, as compared with gasoline, according to researchers at the Lawrence Berkeley National Laboratory. Furthermore, if the infrastructure necessary for powering electric vehicles is cheaper, the relative benefits of using this cleaner energy supply will be even greater. In a demonstration of how a car that drives itself might one day charge itself, Tesla recently unveiled a creepy, snake-like prototype charger capable of navigating itself to the Model S charging port – all without human interference.
Another benefit of increased utilisation rates will be shortened vehicle lifecycles, which will hasten the adoption of new, cleaner technologies across the fleet. In combination, these incremental benefits have the potential to massively reduce greenhouse gas emissions as well as locally toxic emissions.
The Effects on Industry
With fewer cars on the road, far less parking space will be required, leading to a glut of land supply. Cheaper land in combination with cheap and efficient transport of goods and people will lead to new business models becoming feasible, creating employment and at least partially offsetting the loss of driving-related jobs.
However, just as the spread of driverless cars makes new industries feasible, it will threaten the viability of many others. Planners must consider the potential progression of the self-driving car ecosystem when deciding whether to build railways and airports. Such infrastructure projects are hugely expensive, take decades to build and are predicated on long-term traveller number forecasts. The introduction of a cheap, convenient, reliable, comfortable and efficient doorway-to-destination transport offering in the form of autonomous vehicles could very quickly render railways redundant. The airline industry could also suffer as travellers elect to make short-distance and even some long-distance journeys in the relative comfort and convenience of autonomous vehicles.
While the impact of driverless car technology on railways and airports is somewhat speculative, the impact on the auto industry is clear: Barclays has predicted that new car sales in the US could fall by 40% over the next 25 years. Meanwhile, to almost nobody’s disappointment, the auto insurance industry is set to be crushed, as the responsibility for accidents shifts from the driver to the manufacturer; already, Volvo has announced that it will accept full liability whenever one of its cars is in autonomous mode. Other industries set to experience huge job losses include the taxi and freight industries.
Autonomous vehicles will improve the lives of millions by bringing freedom of mobility to children and elderly people, as well as those who are blind or have disabilities. But freedom of mobility will also extend to those who might want to travel while asleep or intoxicated. Today a huge proportion of road deaths are related to drink driving and drowsy driving, deaths that will be eliminated in a driverless future. Researchers estimate that overall self-driving cars could save 30,000 lives per year in the United States alone.
Self-driving cars will also improve lives by freeing up time now spent driving to be available in the future for work or leisure. McKinsey & Company estimates that autonomous vehicles could ultimately free up 50 minutes a day for users, potentially producing extra digital-media revenues of €5bn per year for each one of these minutes that these erstwhile drivers spend accessing the internet while in a vehicle.
Why There Will Be a Tipping Point
While I believe that a tipping point will be reached, after which the shift to autonomous vehicles will increase rapidly, this opinion rests on certain – in my view reasonable – assumptions.
I assume that a robotaxi service will be able to effectively compete with other transport offerings on convenience and cost. Uber, a service that seamlessly connects riders with drivers through the use of an app, and is considered a forerunner of the robotaxi services of the future, recently completed a round of funding valuing the six-year-old company at $51bn. The company’s CEO, Travis Kalanick, is quite open about his plans to replace human drivers with a self-driving fleet: “When there’s no other dude in the car, the cost of taking an Uber anywhere becomes cheaper than owning a vehicle.” If you think Uber is popular now, imagine how popular a cheap Uber would be.
I am also assuming that due to higher utilisation rates, a far smaller fleet of self-driving cars will be required in order to service a typical city. The OECD’s International Transport Forum found that combined with high-capacity public transport, a shared self-driving fleet of vehicles could displace 9 out of 10 cars in a mid-sized European city. As the number of robotaxis increases, average waiting times will fall, enhancing the service further, while prices should also fall as vehicle manufacturers and robotaxi service providers exploit economies of scale. This combination of increasing convenience and decreasing price will lead to a virtuous cycle in which more and more passengers are converted to the service.
The Long Road
Supposing these assumptions are correct, how soon can we expect this tipping point to occur? Not I think in the immediate future. The auto industry accounts for 11.5% of United States GDP. It would be foolish to presume that those standing to lose out as a result of the adoption of self-driving cars will not seek to mobilise their resources and mount a defence of the current paradigm. If they can’t stop this shift in its tracks, they will throw everything at delaying it.
It could be that the public end up rejecting self-driving vehicles over safety fears. It could be that regulation processes take far longer than anticipated. Ethical questions remain unaddressed, such as how a self-driving car might make a decision between different courses of action with different harmful consequences – a scenario analogous to the ‘trolley problem’ thought experiment.
But despite all these hurdles, there is little doubt self-driving cars are coming. And there is little doubt they have the potential to improve the lives of millions. And although Morgan Stanley’s prediction of a utopian society in its wake seems implausible, a future transport ecosystem built around autonomous vehicles, if carefully managed, could create previously unimaginable levels of prosperity. Utopia? Maybe not yet. In the meantime, we could make do with ‘Autopia’.