Originally posted on N2 Technology on March 16, 2021.
Autonomous vehicles make headlines every day. Advocates propose that they will improve the economics of nearly every industry, constitute a more comfortable, convenient, and efficient commute, and improve road and car safety exponentially. Yet, driverless cars are met with great resistance and fear. Naysayers believe that entire industries will implode, putting millions of jobs and livelihoods in jeopardy. There is a huge lack of trust in the technology and the subsequent safety of passengers - including the privacy of their data, and they’re expensive - leading to limited accessibility.
So will AVs lead us to a cataclysmic disaster or present boundless opportunities? Perhaps it depends on the lens you look through...
A whole new world
What if we all had more time? Picture this: all the cars on the road are autonomous. Most commuters have given up traditional car ownership in favour of car sharing services. You get in, type - or speak - your desired location. Then you sit back, relax and let the car take you to where you need to go. You can now use this time to clock in work-hours, read a book, surf the web or take a nap.
This is great as commuting is a worldwide struggle. The average London employee spends nearly 2.5 hours a day travelling door-to-door. That’s 23.5 days and an average of £10,020 ($13,928) worth of unpaid time a year. Commuters are spending almost one-fifth (18%) of their salaries on travelling, and commuting parents spend an extra £2,873 ($3,993) per year to cover childcare - that equates to 10% of the average London net salary post-tax.
Speaking of finances, cars are expensive. They typically sit unused 95% of the time. In fact, an average car that clocks around 10,000 miles a year loses £50.88 ($70,72) a week in depreciation - or 32p (44 cents) every minute it sits motionless. In theory, driverless cars can diminish this issue. Instead of cars sat parked when out of use, AVs can continually drive around, pick up passengers, and generate revenue - potentially a new source of passive income. Or, households can rely on one car instead of multiple, as when one driver has concluded their journey, the car can then return itself to another member. In other words, private ownership could become redundant and car sharing services could act in its replacement.
AVs enable cars to drive in much closer proximity, at a high velocity and in perfect harmony. This has a dual effect on increasing traffic flow and reducing congestion. Alternatively, if car sharing takes precedence, fewer cars will be needed, freeing up parking structures and allowing land to be repurposed. Therefore, old infrastructures and current urban designs will no longer be suitable. This could be game-changing for real estate values. As supply increases and the commutes become more palatable, suburbs will be more appealing as the distance from urban cores will become irrelevant.
But perhaps considered the most essential reason for driverless cars, AVs effectively remove the hazard of human error (which amounts to more than 90% of road accidents), leading to improved safety. As Robin Chase, founder and CEO of Buzzcar says, “these cars won't get drunk or high, drive too fast, or take unnecessary risks—things people do all the time.”
The unintended consequences
Car sharing apps could result in private ownership redundancy,
Alterations - or diffusal - of mandatory car insurance due to the dramatic decline in accidents and liability falling on manufacturers or software companies,
Infrastructure transformation to meet the car’s requirements,
A manufacturing revolution and repurposing of components,
Mass unemployment in some sectors and potential huge growth in others,
Greater attention required for privacy and cybersecurity,
The huge upheaval of legislation regarding liabilities,
Reduction of public transport use,
A decline in medical services currently catering to vehicle-related injuries,
Redeployment of disposable income,
And our personal favourite: no more parking tickets (although that could lead to a reduction in local tax-raising).
Every revolutionary technology requires rapid adoption and adaptation. Businesses that don’t adjust fast enough will eventually cease to exist. Billions - if not trillions - of dollars will potentially be lost from automakers, suppliers and components manufacturing, dealers, construction, logistics, insurers, parking companies, and other car-related enterprises. Governments are also at risk of lost revenue from licensing fees, taxes, fines and tolls, as are personal injury lawyers and health insurers.
At first glance, this seems catastrophic. But in reality, cars will always need steel, glass, an interior, a drivetrain, and some form of human interface. Many aspects could also become customisable, as the prime directive shifts from drivability to comfort and entertainment. Seats could be configured to personal preference, maybe blackout screens will need installing, and widescreen TVs will replace windows. In other words, revenue through monetising travel might just give birth to a whole new industry.
“In 2030, self-driving cars are expected to create $87 billion worth of opportunities for automakers and technology developers,” says Investopedia.
Unfortunately in the short term, driver occupations such as bus and taxi operators, truckers, postal service and human couriers will need re-employment. But here’s the thing: according to the Department of Commerce’s Economics 2017 Statistics and Administration report, only one-fifth of driving jobs are actually at risk. Technology Magazine reports that even if AVs are on the road, human intervention will always be required; “Drivers do a lot more than just drive, including checking and repairing vehicles that break down, loading and securing cargo, and providing customer service. Most of these tasks are completely beyond the scope of automation as we know it. What we’ll most likely see is a level of automation that assists drivers to make their job easier.”
Driver jobs will most likely be repurposed for maximum efficiency. Trucks, forklifts and delivery robots could be navigated from a control room filled with screens and steering setups, allowing truckers to handle more than one vehicle at a time. These teleoperated vehicles could be a solution for companies who need to carry out transportation and logistic tasks remotely - additionally reducing the need for physically demanding driving jobs. It’s predicted that there will also be an increase in desirable occupations related to off-road tasks such as; customer care, emergency management, registrations, bookings and auto repairs.
A new automotive ecosystem
According to Intel, this new automotive ecosystem will create a $7 trillion industry that will drive a need for software engineers, data scientists, experts in AI, and vehicle manufacturing. But it doesn’t end there - a broader scope of occupations are expected to emerge:
AVs need to be built and scaled to guarantee a successful and safe operation, as well as provide customers with a consistently great user experience. Resources will be needed to: manage fleet, design vehicles and UX, develop new services, apps and updates, integrate existing technology, build smart cities with a well-connected road infrastructure, create and develop ride-sharing apps and on-demand insurance services, build and maintain refuel or charging stations, general vehicle maintenance and repairs, and build a well-connected and secure remote operations and emergency service. Additionally, cleaning will be required inside and out, batteries will need recycling, display screens will need repairing, and marketing will have an additional channel to push advertisement. The opportunities at this moment in time are somewhat incomprehensible. In other words, AVs will be a hotbed of startups and, as a consequence, be hugely attractive to the astute investor.
In 2013 Morgan Stanley reported: "driverless cars will save the U.S. economy $1.3 trillion per year, once they fully penetrate the market - saving the world: $5.6 trillion / year. The U.S. could save $158 billion in fuel costs, generate $500 billion in productivity, and avoid $480 billion in accident-related expenses.”
The increasingly sophisticated technology supporting AVs and smart cities will require a new workforce. This includes engineers and trade workers that possess a more advanced, system-level skill set with cross-functional abilities. The interconnected automotive components like engines or electronics will require the intelligence of maths, physics, AI, machine learning, robotics, data science, and software, says a 2019 report from Boston Consulting Group (BCG) and Detroit Mobility Lab (DML).
In the 1870s, electric-powered trams overtook horse-drawn carriages. 60 years later, they were replaced by buses and cars in the 1930s. By the early ‘50s, there were no trams left running in London. The moral? Humans are always innovating. Over the years, we’ve seen driver functions increasingly become automated; 50 years ago, automatic gears were introduced followed by anti-lock braking, then traction control, lane censoring, and sleep alarms. Full-automation is merely another step in the process.
Of course, with every new evolutionary innovation, new challenges, fears, and obstacles will need to be confronted. Arguably, out of all the burgeoning technologies on the horizon, AVs and the surrounding industries yet to be born will be the most pervasive. I asked in the opening if AVs will be a catastrophe or present tremendous opportunities. My answer? AVs have already created limitless potential for innovation, creation and investment. And even before we get to full, mass-market automation, we’ll most likely experience a hybrid world, where the evolutionary journey in itself gives rise to phenomenal business and job creation opportunities. AVs will be an extraordinary industry to be part of the innovation roadmap, and equally to invest in.
My question now is: how do we speed up the pace of adoption?