On August 1, 2015, the Economist’s “The World If” column was titled “If Autonomous Vehicles Rule the World: From Horseless to Driverless.” Because I have had at the back of my mind the intention of writing a column on the coming transformation of automobiles, I could appreciate just what a wonderful article this is. I highly recommend it. Its thesis statement is:
… self-driving vehicles that can be summoned and dismissed at will could do more than make driving easier: they promise to overturn many industries and redefine urban life.
In bullet points, the support for this thesis statement is as follows (with a few comments of my own added in italics):
- Cars are expensive, but people use them only about 4% of the time. Google estimates that driverless cars that can be called at will might be in use as much as 75% of the time. Therefore, Stanford University computer scientist Sebastian Thrun predicts: “There will be fewer cars on the road—perhaps just 30% of the cars we have today.” Other estimates predict as few as 10% of the number of vehicles per person as now.
- Car makers will be selling mostly to commercially owned fleets, not individuals, and will be selling fewer cars than now.
- Car insurers will make less money as fewer cars, better driven, have fewer accidents. This possibility has been officially recognized by insurers in SEC filings.
- Fewer accidents also means fewer car parts will be sold.
- Robot taxis are a lot cheaper to use than human taxis–humans are expensive. Uber’s head Travis Kalanick said “When there is no other dude in the car, the cost of taking an Uber anywhere becomes cheaper than owning a vehicle.” Note also that without a driver, a robot taxi can be smaller. And it is easy to let people order the size they really need–a one-seater for simple trips; something bigger when they have luggage.
- Self-driving trucks will make trucking cheaper; they also will reduce demand for motels and restaurants along the road.
- An estimated 4.2 million car accidents and 21,100 deaths from car accidents will be avoided every year.
- “A study by the University of Texas estimates that 90% penetration of self-driving cars in America would be equivalent to a doubling of road capacity and would cut delays by 60% on motorways and 15% on suburban roads.”
- People will be able to get more done when they are in a car. (Some designs have people seated around a table.)
- Kids, senior citizens and the blind will gain independence. Parents will no longer spend such large chunks of time shuttling their kids to various classes, practices and other events.
- Much of the 24% of urban space devoted to parking will be available for repurposing. And most of the 30% of urban miles devoted to looking for a parking space can be saved.
- While the city centers can get denser without the need for so many parking spaces, the ability to sleep during one’s commute will also spur the growth of exurbs.
- Fear of driverless cars as dangerous has been much less than some have predicted. Indeed, some stuck behind them are already complaining that driverless cars drive too carefully and timidly. In the future, we may be (appropriately) afraid of having human drivers on public roads.
- Overall, the addition to growth and human welfare will be enormous if the technical challenges can be met.
- Boosting economic growth in the long-run typically requires making expensive things cheaper. And things are typically expensive because someone is earning money doing them. So making things cheaper inevitably means that some people will need to shift to other jobs from the jobs they are used to. But these adjustment costs are worth it for the benefits. It would be a big mistake to obstruct the transformation of cars.