The bottom-line savings alone are formidable. “Beyond the practical benefits, autonomous cars could contribute $1.3 trillion in annual savings to the US economy alone, with global savings estimated at over $5.6 trillion,” wrote Ravi Shanker, Morgan Stanley lead analyst covering the North American auto and related industries, in a research note. For the US, it could represent 8% in annual GDP, the reallocation of which could have major implications of its own.
Productivity gains would come to $507 billion annually in the US, where Americans spend some 75 billion hours a year driving. Instead of staring at the blacktop, worrying about the right exit ramp, wondering whether the incoming call or text is important, commuters are free to catch up on work, more sleep, the show they missed last night, or the latest deals online. Content for commuters holds out all sorts of business and consumer possibilities.
The auto industry will have to shift gears. The growth of software as a value-added part of the car is likely to divide the industry into dedicated “hardware” and “software” makers, with a crucial role for vertically integrated “experience” makers, who control every aspect of the automobile. This structure would be similar to that of today’s smartphone or computer industries. Add to this, the content providers for the now idle passengers.
Most of the concerns or obstacles to mass adoption of autonomous vehicles are largely practical or procedural in nature. What’s more, these issues appear relatively easy to solve. For example, the question of liability, seemingly insurmountable when considering the current complexities, may not arise at all if all jurisdictions went “no fault.”
Technology is not an issue. The capability to make a self-driving car is largely available today and only needs incremental research and development, mostly in the area of testing, durability, reliability and cost reduction, all of which have largely visible paths. This is one of the few areas of agreement across the auto industry, futurists and adjacent market players.
Pricing doesn’t seem to be the issue either. “We estimate full autonomous capability will add only about $10,000 to the cost of a car, at today’s prices, which we expect will fall significantly by the time the technology is ready to be commercialized,” Shanker says.
Yet, the idea of a driverless car is still so fantastical that it struggles to get respect. Broaching the concept as something real is still met with eye-rolling and deep skepticism, even among people within the auto industry who are actively working on autonomous car technology.
Public opinion on self-driving cars remains split. It’s just not that easy for many people to imagine putting their lives, or the lives of their loved ones, into the passenger seat of an autonomous car. Acceptance and adoption will take time. As the technology begins to prove itself in terms of safety, reliability, savings and convenience, opinion could quickly shift from, “I don’t want to share the road with robots” to “I don’t want to share the road with people driving their own cars.”
Other potential obstacles often mentioned include building sufficient infrastructure, government regulation and ethical issues. But the potential gains are persuasive: less fatalities and injuries due to driver errors and negligence, emergency response and medical savings, less lawsuits, reduced road congestion, and the potential to re-engineer a core global industry that will ripple through every aspect of the economy and every turn of our mobile lives.