5 Ways Self-Driving Vehicles Will Impact the Economy

The world of self-driving is on its way, and it will have a widespread impact on the economy and our lives. Many of these effects will be positive. However, it will also come with downsides. This article looks at the initial skepticism about driverless cars and some of the complex ways in which they will affect our economy and world.

Roadway robophobia

When people discuss self-driving cars, it is often with an air of concern. Immediately it seems dangerous – the notion of robocars darting around on the roads, perhaps with commuters behind the wheel reading books or flipping through social media. However, the worries over autonomous driving fail to account for the roadway perils that exist today. According to the Association for Safe International Road Travel (ASIRT), car collisions result in 3287 fatalities each day, adding up to 1.3 million deaths worldwide. The economic impact of these crashes is no less disturbing: driving accidents cost USD $518 billion across the planet every year, accounting for 1-2% of the gross domestic product (GDP) of individual nations.

To be fair, a driver is not responsible for all these incidents; sometimes the car malfunctions. However, a report from Stanford University found that 90% of all car crashes are caused at least in part by human error.

Since people do often make deadly mistakes on the road, self-driving could actually be a revolution for roadway safety. In fact, it is estimated that 600,000 lives will be saved by 2045 through the self-driving car.

The dawn of a new, robocar-friendly world

Once we get past our robophobia related to autonomous driving, we can start to see the enormous benefits, not just in terms of personal safety but economic gain.

In fact, a study conducted by researchers at Strategy Analytics and Intel found that the industry will give the worldwide economy a massive jolt of growth: $7 trillion, with $2 trillion of it in the United States, by 2050.

These cars will create and use enormous swaths of data. That vehicle data monetization will create global revenue valued at $750 billion by 2030, per analyst firm McKinsey.

5 ways the self-driving car will impact the economy

Just looking at the numbers might give us a sense of scope, but it does not let us know the “how” – the way that the economy will transform as these cars start to become part of our daily lives. Here are 5 ways that the economy (and our culture) is expected to transform as a result of the driverless car:

1. Higher productivity

Kennesaw State University economics professor Luc Noiset noted to Tech Insider that the productivity gains of self-driving will be multifarious.

Prevention of crashes will reduce downtime and increase productivity. The improved traffic flow allowed by self-driving artificial intelligence will free us from traffic jams and get us to work faster. Robocars also won’t get speeding tickets and lose productivity in that way. Plus, the most obvious productivity gain: you can get things done for work on the road.

2. Businesses will go to the consumer.

The technology that makes it possible for cars to drive themselves will be used in trucks and vans, which are sizable enough to be used as mobile stores, offices, or other on-the-go facilities. Because of these possible uses of larger vehicles, the self-driving era will be a time during which more businesses are making their way to the customer.

A gym could come to you, for instance. Once you are finished using the equipment, it could then drive on to the next scheduled member. It would also be possible for retailers to send out vehicles containing racks of clothing and dressing rooms. It would be possible with such a model for a customer to select a number of items that might suit them, try everything on within the mobile store, and only keep the items that work.

Another business type that will emerge with driverless tech is the mobile grocery store. There is a startup out of Santa Clara, California, called Robomart that is an on-demand mobile grocery store. Toyota also has unveiled a self-driving vehicle that could deliver packages but also be used as a hotel room that could be dispatched to any location.

3. Loss of some types of jobs

Police and traffic court administrators will not be in as high of demand. Professor Noiset suggests that about 1 million people in those two roles will have to look for other work.

University of Maryland professor David Kirsch agreed on that point, adding that many local delivery drivers (such as mail drivers), truck drivers, and taxi drivers will lose their jobs as well.

4. Gain of other types of jobs

The job displacement described in #2 will not occur suddenly but take place over time, according to Brent Goldfarb, also of the University of Maryland.

Yes, he said, some in unskilled positions will lose their jobs. However, that does not mean that half of cops and cabbies will be unemployed in a couple decades.

“[W]e do seem to find things for people to do,” he said. “This is an old problem that has happened throughout history.”

5. Urban areas will change significantly.

The infrastructures within cities will need to be modified to accommodate the driverless age. While today there is a strong focus on the automobile, the pedestrian will begin to become a more powerful entity once self-driving becomes the new standard.

Self-driving cars will have extraordinarily predictable paths of motion, which will allow urban designers to build in narrower roads, per the National Association of City Transportation Officials. There will be more room left for bicycles and pedestrians.

Street-crossing could also become easier and safer, since autonomous cars will be incapable of human error and failure to see people coming across the road.

It is even possible that traffic lights will become unnecessary, since lights are a collision-prevention method that will not be needed when cars can seamlessly move through intersections in the most efficient way possible.

Disruption across industry

The above six points reveal the impacts that self-driving will have on taxi services, law enforcement, and truck driving; but the effect of a self-driving world will be much broader. Beyond the above sectors, here are a few other industries that will be disrupted by robocars:

• Hotels / Motels – Many weary travelers will opt to save money by sleeping behind the wheel of a self-driving vehicle that continues to motor its way on a long trip, rather than losing the time and expense of a hotel stay.
• Airlines – Flying on a plane can be uncomfortable. Skipping that process to take a self-driving car instead will be attractive to many people who would rather skip the annoyances of airline travel.
• Public transportation – Just like people will skip the airlines for autonomous driving (AV), people will be inclined to skip commuter trains and buses in favor of robocars.
• Auto repair and parts – As noted above, the vast majority of accidents are caused by human error. There will be less need for auto parts and repair services with safer roads.
• Ride-hailing – While Uber and Lyft want to be ready for the AV world, it could be too expensive to make sense in the end. With self-driving, ride-hailing firms will have to own their own fleet.
• Fast food – These institutions are based on people seeing a sign and stopping. With the car on auto-pilot to its destination and people busy with activities, they will feel uninclined to redirect the car.
• Real estate – Since there will be less demand for gas stations, parking lots, and parking garages in cities, urban commercial property rates will likely drop.

Shipping your car today

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