Self-Driving Vehicles: From Prototypes to Commercial Success

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Self-Driving Vehicles: From Prototypes to Commercial Success

From real estate and jobs to insurance and law enforcement, no digital application will have more far-reaching consequences than self-driving cars and trucks.

Consider just a few of the implications highlighted in prior Trends issues:

  1. Fewer personal cars. Once the cost of the driver is taken out of the Uber ride-hailing equation, the life-cycle cost of car ownership will make car ownership far less attractive; mobility-as-a-service (or MAAS) will dominate and fleets of autonomous cars will roam cities and suburbs, 24/7, waiting for passenger calls and selecting passengers based on optimization algorithms.
  2. Short vehicle life. Over a 10-month period, a single MAAS car could travel as much as 300,000 miles before being retired; that still leaves plenty of time for recharging, cleaning, and maintenance.
  3. Many fewer cars. One autonomous car will replace about 30 traditional cars. That could reduce today’s 258 million registered cars in the U.S. to less than 10 million.
  4. Mostly smaller cars. Over 50% of driverless cars are expected to be one-or-two passenger vehicles. Why? 76% of cars on the road now have only one person in them, and one-person vehicles will be cheaper to operate.
  5. Governmental disruption. Mobility-as-a-service, will jeopardize 40% of current sales tax revenues. Today, roughly 40%of state and local sales taxes come from consumer auto sales. Under the current rules, all cars in a commercial fleet are exempt from sales tax.
  6. Insurance will change, forever. There will be a huge reduction in automobile-related healthcare cost due to accidents. These could decline by $500 billion per year. And as fleets self-insure, the “Geico Gecko” will need to find a new job.
  7. Most retail businesses associated with cars will disappear. As personal ownership of cars begins to shrink, we will see a rapid decline in gas stations, car washes, oil change businesses, detail shops, and auto insurance offices. Dealerships themselves will also disappear. And,
  8. Many fewer garages. Home and public garages, like horse stables in NYC, will become relics of the past. Repurposing these facilities will become big business.

These changes may take 15-to-20 years to fully play themselves out. But they are almost inevitable.

Notably, this list doesn’t even consider the enormous economic implications of self-driving commercial vehicles, like over-the-road freight carriers or local service and delivery vehicles.

As with most game-changing technologies, self-driving automobiles have ridden a psychological roller-coaster, as hype has met reality...

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