Going Mainstream
The truth is that self-driving cars are not as radical as they might seem. AV technology builds on many existing innovations impacting related industries including factory production (machine automation), telecommunications (information technology), aircraft control systems (autopilot) and terrestrial navigation (GPS). In fact, there is a counter-intuitive analogy that makes driverless cars less inexplicable. Long before the arrival of self-driving cars, there was the elevator. Elevators transformed how humans physically move through buildings, eventually eliminating the need for human operators altogether.
Like elevators, AV technology will completely transform urban mobility. The expectation is that AVs will provide needed relief to overloaded transportation systems with driverless vehicles freeing more than 250 million hours of commuting time each year. Driverless vehicles will help smooth traffic flow and reduce congestion by automating transportation across ever-advancing telecommunications networks. But even as the capabilities of AVs continue to evolve, it's not a given that consumers will choose to buy them. What is more likely is that the on-demand nature of driverless cars will reshape the transportation industry altogether.
There are 3.7 billion people living in cities today with that number set to double by 2050. Assuming on-demand transportation companies like Lyft and Uber are the future, then personal car ownership could eventually become a thing of the past. Given the global rise in urban living, we can safely assume that alternatives to traditional car ownership will become the norm.
One key challenge for AV legislation is the issue of ownership. The current legal assumption is that AVs will be purchased and owned by customers. But what is more likely is that AVs will simply accelerate the shift to transportation-as-a-service. The fact is that the number of 16 to 44-year olds obtaining a driver’s license in the United States has been steadily declining since 1983. Indeed, the number of people getting driver’s licenses has been decreasing across every age group.
Nearly 1.3 million people die in traffic fatalities each year— 94% of these deaths are the result of human error. The hope is that or self-driving cars will significantly reduce this number by largely automating transportation. Studies suggest that AVs could save over half a million lives each decade. In addition to saving lives, self-driving cars will mean significant cost savings: Traffic accidents cost $500 billion worldwide each year. Self-driving car networks could mean drastically reducing insurance claims if not eliminating personal injury insurance altogether.
Regulating AVs in the United States
Erecting effective policies and regulations for managing the mainstream adoption of self-driving cars remains a complicated challenge. Technological progress may be exponential, but legislative progress remains incremental. At least 41 states and the District of Columbia (DC) have considered legislation related to autonomous vehicles. Last year, the House of Representatives passed autonomous vehicle legislation H.R. 3388 to create uniform standards for AV. However, Democratic senators signaled their concerns that the technology remains immature and underdeveloped.
The key issue is risk. Widespread fears remain that self-driving cars are not entirely safe. While companies can be very successful testing AVs within closed environments, they will eventually need to deploy fleets of self-driving cars on public roads at scale in order to determine their level of safety. This effectively puts the public at the center of potentially high-risk research environments.
Like many new and disruptive technologies, AV legislation remains fragmented across a patchwork of state directives and voluntary guidelines. In the end, it’s up to Congress to provide a federal framework, including funding for the National Highway Traffic Safety Administration (NHTSA). Absent federal standards, driverless cars will have some way to go before becoming mainstream. Nonetheless, forecasts suggest that there could be as many as 21 million driverless cars in the United States and 27 million in Europe over the coming decade.
Autonomous vehicles face significant hurdles but they are coming. The market is simply too large to ignore. Notwithstanding two fatal accidents involving semi-autonomous vehicles last March, testing of the technology continues. In 2016, GM spent $581 million to acquire Cruise Automation. Last February, Ford announced that it would be investing $1 billion in Argo AI. And of course Tesla already offers enhanced autopilot. Transitioning to a self-driving society will take time. Smart federal oversight will be essential to getting it right.
