Google’s self-driving car sits next to a Tesla Model S.
The exact date of their arrival varies depending on who you ask. Google wants self-driving cars by 2017, but traditional car companies still think they are 5, 10, 20 or more years away. Regardless of when the first car hits the road, the transition from traditional to self-drivers will occur far faster than many believe. The adoption rates for new technologies continue to accelerate. From records to CDs to mp3s, black & white to color to flat screen TVs, or landline to cell to smart phones, each new technology has been adopted faster than the one before. Self-drivers will continue this trend. Here’s why.
Regular People will not have to buy them
A typical concern for self-drivers is the cost. The LIDAR, sensors and control computers will be expensive, and the self-driver may be out of the financial reach of the average person. Further, replacing a perfectly good car during a period of mass unemployment seems the height of folly. What the pundits fail to realise, however, is the average person will never own a car again. Instead of buying a car and letting it lay idle in the driveway or parking lot, people will simply whip out the appropriate ‘Call Car’ app on their smartphone, summon and pay for the appropriate vehicle, and then take said vehicle to their destination. After drop-off, the self-driver will travel to its next fare. There is no need for the average person to own anything. The whole process is pay-as-you-go. No more maintenance. No more oil changes. No more worries about wrecks or running out of gas. People will simply rent cars as needed and save money and time in the process.
The capital for buying driverless cars is already here
If regular folks are not buying, then who is? The taxi companies, tech companies, rich people and other holders of capital will provide the cash to buy all these new cars. Profit is virtually guaranteed, at least in the beginning. The cost of the car is fixed. The cost of gas or electricity is relatively small, and there is no driver to pay. The primary competitors, black towncars and taxis, simply cannot compete. Once it is clear how profitable the self-drivers are to own and operate as an automated taxi service, competition between new companies rushing to exploit the gap will ensure plenty of transportation options exist for the masses.
Insurance rates for driverless cars will be substantially lower
The final nail in the coffin for traditional cars is insurance. Sure, something might go wrong with self-drivers. But, worse case scenario is the car coming to a complete stop in the middle of the freeway. Even if it does accelerate out of control, the passengers will have a way to activate an emergency stop. Compare that to human drivers’ worst case scenario(s): driving drunk, falling asleep, having a heart attack/stroke/seizure, texting/talking on the phone, eating/drinking, raging on the road, and so on to the limits of human creativity. Once it is clear how much safer self-drivers are, insurance rates on them will plummet, while the declining pool of normal drivers will cause traditional insurance rates to soar. I find it easy to imagine a world where driving your own car is frowned upon and possibly illegal.
For the average joe/joette, the choice will be clear. Price, profit, and insurance rates (and by proxy, safety) will make the self-driver a far more attractive and financially smarter alternative to a traditional car.
