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>Just imagine. [Driverless cars] could, for a start, save the motor industry from stagnation...; and since [cars] would be able to drop off their passengers and

>Just imagine. [Driverless cars] could, for a start, save the motor industry from stagnation...; and since [cars] would be able to drop off their passengers and drive away, the lack of parking spaces in town might not matter so much. Strange that the Economist would catch the diminished need for parking spaces, but miss the real economic impact of driverless cars: many fewer cars would be needed as utilization rates rise far above the current ~4-7%[1]. This would cause a total collapse of the car industry, not save it as suggested by the article. [1] 7500-15000 miles at an average of 25MPH is 300-600 hours a year or or about 4-7% utilization.

coenhyde 14y ago
Agreed. The car industry would surely know this too. I wonder how the future will unfold; maybe the automakers will end up resisting the self driving car.
- ewolf 14y ago
  I currently see Google taking the lead in the development of driverless cars, so I suppose car makers will be left with no choice.
- kiba 14y ago
  They are already building their self destruction with more automatic driving features. The only question is which carmaker wants to pull the trigger first and come home walking with the prize.
ewolf 14y ago
What would be the exact reason that less cars would be needed? Are you referring to multiple cars in one household becoming superfluous? This would, of course, only be the case if driverless driving would be permitted entirely — I can very well imagine a prolonged transition phase where a human being needs to be able to intervene at all times. Or are there already plans for automatic car sharing? This could be easily opposed by promoting the opinion that having an own car that is customized to your personal needs and where you can leave your belongings bears an advantage big enough to buy one. Of course, ecologically, it would be great if both of this would be permitted, but my point is, autonomous cars could be introduced without car manufacturers incurring any immediate losses.
arethuza 14y ago
We already have cars that don't need you to drive them: taxis. Where I live the various different competing taxi companies compete to give a pretty high level of service - I can order a cab via an iPhone app or through an IVR system that only requires me to press a single key if I want a taxi there and then - payment is to account (work) or chip-n-pin. Even with a pretty decent taxi service I still own a car, as do most people I know. So I suspect that even when cars become completely self-driving we will still generally end up buying the things for possibly less than completely rational reasons.
- michaelt 14y ago
  A cab in SF costs $2.25 per mile (plus a flag fee, plus a fee for waiting in traffic, plus an airport surcharge) The IRS mileage rate is 14 cents per mile driven in service of charitable organizations and 51 cents per mile driven for business. Taxis haven't replaced private cars because they're radically more expensive.
  - protomyth 14y ago
    Why would you think that a self-driving car fleet will have less cost? They will be regulated just like taxis. Including insurance and most importantly medallions. Replacing the drivers will not cut the cost in an industry that creates artificial scarcity.
    - swombat 14y ago
      It will in countries that aren't completely bone-headed about it. I guess a good measure of how corrupt a particular political environment is will be how long it takes to give in to the overwhelming reasons (ecological, economical and social) to allow the true, very low cost of self-driving cars to have its impact on the taxi industry.
      - protomyth 14y ago
        I would be curious which countries those are? Is their a 1st world country that doesn't license their cabs to provide an artificial scarcity? Heck, some cities actually mandate the brand of car that can be used for a cab.
lumberjack 14y ago
You are assuming that driverless cars will be just as inexpensive as the typical American car today. That's certainly not true today. For example the Google car has $150K in equipment costs. Sure that might go down in time due to more demand but I doubt it will become literally negligible cost wise. Besides that, there is the added cost of software development, and maintenance. And besides that there is money to be made in selling software for these new cars. Software like up to date datasets or more accurate traffic avoidance heuristics.
- michaelt 14y ago
  LIDAR manufacturer Ibeo currently make a ~12,000 euro LIDAR which they estimate, if mass produced, could cost less than 200 euros. The cost of the extra equipment won't be negligible - but it'll be very low once this stuff gets widely adopted. [1] http://www.its.dot.gov/research_docs/pdf/cicas_tech_docrpt2.pdf http://www.its.dot.gov/research_docs/pdf/cicas_tech_docrpt2.... PDF, see pages 12 and 13
- DanBC 14y ago
  The Google car is a prototype. That $150k in equipment cost will be dramatically reduced by engineering for production and mass production. The cost doesn't need to become negligible. The cost needs to become justifiable.
peff 14y ago
Is utilization over time important? If we assume that people will still travel the same number of miles[1], then while there will be fewer cars on the road at any given moment, they will wear out more quickly as they are utilized more heavily. Another way of thinking of it is that there is demand for a certain number of vehicle-miles per year. In the aggregate over the long term, it is no different if we buy 5 cars, each of which lasts 5 years, or if we buy one car every year for 5 years as the old one wears out[2]. Higher utilization should make fleet replacement a smoother function over time (whereas now, you can see dips and spikes as people decide when to put capital in their cars based on factors like the overall health of the economy). [1] It is not clear what the impact of driverless cars would be on mileage. It would eliminate some useless trips (e.g., doubled miles for dropping somebody off). But the convenience may mean that people simply use it more. [2] I'm assuming that wear and replacement time are purely a function of miles traveled. This is not entirely true, as age is a factor, but I think mileage tends to dominate in the average car (i.e., one that is being used, not one having its belts dry-rot over many years of neglect). Companies that maintain car fleets probably have data on this.
- peff 14y ago
  By the way, I'm assuming a taxi-like shared car fleet here, where you just get in some car that is available, it takes you where you want to go, and then goes to pick somebody else up afterwards. Without that, you would not have the reduction in number of cars on the road and need for parking.
- tobiasu 14y ago
  It's an old chestnut that buying a salesman's car with lots of miles is a lot better than buying the same vehicle from a housewife that only used it to go shopping and shuttle the kids to school. Besides, who says that the driverless car isn't more like industrial equipment instead of the current consumer crap, made to go on "forever" to justify its high price?
  - VBprogrammer 14y ago
    I think that is a very good point. While designing cars to last longer would increase the weight of some components, for example allowing more metal around the cylinders so that they can be re-bored a number of times, this could be at least partially by having a much reduced burden of crash resistance. Some things could be alleviated simply by avoiding the maintenance / cost cutting shortcuts used today. For example fitting grease nipples to ball joints and greasing them regularly makes them last a great deal longer than the sealed units which are riveted to swing arms today!
rsheridan6 14y ago
The problem is that most people need their cars at the same time - rush hour.
- seanmcdirmid 14y ago
  1. Optimized traffic flow that driverless gives you would be able to pack more vehicles on the road. 2. If we are treating all cars are like a fleet of autonomous taxis, it doesn't seem really crazy that you could also optimize carpooling where the car picks up other passengers to optimize the trip with respect to where you and they are going.
  - rsheridan6 14y ago
    Yes, you could probably share cars to a greater extent than we do today, but not nearly enough to get the ~20x reduction in the number of cars on the road that the parent suggested. If you have optimized traffic, you could live further out and the commute wouldn't take any longer, so that could lead to more sprawl. You also would be able to do something while commuting besides watch the road, making the commute more tolerable, which could lead to even more sprawl.
du 14y ago
I don't think utilization (without taking into account the number of passangers) is important, as peff pointed out. What will change demand is that the car occupancy rate will grow. And since one doesn't need to own a car anymore, the number of cars will be reduced. Bringing together strangers on the same route will get a lot easier in the future. And if one isn't using one's own car but essentially a taxi, we'll see a lot more ride sharing. Especially, if some of the oil price horror scenarios (at least partly) play out. Right now, the car occupancy rate in the US is around 1.6[1]. Imagine it going up to 2, which is around the rate of some Eastern European countries a couple of years ago[2]. I think it will be even higher. Another thing to consider is the demand change, since the usage changes (to some degree) and the buyers change (renting companies instead of consumers). If that benefits domestic car manufacturers, idk. [1]http://www1.eere.energy.gov/vehiclesandfuels/facts/2010_fotw613.html http://www1.eere.energy.gov/vehiclesandfuels/facts/2010_fotw... [2]http://www.eea.europa.eu/data-and-maps/figures/term29-occupancy-rates-in-passenger-transport-1 http://www.eea.europa.eu/data-and-maps/figures/term29-occupa...

coenhyde 14y ago

Agreed. The car industry would surely know this too. I wonder how the future will unfold; maybe the automakers will end up resisting the self driving car.

ewolf 14y ago
I currently see Google taking the lead in the development of driverless cars, so I suppose car makers will be left with no choice.
kiba 14y ago
They are already building their self destruction with more automatic driving features. The only question is which carmaker wants to pull the trigger first and come home walking with the prize.

ewolf 14y ago

What would be the exact reason that less cars would be needed? Are you referring to multiple cars in one household becoming superfluous? This would, of course, only be the case if driverless driving would be permitted entirely — I can very well imagine a prolonged transition phase where a human being needs to be able to intervene at all times. Or are there already plans for automatic car sharing? This could be easily opposed by promoting the opinion that having an own car that is customized to your personal needs and where you can leave your belongings bears an advantage big enough to buy one. Of course, ecologically, it would be great if both of this would be permitted, but my point is, autonomous cars could be introduced without car manufacturers incurring any immediate losses.

arethuza 14y ago

We already have cars that don't need you to drive them: taxis. Where I live the various different competing taxi companies compete to give a pretty high level of service - I can order a cab via an iPhone app or through an IVR system that only requires me to press a single key if I want a taxi there and then - payment is to account (work) or chip-n-pin. Even with a pretty decent taxi service I still own a car, as do most people I know. So I suspect that even when cars become completely self-driving we will still generally end up buying the things for possibly less than completely rational reasons.

michaelt 14y ago
A cab in SF costs $2.25 per mile (plus a flag fee, plus a fee for waiting in traffic, plus an airport surcharge) The IRS mileage rate is 14 cents per mile driven in service of charitable organizations and 51 cents per mile driven for business. Taxis haven't replaced private cars because they're radically more expensive.
- protomyth 14y ago
  Why would you think that a self-driving car fleet will have less cost? They will be regulated just like taxis. Including insurance and most importantly medallions. Replacing the drivers will not cut the cost in an industry that creates artificial scarcity.
  - swombat 14y ago
    It will in countries that aren't completely bone-headed about it. I guess a good measure of how corrupt a particular political environment is will be how long it takes to give in to the overwhelming reasons (ecological, economical and social) to allow the true, very low cost of self-driving cars to have its impact on the taxi industry.
    - protomyth 14y ago
      I would be curious which countries those are? Is their a 1st world country that doesn't license their cabs to provide an artificial scarcity? Heck, some cities actually mandate the brand of car that can be used for a cab.

lumberjack 14y ago

You are assuming that driverless cars will be just as inexpensive as the typical American car today. That's certainly not true today. For example the Google car has $150K in equipment costs. Sure that might go down in time due to more demand but I doubt it will become literally negligible cost wise. Besides that, there is the added cost of software development, and maintenance. And besides that there is money to be made in selling software for these new cars. Software like up to date datasets or more accurate traffic avoidance heuristics.

michaelt 14y ago
LIDAR manufacturer Ibeo currently make a ~12,000 euro LIDAR which they estimate, if mass produced, could cost less than 200 euros. The cost of the extra equipment won't be negligible - but it'll be very low once this stuff gets widely adopted. [1] http://www.its.dot.gov/research_docs/pdf/cicas_tech_docrpt2.pdf http://www.its.dot.gov/research_docs/pdf/cicas_tech_docrpt2.... PDF, see pages 12 and 13
DanBC 14y ago
The Google car is a prototype. That $150k in equipment cost will be dramatically reduced by engineering for production and mass production. The cost doesn't need to become negligible. The cost needs to become justifiable.

peff 14y ago

Is utilization over time important? If we assume that people will still travel the same number of miles[1], then while there will be fewer cars on the road at any given moment, they will wear out more quickly as they are utilized more heavily. Another way of thinking of it is that there is demand for a certain number of vehicle-miles per year. In the aggregate over the long term, it is no different if we buy 5 cars, each of which lasts 5 years, or if we buy one car every year for 5 years as the old one wears out[2]. Higher utilization should make fleet replacement a smoother function over time (whereas now, you can see dips and spikes as people decide when to put capital in their cars based on factors like the overall health of the economy). [1] It is not clear what the impact of driverless cars would be on mileage. It would eliminate some useless trips (e.g., doubled miles for dropping somebody off). But the convenience may mean that people simply use it more. [2] I'm assuming that wear and replacement time are purely a function of miles traveled. This is not entirely true, as age is a factor, but I think mileage tends to dominate in the average car (i.e., one that is being used, not one having its belts dry-rot over many years of neglect). Companies that maintain car fleets probably have data on this.

peff 14y ago
By the way, I'm assuming a taxi-like shared car fleet here, where you just get in some car that is available, it takes you where you want to go, and then goes to pick somebody else up afterwards. Without that, you would not have the reduction in number of cars on the road and need for parking.
tobiasu 14y ago
It's an old chestnut that buying a salesman's car with lots of miles is a lot better than buying the same vehicle from a housewife that only used it to go shopping and shuttle the kids to school. Besides, who says that the driverless car isn't more like industrial equipment instead of the current consumer crap, made to go on "forever" to justify its high price?
- VBprogrammer 14y ago
  I think that is a very good point. While designing cars to last longer would increase the weight of some components, for example allowing more metal around the cylinders so that they can be re-bored a number of times, this could be at least partially by having a much reduced burden of crash resistance. Some things could be alleviated simply by avoiding the maintenance / cost cutting shortcuts used today. For example fitting grease nipples to ball joints and greasing them regularly makes them last a great deal longer than the sealed units which are riveted to swing arms today!

rsheridan6 14y ago

The problem is that most people need their cars at the same time - rush hour.

seanmcdirmid 14y ago
1. Optimized traffic flow that driverless gives you would be able to pack more vehicles on the road. 2. If we are treating all cars are like a fleet of autonomous taxis, it doesn't seem really crazy that you could also optimize carpooling where the car picks up other passengers to optimize the trip with respect to where you and they are going.
- rsheridan6 14y ago
  Yes, you could probably share cars to a greater extent than we do today, but not nearly enough to get the ~20x reduction in the number of cars on the road that the parent suggested. If you have optimized traffic, you could live further out and the commute wouldn't take any longer, so that could lead to more sprawl. You also would be able to do something while commuting besides watch the road, making the commute more tolerable, which could lead to even more sprawl.

du 14y ago

I don't think utilization (without taking into account the number of passangers) is important, as peff pointed out. What will change demand is that the car occupancy rate will grow. And since one doesn't need to own a car anymore, the number of cars will be reduced. Bringing together strangers on the same route will get a lot easier in the future. And if one isn't using one's own car but essentially a taxi, we'll see a lot more ride sharing. Especially, if some of the oil price horror scenarios (at least partly) play out. Right now, the car occupancy rate in the US is around 1.6[1]. Imagine it going up to 2, which is around the rate of some Eastern European countries a couple of years ago[2]. I think it will be even higher. Another thing to consider is the demand change, since the usage changes (to some degree) and the buyers change (renting companies instead of consumers). If that benefits domestic car manufacturers, idk. [1]http://www1.eere.energy.gov/vehiclesandfuels/facts/2010_fotw613.html http://www1.eere.energy.gov/vehiclesandfuels/facts/2010_fotw... [2]http://www.eea.europa.eu/data-and-maps/figures/term29-occupancy-rates-in-passenger-transport-1 http://www.eea.europa.eu/data-and-maps/figures/term29-occupa...