Our Driverless Future
By now, you’re probably familiar with the concept of driverless cars – a new technology where computers will replace humans behind the wheel. Although the development of these autonomous vehicles will be gradually at first, the driverless car may become viable about ten or more years down the road.
A driverless world will undoubtedly bring about some exciting social changes – and the transition towards this technology could have implications for investors. A 2016 article from the CFA Institute provides us with a hypothetical preview of this not-so-distant world.
As the demand for driverless cars increases, cities and communities will be able to reuse or develop areas that are currently devoted to parking. A self-driving car will deliver you to your destination and then park itself in a compact high-rise parking facility, where the car will recharge itself (since it will also be electric). When you are ready to leave, you will be able to summon your car to pick you up at the door and take you home.
People living in urban areas might not need to own a vehicle; instead, you could subscribe to a car service that will drive you anywhere. In a city environment, this simple change would lead to a huge reduction in traffic, since many of the cars currently on the road are hunting for a rare parking space. Traffic flows will be faster and less congested, making city life more pleasant; and cities would be more spread out, since fewer people would dread the commute on uncrowded highways.
Additionally, you would no longer be stuck behind the wheel during your commute; instead, you could use that time for productivity or relaxation. Your car could become a mobile office that drives itself around town while you answer emails or make a conference call. If you take a road trip, you would be free to catch up on your TV shows, read or take in the scenery.
In the future, the driverless car would become the chauffeur to school or to kids’ activities while parents have more time to live their own lives. Older people would no longer have to give up the keys to the car when they reach a certain age; instead, they could travel where they pleased without endangering others.
Of course, a driverless society would also eliminate serious road hazards – drunk driving, people texting behind the wheel, people falling asleep – preventing about 30,000 highway deaths every year. Since driverless cars are more precise, a 4-lane highway could be transformed into a 5- or 6-lane road by making the lanes narrower and using the curb space. Driverless cars might move more quickly, with the potential to safely travel at speeds of up to 100 mph. These shifts would nearly eliminate traffic jams, making transportation quicker and more convenient.
Of course, the advent of the driverless car is not entirely rosy from an economic standpoint. Millions of driving jobs would be eliminated. Car insurance companies would suffer, since there would be little need for coverage in a world of nearly zero accidents. Car manufacturers would have to shift their value proposition from a thrilling drive to more robust in-car entertainment systems.
Are you ready for that world?