Driverless Cars Are Poised To Upend The Auto Industry

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By all accounts, the Obama administration is enthusiastic about the emerging technology of driverless cars, which Google and a number of other companies are working to get on the road. The government is racing to provide regulatory guidance for the manufacturers of driverless cars to facilitate their entry into the automotive market. But a group of car manufacturers has taken the unusual step of asking the National Highway Traffic Safety Administration to slow down a little.

The problem is that the technology for driverless cars is not quite ready for the road yet, even though some features of autonomous cars are already being incorporated in new models, such as emergency braking, automatic lane changing, and speed control on the highway. However, extensive testing of driverless cars has shown some anomalies that have to be worked through.

Driverless cars are having difficulties in navigating poorly maintained roads where the lane dividing lines have faded and dealing with traffic signage that they are not programmed for. Other problems that have cropped up include driving in inclement weather, such as heavy rain or snow. The threat of terrorist hackers taking control of driverless cars and turning them into weapons is also of great concern.

Still, the day is coming, perhaps ten years from now, maybe even sooner, when one can get into a car, tell it to go somewhere, and then relax, leaving the driving to an onboard computer and a suite of sensors. Driverless cars, coupled with electric vehicles and ride sharing, promise to fundamentally change the automotive industry and the way we view automobile ownership.

Owning and operating a car is all but a necessity for everyone except those who live in a city with a robust mass transit system. A car is a means of mobility, of going anywhere one needs to go on a whim.

But the downside of owning a car is that it comes with hassles. Automobiles are a major investment, which most paid out over several years, in most cases. They have to be maintained, and insurance has to be paid for. Most of the time, the family car sits in the driveway or garage, not doing anything.

Ride-sharing services such as Uber are already pointing a way for moving beyond the tradition of owning a family car. A few taps on the smartphone will bring an Uber driver to one’s door within minutes and then the passenger can take a trip to work, the store, or a night on the town. If one can afford it, ride sharing provides an alternative to owning and driving a car.

If we add electric car technology, which makes cars cheaper to operate and maintain, and driverless car technology, which would cut out the driver, relying on ride-sharing services rather than owning one’s own vehicle may become economically attractive. If one can go anywhere for a nominal fee, why put up with the hassle and expense of owning one’s own automobile? The ride-sharing service would bear the cost of maintaining and insuring vehicles.

A lot of creative destruction could occur in such a situation. If private ownership of cars becomes a relic of a bygone era, an eccentricity at best, then the major customers of car manufacturers will be ride sharing services and other companies that maintain automobile fleets. We can say farewell to the car dealership we have to trudge to every few years to dicker with a salesman for price and amenities.

We might also say farewell to mass transit, which services people too poor to afford private cars or who, as a result of age or disability, are not allowed to drive. Why take two hours and three buses when one can just call up a ride on the smartphone?

Computer control of cars, interacting with one another on the freeway, will cut down on auto accidents as the human element is taken from behind the wheel. This development will also reduce insurance costs, which may be bad news for insurance companies. Cars driven by computers will mitigate against traffic jams, as well.

In short, the world is on the cusp of a transportation revolution as profound as the one started by the invention of the internal combustion engine.

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