Thursday, 20 October 2016

The Massive Impact of Driverless Cars, Blog 1.

Paul Sweeney: A few weeks ago, Uber introduced the first driverless cars on the road: a self-driving taxi fleet in Pittsburgh. Uber, partnered with Volvo, Google, Tesla, Volkswagen, Ford and GM are all investing heavily in driverless cars.

Car makers are teaming up with tech firms in their development. GM recently invested $500 million in Lyft, a competitor of Uber, which is also developing driverless cars. GM is anticipating continuing dropping car sales but sees a future in the provision of cars for the ride-hailing services. Google’s driverless cars have been driving around California for years.

Driverless car: Photo credit Department of Transport

About 15 years ago, sitting in a bus driving up and down the skyways running over the vast car park in LAX (Los Angeles airport) I was struck by the number of parked cars not being used, idle for weeks.

If you scale that up by all the cars sitting in driveways and other car parks around the world, it is a staggering number. And it demonstrates the gross inefficient use of an expensive resource. In fact, the Economist (1 July 2015) estimated that cars are unused for 96 per cent of the time. 92 million Vehicles Produced in 2015.

A car is the second largest purchase for most people and its use is growing. Some say that we have reached peak car, but the manufacture of cars has never been as high as it is today. China is now the biggest producer, followed by Europe and North America. 73.5 million passenger cars were produced globally in 2015, up from 50 million in 2004.

On top of that, 18.1 million commercial vehicles were manufactured worldwide in 2015. That is also up - from 15 million in 2004. The EU produced 18.4 million motor vehicles in 2015, 23% of the 91.6 million motor vehicles produced globally. The EU exported 6.2 million vehicles in 2015, which generated a net trade surplus of €100.4 billion.

The production of autos is important. Peak car production was reached in Europe in 2006, but China is making up for the drop in production here. It is possible that demand will peak in Asia but not for a few years. In Europe the average number of cars per 1000 people is 500, that is one car for every two people. Ownership peaks at 678 in little Luxembourg and is 409 in Ireland.

Employment in Automotive Sector Some 12.2 million people, or 5.6% of the EU employed population, work in the broad automotive sector. Of those, 3 million work in manufacturing. The rest are in sales, transport etc.

That is almost 6% of those at work in Europe.Of those 3 million in manufacturing, the largest number, 815,000 work in Germany, the largest employer. Ireland has 2510 in manufacturing (European Automobile Manufacturers Assoc). Many more work in other areas of the broad automotive sector.

So what happens when we have driverless cars? 

When we have safe, accessible and cheaper driverless cars, it will have major impacts on many areas of the economy and society. Driverless cars will have massive impacts on:
  • manufacturing 
  • employment in manufacturing and other areas of the automotive sector such as car sales, 
  • taxi drivers, bus and train drivers, car servicing, car hire 
  • road safety and the huge number of road deaths and injuries every year
  • insurance costs the urban landscape and street use 
  • climate and the environment 
  • personal mobility
  • social interaction the economy overall.

When will driverless cars be a reality? 

They are here already, but safe, fully automated, driverless cars may be in mass use in ten years, by 2026. This is forecast by some. For example, the CEO of Ford said autonomous cars will be rolled out by 2020. Other car companies would add five years.

Google, whose cars have done over 2 million kilometres test miles on public roads, had promised 2018, but others think the 2030s is more feasible. Andrew Ng, the chief scientist of the Chinese search engine Baidu thinks that self-driving cars will be in mass-production by 2021 and the US Secretary of Transportation claimed at the 2015 Frankfurt Auto show that he expects driverless cars to be in mass use by 2025.

So it will be between 2020 and 2030 when they hit the mass market. Nissan boss Ghosn forecasts mass production beginning by 2020.

The Institute of Electrical and Electronics Engineers forecast that up to 75% of all vehicles will be autonomous by 2040. Executives in Intel, Continental, Daimler, Jaguar, Land Rover and VW all forecast similar timelines at between 2025 and 2030 for mass production and use.

Why would anyone, but the wealthy and those who are defined by the car they drive, buy a car, when they could call for one and it is outside in a few minutes; with no worry about parking; after it drops you?

And perhaps at a fraction of the cost of ownership? If there is a strong move to driverless cars, its impact will be revolutionary. In the next blog, I will look at each of the eight impacts listed above in more detail.

Paul Sweeney is Chair of TASC's Economists' Network. 

Key Words: Driverless cars, Uber, Google, manufacturing, environment.


Rory O'Farrell said...
This comment has been removed by the author.
Rory O'Farrell said...

I wonder what share of taxi journeys have just one or two passengers? Instead of a taxi being a 5 door, we could have lots of little Fiat 500 type cars for just two passengers. And because they are smaller they could easily be powered by electricity and take up less space.

Maybe Ireland should offer rural roads as a test area? It should be a boon for rural pubs if your car was its own designated driver.

Also as a huge amount of the pollution of cars is from their maunfacture, more intensively using less cars should be good for the environment.

There'll need to be retraining for taxi drivers though.

(I'm just noticing that to post this I must click on something to prove I'm not a robot.)


Rory u r not aRobot!
Interesting comment on impact on rural areas. It's not just pubs but increased mobility for low income dwellers, tho we can't tell what the real impact will be yet. That's what intrigues me on the issue.

Hugh Brennan said...

Ah yes indeed, it will be nothing short of a revolution, a revolution I tell you and sooner than you think, delayed only by Trumpism.
They used to say 'don't put your daughter on the stage Mrs Worthington'; well I say don't let your daughter or son work as a driver Mrs. Worthington; because, a lot sooner than you think, there will be no driving jobs - no bus drivers - no train drivers - no tram drivers - no HGV drivers - no taxi drivers.
A truck will load up in Dublin and travel autonomously, mainly using LIDAR and loads of other technology, to say Milan on battery power (available now) and without any rest stops or Pee stops and unload and carry on to Prague or Moscow, safely and cleanly!
I will walk out of my house in rural Ireland, 2 miles away from my local pub at 8:00 pm and using my smart phone I will call my car or more probably a shared car or an unmanned JHR* taxi and 'tell' it to bring me to my local. I will consume 4 Pints and two small ones and use my phone to call a car and it will take me safely back to my home, again using LIDAR and a host of other technologies. My buddy who is a Luddite, and still drives himself, will join me but just for one coke, that's all he can afford because he pays 'non autonomous' car insurance and it costs him a fortune and the 'alco-detect' in his car wouldn't let him start it if he even had 'just the one'. The kids, interestingly, will go to school in a driverless school bus but they will have a minder - probably human and probably an asst. teacher or the SNA. I won't need to own a car as I can 'call' one at anytime day or night and it will arrive in less than 5 mins - even on match day and car efficiency will increase to say 60%.
The D O'Bs of this world will own pools of cars and we will 'pay per journey' or I might own our own. Cars will go automatically to a charging station when necessary and if a journey has to be interrupted there will be a replacement car waiting for me/us. Traffic lights will be only for 'driven' cars cyclists and pedestrians who of course will continue to 'break the traffic laws'!! City centres will become 'Autonomous Car Zones' with 'no driven cars allowed'
All electric, all clean, all safe.
As Leonard says "I've seen the future and it's murder"
You don't believe me? Loomat the penetration of Mobile Phone Technology in 20 years and this is simple compared to that.
I tell you in 30 years our grand children will laugh at the fact that we used to drive our own cars - "did you really Grandad? But why...?"
*JHR? Jackie Healy-Rae