The night before my talk for the Texas Transportation forum in Austin, Texas, my wife and I were involved in a car accident. Since Uber and Lyft no longer operate in Austin, we were riding in the back of a Ride Austin vehicle.
No was seriously hurt, but it occurred to me later that a huge portion of today’s cars are designed around mitigating damage from accidents. Everything from seatbelts, to airbags, child car seats, headrests, bumpers, and headlights are all designed to improve safety and reduce the cost and liability of car accidents.
As a point of comparison, we don’t plan for accidents on elevators and escalators. There are no seat belts on elevators.
It’s time once again for the “Running of the Roses” Northern Colorado style. RBC Wealth Management’s Down & Derby Party is scheduled from 2p-6p at The Big Red Barn at Highland Meadows Saturday, May 5, 2018. Win a trip to the 2019 Kentucky Derby!
The logical next question is, how much of this goes away as we enter into the driverless car era?
Yes, it’ll be a messy transition period, and we will only see a relatively small amount of change while there are still human drivers on the roads. But once we develop fully automated transportation systems, will we still need all these safety features?
Here are my predictions for what autonomous cars has in store for us.
1. Life expectancy of autonomous vehicles will be less than 1 year
Autonomous cars will wear out in as little as 9-10 months. A single car could easily average 1,000 miles a day when used by multiple occupants over the course of the day. In 10 months, that’s 300,000 miles. Cars today are only in use 4 percent of the day An electric autonomous vehicle could be operating as much as 20 hours a day. That still leaves plenty of time for recharging, cleaning, and maintenance.
2. One autonomous car will replace 30 traditional cars
There are roughly 258 million registered cars in the U.S. and replacing them will be a long drawn out process. But here’s what most people don’t understand. One autonomous vehicle that can be summoned from a local fleet will replace 30 traditional cars.
For a city of 2 million people, a fleet of 30,000 autonomous vehicles will displace 50 percent of peak commuter traffic.
3. Less than 4 million autonomous cars will replace 50 percent of all commuter traffic
With roughly 250 million people in the U.S. living in urban communities, 3.75 million autonomous vehicles will handle 50 percent of peak commuter traffic in the country.
That means 4 million autonomous vehicles will replace our need for half of all cars, or roughly 129 million vehicles. This makes a serious dent in traditional car sales.
4. Fleet owners will become the primary influencers on the design of new cars
The thinking of large fleet owners will dominate the autonomous car market. Their focus will be on vehicle costs, repair records, maintenance, cleaning expenses, and operational efficiencies.
5. Driverless cars will be electric vehicles
As battery life improves and recharging stations become more automated, the demand for electric vehicles will jump exponentially. However, large fleet owners will only choose electric cars if they are easier to maintain, more reliable, and cost efficient.
6. Electric vehicle range will exceed 1,000 miles per charge by 2027
Even though Elon Musk has predicted a 600-mile range for Tesla cars in 2017, their latest models only get about half of that. The need for far greater distances will be driven by fleet owners who will view range as a primary purchase consideration. Electric vehicles will routinely pass 1,000 miles on a single charge within 10 years.
7. Noise levels in cities will be cut in half
The shift to electric vehicles will dramatically change the sound of a city. Rumbling engines, smelly exhaust clouds, and loud revving noises will all fade into distant memories.
8. 80 percent of driverless cars will be one-passenger vehicles
Since 76 percent of cars on the road only have one person in them, and since one-person vehicles will be cheaper, over 80 percent of autonomous fleets will be designed around single passenger occupancy.
9. 40 percent of sales tax will disappear
Roughly 40 percent of state and local sales tax comes from auto sales. With the current rules all cars in a fleet will be exempt from sales tax.
10. Over 10 percent of retail businesses will disappear
Over 10 percent of today’s retail businesses are connected with cars. As personal ownership of cars begins to shrink, we will see a rapid decline in gas stations, car washes, oil change businesses, tire shops, etc. Dealerships themselves will also disappear.
11. Police departments will shrink by 80 percent
In most U.S. cities, 80 percent of police departments are dedicated to traffic control. Without DUI fines, speeding tickets, and parking fees, most police departments will be trimmed to a bare minimum.
12. U.S. will lose over $35 billion/year from gas taxes
Electric vehicles won’t pay gas taxes.
13. 41 percent of airport revenues will disappear
According to the Airports Council International-North America, 41 percent of airport revenue in the U.S. comes from parking and ground transportation services. Virtually all of this will disappear.
14. Cities will lose over 50 percent of their revenue
When we combine the loss of sales tax, retail stores, income from traffic violations, gas tax, vehicle licensing, parking meters, and parking garages, the total loss of revenue to a city becomes a very large number. They will undoubtedly develop new taxes.
15. Healthcare industry will lose over $500 billion per year
The National Safety Council estimates 38,300 people were killed and 4.4 million injured on U.S. roads in 2015. Driverless cars have the potential to push those numbers nearly to zero.
16. There will be 700,000 fewer stolen vehicles per year
In 2015, 707,758 motor vehicles were reported stolen. Autonomous cars will not be “stealable.”
17. Auto insurance industry will lose over $150 billion a year
According to KPMG, accidents will decline 80 percent by 2040 due to safer cars and autonomous transportation.
18. Location no longer matters
In the past, being in business was all about “location, location, location.” However, as the driverless world evolves, passengers will become much more involved in working, watching movies, and playing games throughout the commute. It will be far easier to just ask your car to take you to whatever store or business you want to go to.
19. Remodeling garages in people’s homes will soon become a thriving industry
As car ownership declines, garages will no longer be needed as a place to park your car.
A nicely remodeled garage, set up as a separate living unit, could add as much as $1,500-$2,000 a month in rent payments, as an AirBNB rental, to the average homeowner’s income.
20. Over 5 million acres of parking lots will suddenly come available
We have an amazing amount of land dedicated to parking — over 5 million acres to be precise. Demand for parking will begin to dwindle over the coming decades and this property will be sold as prime real estate for redevelopment.
21. Overall transportation costs will shrink by 50 percent
According to AAA 2015 study, the average person spends $8,698 a year on their car that averages 15,000 miles per year. That works out to $725 a month. For autonomous vehicles, projected annual spending on transportation will be far less — $4,200 (.28/mile X 15,000 miles) or $350/month.
22. Car ownership will soon become a very expensive hobby
Autonomous vehicles will cause car ownership to evolve from a necessity to a luxury.
As dealerships and gas stations begin to dwindle, the overall cost of owning and maintaining a car will begin to ratchet upward.
23. Driverless technologies will cause 1 in 4 jobs to disappear
Over the next 2-3 decades, driverless technologies will be either directly or indirectly responsible for the loss of 25 percent of all of today’s jobs. Virtually every aspect of society, in every country around the world, will be touched by driverless technologies, and the vast majority of it is destined to improve our global standard of living.
Job losses will be offset by job creation.
In the future, our cars will know far more about us than we know about them. Each new vehicle will instantly know how to adjust the seats, what music we like, our favorite TV shows and where we left off in the latest series. It will also understand where we’re going, letting those we’re meeting with know when we will arrive.
Driverless technology will be applied to cars, tractors, trucks, ships, lawnmowers, forklifts, water taxis, snowplows, submarines, drones, trains, and even airplanes. It will soon touch the lives of every person on planet earth.
Just as wealthy people today enjoy the status of driving a more expensive car, not all driverless vehicles will serve the same utilitarian function. Richer people will pay to “arrive in style,” and will expect to have premier access to buildings. In much the same way hotels often greet their elite guests with teams of people waiting on their arrival, retail stores will find unusual ways to greet their most prominent customers and make them feel welcome.
Thomas Frey is a futurist who operates the DaVinci Institute in Louisville. More commentary from Frey can be found at https://www.futuristspeaker.com