The future of self-driving cars
By: Giuliano Giacaglia
Tags: Self Driving Cars, Elon Musk, Boring Company

But the worries about operator less elevators were quite similar to the concerns we hear today about driverless cars. — Garry Kasparov

There is a lot of talk about self-driving cars and how they will one day replace truck drivers, and they say that the transition will happen all of a sudden. In fact, the change will happen in steps, and it will start in a few locations and will expand rapidly. For example, Tesla is releasing software updates that make their car more and more autonomous. It first started releasing software that let its cars drive on highways, and then with a software update, its cars were able to merge into traffic and change lanes. Waymo is now testing its self-driving cars in downtown Phoenix. But it might not be surprising if Waymo starts rolling out their service in other areas.

The industry talks about five levels of autonomy to compare different car systems. Level 0 is when the driver is completely in control, and Level 5 is when the car drives itself and does not need driver assistance. The other levels range between these two. I am not going to delve into the details of each level because the boundaries are blurry at best, and I prefer to use other ways to compare them. As the systems improve, autonomous cars can prevent humans from making mistakes and help avoid accidents caused by other drivers.

Self-driving cars will reduce and nearly eliminate the number of car accidents, which kill around 1 million people globally every year. Already, the number of annual deaths per billion miles decreased due to safety features and improvements in the design of vehicles, like the introduction of seatbelts and airbags. Cars are now more likely to incur the damage and absorb the impact from an accident, reducing the injuries to passengers.

Number of miles driven by cars versus the number of annual deaths per billion miles driven

Autonomy will reduce the total number of accidents and deaths. In the United States alone, around 13 million collisions occur, of which 1.7 million caused injuries, and 35,000 people died. Driver error caused approximately 90% of the accidents, a third of which involved alcohol. Autonomy can help prevent these disasters.

Deaths are not the only problem caused by accidents. They also have a huge economic effect. The U.S. Government estimates a cost of about $240 billion per year on the economy, including medical expenses, legal services, and property damage. In comparison, U.S. car sales are around $600 billion per year. According to data by the U.S. National Highway Traffic Safety Administration (NHTSA), Tesla cars reduced their crash rate by 40% after the introduction of the Autopilot Autosteer¹ feature. An insurer offered a 5% discount for Tesla drivers with the assist feature turned on.²

Autonomy will have an effect on traffic overall. Cars will not necessarily need to stop at traffic signs because they can coordinate among themselves what is the best route or safely drive at 80 miles per hour 2 feet away from each other. So, the flow will improve, allowing more cars on the streets. With fewer accidents, there might be less traffic congestion. Estimates say that as much as a third of congestion happens because of car accidents, and these create even more congestion. The impact remains unclear since, to my knowledge, no studies exist yet. Self-driving cars will certainly increase capacity, but as the volume increases, so does demand. If it becomes cheaper or easier for people to drive, then the number of people who use them will escalate.

Parking will also transform with autonomy because if the car does not have to wait for you within walking distance, then it can do something else when people do not need it. The current parking model is a source of congestion with some studies suggesting that a double-digit percentage of traffic in dense urban areas comes from people driving around looking for parking places. An autonomous car can wait somewhere else, and an on-demand car can simply drop you off and go pick up other passengers. But this new model might also create congestion because in both cases, the cars need to go pick up people. With enough density, the on-demand car might be the one that is already dropping off someone else who is close by you, similar to Uber’s model.

Parking is not only important for traffic but also for the use of land. Some parking is on-street, so removing it adds capacity for other cars driving or more space for people to walk. For example, parking in incorporated Los Angeles County takes up approximately 14% of the land. Adding parking lots and garages is expensive, driving up construction prices and housing expenses. A study in Oakland, California showed that government-mandated parking requirements increased construction costs per apartment by 18%.

Removing the cost of drivers from on-demand services, like Uber and Lyft, reduces the expenditure by around three quarters. Factor in the reduced price of insurance because of fewer car accidents, and the cost goes down even further. Transportation as a Service is the new business model.³

Transportation as a Service

Transportation as a Service (TaaS), also referred to as Mobility as a Service (MaaS)⁴, will disrupt not only the transportation industry but also the oil industry with the addition of electric vehicles (EV). TaaS goes hand in hand with EVs. Electric cars are much less expensive to maintain because, for one, their induction motors have fewer moving parts than the internal combustion engines (ICE) of gas-powered cars⁵. For autonomous vehicles in the TaaS sector, low maintenance costs are essential as car rental companies know pretty well.

The average American family spends $9,000 on road transportation every year. Estimates are that they will save more than $5,600 per year in transportation costs with TaaS, leaving them to use that money in other areas like entertainment. Truly cheap, on-demand services will have even more consequences. As TaaS with self-driving cars becomes cheaper, we must rethink public transportation. If everyone uses on-demand services, then no one will need public transportation.

Adding all the people who were moving through the subway system to cars above ground can increase congestion of the roads. In high-density areas, like New York City, people live in stacked buildings on different floors. If everyone needs to move at the same time, such as during rush hour, and go through only one “floor,” meaning the road above ground , then congestion will invariably happen. Therefore, a need exists for self-driving vehicles to move around in a manner not dependent on only going through the roads above ground. Autonomous vehicles should travel through many levels. Currently, subways go underground.

Kitty Hawk’s first prototype of its flying car

One possibility is self-driving drones, something like a Jetsonian future. Kitty Hawk Corporation, a startup developed by Sebastian Thrun, already has a few prototypes of these flying cars. Some argue that this solution might not work inside highly dense areas because these drones produce too much noise. And if they fail and crash, they can damage property or humans. The most recent prototype, however, is not as noisy as some claim. From a distance of 50 feet, these vehicles sound like a lawnmower and from 250 feet like a loud conversation. And, their design is such that if the motor or one of the blades fail, they will not fall to the ground.

Another possibility for adding more levels for on-demand vehicles is to add them under the ground, i.e., creating tunnels. But creating tunnels is a huge financial and construction investment. Elon Musk’s Boring Company focuses on reducing the cost of tunneling by a factor of 10 by narrowing the tunnel diameter as well as increasing the speed of the Tunnel Boring Machine (TBM). Their goal is to make them as fast as a snail. Musk thinks that going underground is safer than flying vehicles and provides more capacity by adding more tunnels on different levels. The Boring Company is already developing one for the city of Chicago so that people can travel from the Chicago O’Hare Airport to downtown.

TaaS will have a direct impact on the driving industry as well as employment. In the U.S. alone, self-driving cars will impact around 200,000 taxi and private drivers and 1.5 million long-haul truck drivers. Displacing truck drivers, in particular, will significantly impact the economy since truck drivers are the largest profession in the United States.

Given that during peak hours of driving only 10% of the cars are in motion means that there will be fewer cars and could affect production numbers. Over 10 million new cars are sold in the U.S. market every year. With fewer needed for the same capacity, the total number introduced to the market might go down. Also, the cost of transportation will decline by a large factor because you need fewer resources to make them. Using TaaS will be much cheaper than owning a car because of the reduced usage as well as the fuel and maintenance savings when using EVs for autonomous driving.

Switching to TaaS is easy and requires no investment or contract, so I believe that the adoption rate will be high⁶. And as consumers’ comfort levels rise due to increased safety and less hassle, usage will spread. First, the switch will occur in high-density areas with high real-estate values, like San Francisco and New York, and then it will spread to rural, less dense areas.

Cost difference of autonomous EV cars versus ICE cars

As this shift occurs, fewer people will buy new cars, resulting in a decline in car production. We already see this trend with young adults who use car-sharing services in cities and do not buy vehicles. According to one study, young people drove 23% less between 2001 and 2009. The car types that people drive will change over time as well. If you move to the city, you might not need an F-150 but rather a much smaller car. Or, if you relocate from one highly dense area to another, it might make sense to have autonomous vehicles that transport more than 10 passengers at a time.

Percentage of drivers for different age groups

The availability of on-demand, door-to-door transport via TaaS vehicles will improve the mobility of those unable to drive or cannot afford to own a car. Because the cost of transportation will go down, more people will travel with cars. Experiments with TaaS already exist in different areas of the U.S. For example, Voyage, a Silicon Valley startup, deployed cars with “remote” drivers that run its software in The Villages in Florida, a massive retirement community with 125,000 residents. Voyage is already experimenting with what will become mainstream in a few years. Residents of the retirement community summon a car with a phone app, and the driver-less car picks them up and drops them anywhere inside this community. The vehicles are monitored by workers who check for any problems from a control center. Transportation will completely change in the next decade and so will cities. Hopefully, governments will ease the transition.

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