Economic Impact of Self-Driving Cars
A truly disruptive technology not only changes the way that people think but also the way they operate. — Unknown
Self-driving technology is inevitable. Many studies show that by 2030, there will be at least 21 million driverless cars on the road in the US and 27 million in Europe.
Self-driving cars are the natural extension of active safety and obviously something we think we should do.
— Elon Musk
Technology disruption has a direct correlation with economic impact. Every big automobile company is trying to win the autonomous race.
I wrote detailed articles to find out the top driverless companies in the world, here and here.
Change is certain for growth. If the more prominent auto players choose not to be a part of the electrification it will be detrimental to their growth in the long run.
Why self-driving technology?
We know that driverless cars will be able to resolve many major issues: passenger safety (96% less severe accidents), convenience, cost reduction at a commercial level, more time while commuting, etc.
This will also boost productivity in the future.
I am a firm believer in the technological advance future. Self-driving technology will disrupt many conventional industries. The probability is very high to wipe out the existing automobile infrastructure. I think the following 5 areas will have a massive impact because of self-driving technology.
5- The hospitality industry
With self-driving cars, fewer people will feel the need to rent a hotel room. Many individuals would prefer to spend the night in their automobiles.
After all, they will feel safer and not have to pay anything. Furthermore, more inventive interior designs of self-driving vehicles will boost comfortability, making automobiles more appealing places to spend the night.
Recently, a Toronto-based company, Aprilli Design Studio, revealed plans to build mobile suites within self-driving vehicles. That will help to keep moving while sleeping at multiple destinations.
4- The insurance industry
Self-driving technology will disrupt the $300+ billion industry. The cost of insurance will drastically change due to the innovation. Driverless technology will eliminate the liability factor.
According to National Highway Transportation Safety Administration (NHTSA) data, 96% of auto accidents occur because of human error.
Self-driving cars will eliminate human error. Technology can fail, but the chances are less than 4%. The insurance sector will be impacted massively because of the elimination of auto accidents.
3- Legal profession
Driverless technology will directly impact the injury and accidents lawyers. From the previous point, we can see that emerging technology will eliminate human error(96%).
More than 75,000 attorneys earn a living from personal injury lawsuits in the United States alone, representing around 6% of the total number of attorneys in the nation. Because of the reduced likelihood of an accident, many of these lawyers may be out of a job.
For example, car collisions accounted for around 35% of all civil accident trials in 2005, but not so with autonomous cars because none of them would feature.
2- Disruption in real estate & parking tickets
Self-driving cars will disrupt the parking spaces. There will be less revenue generated from the sales of parking scares in the cities. Cars will pick and drop.
For example, the driverless car will drop the passenger at the office and then leave for the home garage without any assistance or extra burden.
1- Auto repair industry
With sensors, radars, and other sophisticated technologies, autonomous automobiles would virtually eliminate the numerous accidents that other conventional cars would have encountered.
This might also significantly impact the auto-parts sector, as there would be less need for new parts.
For example, the car-repair industry gained over $76 billion in 2010 alone from selling auto parts. The introduction of self-driving automobiles would imply that a considerable portion of this money would be lost to the economy.
The bottom line
The economic disruption caused by self-driving automobiles has already begun. Our cities, culture, and way of life are all based around the vehicle.
Almost every industry that relies on the transportation sector for a living and those industries that are not directly dependent on the transportation sector would bear the damage.
Companies would have to develop innovative techniques to stay afloat to survive the upcoming disruption that self-driving technology will bring.
For job security, government authorities and auto industry leaders must also devise strategies for mitigating the economic disruption caused by self-driving cars.
Thank you for reading; follow me, clap a couple of times, and subscribe.
To get access to unlimited stories, you can also consider signing up to become a Medium member for just $5. If you sign up using my link, I’ll receive a small commission (at no extra cost to you). Thank you a million times!
