7 Wonders of the Driverless Future

Arthur C. Clarke, who knew a thing or two about futuristic technology, observed, “Any sufficiently advanced technology is indistinguishable from magic.” His observation certainly applies to driverless cars.

In a recent Forbes article, I made the case that strategists, policy makers, regulators, and other stakeholders needed to exercise “patient urgency” in balancing the hope and fear inspired by driverless cars.

It is worth highlighting the hope—in the form of the seven huge societal benefits that driverless cars would deliver. It is a magical list.

1.  Reduce injuries and deaths

Americans were in more than 6 million police-reported car crashes in 2014. As a result, over 2.3 million individuals suffered serious injuries and 32,675 were killed. Worldwide, over 50 million people are injured each year and more than 1.2 million are killed. Globally, road traffic crashes are a leading cause of death among young people, and the main cause of death among those aged 15–29 years.

Human error caused more than 90 percent of those crashes and, in recent years, accident and fatality rates have gone up—due in large part to distracted driving.

Driverless cars, which promise to see better and react faster than humans while never getting sleepy, drunk or distracted, offer the possibility of dramatically reducing driver error and the resultant human suffering.

Consider the relative magnitude of success: A 25 percent reduction in auto-accident-induced fatalities would save more lives than curing Leukemia; a 75 percent reduction would save more lives than eliminating suicide.

2.  Lower accident-inflicted costs

The economic cost of driver error is also horrific. NHTSA estimated in 2010 that vehicle accidents inflicted $242 billion in economic costs (medical costs, property damage, lost productivity, legal and court costs, emergency service costs, insurance administration costs, congestion costs, and workplace losses). The total cost rises to $836 billion when the impact to quality of life is taken into account. Globally, the World Health Organization estimates that 3% of GDP is lost to road traffic deaths and injuries.

These costs are inflicted not just on those involved but also on society as a whole. Each year, in the U.S., more than $218 billion is spent on auto insurance premiums. Motor vehicle accidents also make up one of the largest categories of disability and workman’s compensation claims. Worldwide, approximately $700 billion is spent on auto insurance.

3.  Reduce resource consumption

Driverless cars offer the hope of tremendous savings beyond the high price of accidents. Donald Shoup estimates that 30% of urban center traffic is due to drivers looking for parking. Driverless cars could deliver their passengers to their destination and drive away, eliminating the need to hunt for parking or walk back to the office.

Morgan Stanley estimates that avoiding congestion due to the hunt for parking could translate into $11 billion in fuel savings across the US each year. This $11 billion is the smallest category of efficiency and accident cost avoidance delivered by this technology. By Morgan Stanley’s estimate, the total savings in the US could up to $1.3 trillion dollars.

4.  Reduce transportation cost

Driverless cars could enable driverless taxi services at prices much lower than individual car ownership or human-driven car services. KPMG, for example, estimates that such services could cost 48 percent less than the cost of individual car ownership on a cost-per-mile basis—while also eliminating the high upfront cost and the time required for maintenance and regulatory compliance.

Similarly, in a study at Columbia University’s Earth Institute, Larry Burns and William Jordon estimate that driverless taxis would offer 90% savings over human-driven car services.

Considering that the average American household spends 19% of income on transportation (the largest category after housing), these cost savings will make a tangible difference in every American’s life.

5.  Enhance quality of life

The reduced cost of mobility coupled with the availability of high quality, on-demand point-to-point transportation would enhance freedom, independence and self-reliance for many seniors and people with disabilities. It would also reduce the substantial burden on the individual, family, and community caregivers.

An estimated 8.4 million seniors in the US cannot drive. As baby boomers age, the number of seniors is expected to grow quickly, effectively doubling from 43 million in 2012 to 82.3 million in 2040.

12% of the roughly 50 million Americans with disabilities report difficulty getting the transportation that they need, with the reason cited most often being no or limited public transportation.

Those who could otherwise drive would benefit as well, through increased productivity and reduced stress as chauffeured passengers instead of drivers. The typical American commuter, for example, could use their 50-minute daily commute for in-car work and leisure rather than having to focus on driving. For America’s 120 million workers, that adds up to 6 billion minutes per day.

6.  Increase economic mobility

For the poor and economically disadvantaged, more affordable mobility would enable increased economic mobility by allowing faster and cheaper transportation to jobs in a wider geographical region—especially to those areas not well served by public transportation.

A longitudinal study conducted by Raj Chetty and Nathaniel Hendren at Harvard has shown that commuting time is the most important factor to the odds of escaping poverty. New York University’s Rudin Center for Transportation conducted a study that came to a similar conclusion.

Autonomous vehicles would not only give disadvantaged Americans access to better job opportunities, but also better access to schools, stores, and services.

7.  Accelerate Vehicle Electrification

92% of American transportation is dependent on petroleum. Not only does burning this fuel create pollution, but it also makes America dependent on foreign suppliers.

Autonomous vehicles offer a remedy, since they will in most cases be electric. There is a virtuous cycle in which autonomous vehicles lead to vehicle sharing which in turn leads to high vehicle utilization, favoring the low marginal cost of electric vehicles. This would not only cut emissions and pollution from vehicles, but also dramatically cut petroleum dependency.

* * *

As I’ve previously acknowledged, a vast number of technical and implementation challenges have to be overcome before these societal benefits can be reaped. World-class engineers and scientists stand on either side of the question about whether these challenges can be adequately addressed.

Arthur C. Clarke was one of the believers. Clarke predicted in 1962 that “the automobile of the day-after-tomorrow will not be driven by its owner, but by itself.”

More generally, Clarke also had something to say about seemingly impossible challenges. He observed, “The only way of discovering the limits of the possible is to venture a little way past them into the impossible.”

As to the arguments of world-class engineers and scientists, Clarke had this to offer:

When a distinguished but elderly scientist states that something is possible, he is almost certainly right. When he states that something is impossible, he is very probably wrong.

Let’s hope that the distinguished Arthur C. Clarke was right.

(H/T to Steffen Wettengl for pointing out the Clarke prediction, and for the photo mash up.)

See also my post on the 7 ways that driverless cars might fail:

For a list of my other articles on driverless cars, see “Primers On The Business Innovation And Disruption Enabled By Driverless Cars.”

Chunka Mui is a business advisor and author of three books on strategy and innovation including, most recently, The New Killer Apps: How Large Companies Can Out-Innovate Start-Ups.  Follow him here at LinkedIn, and also at Forbes and Twitter.  This article was drawn from one originally published at Forbes.