The Fuse

Keep Your Eye On The Prize Offered By Driverless Cars

April 07, 2016

Guest Post by Chunka Mui | @chunkamui

Chunka Mui is co-founder and Managing Director of The Devil’s Advocate Group and author of “The New Killer Apps: How Large Companies can Out-Innovate Start-Ups”

This piece originally appeared in Forbes on April 5, 2016.

As Google, BaiduTesla, UberGeneral Motors and others race to shift driverless cars from fantasy to reality, a host of real and imagined objections are also coming to the fore.

Will driverless cars be safe? Will they be secure? Can they coexist with human-driven cars? What are the implications for liability and accountability? Will they infringe on personal freedom and privacy? Will they destroy jobs and cause economic chaos?

These questions are serious and mandate that we approach deployment with deliberation and caution. At the same time, however, the potential benefits are so large that we must not hinder development.

Every day by which we accelerate success can be measured in lives saved (more than 100), injuries prevented (more than 6,000), and dollars better spent ($3.5 billion). And, that is just in the United States. Worldwide, the numbers are even more staggering. In addition, millions could have speedier access to more affordable transportation. Congestion, pollution and dependency on oil could be reduced.

“Context is worth 80 IQ points,” says Alan Kay. Mindfulness about the context of the societal benefits enabled by driverless cars is critical. Only then can we have a smarter, holistic view of the complex web of strategic, public policy and regulatory decisions that might help or hinder the development of this technology.

Here are seven societal benefits that driverless cars have the potential to deliver:

1. Reduce Injuries And Deaths

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.

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 offer the possibility of dramatically reducing driver error and the resultant human suffering. A 25 percent reduction in 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 percent 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, 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 percent 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 fuel savings from avoiding such congestion could translate into $11 billion in fuel savings across the U.S. each year. This $11 billion is the smallest category of efficiency and accident cost avoidance gains delivered by this technology. By Morgan Stanley’s estimate, the total savings in the U.S. due to driverless cars adds up to a total of $1.3 trillion dollars.

potential savings

4. Reduce Transportation Cost

Driverless cars would also 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 percent savings over human-driven car services.

Considering that the average American household spends 19 percent 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

12 percent 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.

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 U.S. 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 percent 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 percent 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.

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How do we balance the hope that potential benefits inspire against the caution mandated by the open questions about driverless cars?

What is needed is a strong dose of “patient urgency” on the part of policy makers and regulators. Patient urgency is the combination of foresight to prepare for a big idea, willingness to wait for the right market conditions, and agility to act straight away when conditions ripen.

Public dollars and, more importantly, policy maker and regulator attention are critically needed to facilitate industry standards, enable rigorous testing and lay the groundwork for eventual deployment.

The testing must be thoughtfully constructed to allow for robust test beds that yield the data required to make informed choices regarding deployment—while not compromising the rate of development.

Significant regulatory changes are required to clear the way for such robust testing, and to prepare for large-scale deployment. This process is beginning but needs to be prioritized.

In the U.S., that includes harmonizing the patchwork of regulatory measures being developed at state and local levels to help or hinder the technology (depending on the local political dynamics). Worldwide, regulators must reconcile an accumulation of regulations and standards aimed at human drivers and legacy technology, much of which cannot be reconciled with driverless technology.

The goal is not to deploy too soon. Instead, it is to be prepared to deploy as soon as possible after the technology is deemed ready. As previously mentioned, the value of such preparedness can be measured in significant numbers of lives saved, injuries avoided, and billions of dollars better spent.

By keeping our eye on the prize, while maintaining a clear-eyed view of the challenges, the tremendous benefits of driverless cars will be realized sooner rather than later (or not at all).

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