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The Dawn of the Self-Driving Economy

Photo by Bram Van Oost on Unsplash

Almost a century ago, campaigning for the presidency, Herbert Hoover promised “a chicken in every pot and a car in every garage.” While that campaign promise has long been fulfilled with multiple cars in nearly every household, the future is starting to look radically different. For the first time ever, the car culture that underpins American life faces obsolescence. Owning a car may go the way of the dodo bird as we turn to ride sharing services and self-driving cars.

There are few things that are more quintessentially American than owning an automobile. Mass motorization is a staple of our culture, and has shaped the design of cities around the world for nearly a century. Unless you live a few select urban centers across the USA, you probably find yourself dependent on your personal car for the vast majority of your transportation needs. Nevertheless, much has changed in the past few years, and the outlook for automobile ownership has changed radically.

No matter how culturally entrenched car ownership may seem at the moment, it is starting to unravel. Cars are no longer the mobile centerpiece of one’s economic status. According to the management consulting firm McKinsey, “millennials appear to place less importance on car ownership than previous generations do.” Millennials are also interested in living in areas with more transportation options, and are becoming quite comfortable with public transportation and ride sharing. The cultural trends are already shifting, and this doesn’t bode well for automobile manufacturers, and other industries that employ millions of people in related industries.

The most significant game-changer in auto ownership may come in the form of self-driving or autonomous cars. Millions would opt for car-sharing services instead of having their own vehicles, especially if the cars drove themselves. Autonomous cars could also eliminate the need to have multiple cars. Given that cars are parked most of the time, many would find it easier to subscribe to ride-sharing service that picked them up in a matter of minutes. Cars are also typically the second biggest line item in a family’s budget, so the savings of migrating to ride sharing would be substantial. The cost of owning an automobile is pretty steep, as it’s typically more than 5,000 dollars per year and up according to Consumer Reports.

Not surprisingly, several companies see the writing on the wall. Google, Apple, Tesla are all working on self-driving cars, and they are expected to be available to consumers in the next five to ten years. Uber’s CEO has made it crystal clear that he wants to phase out drivers in coming years, as they move to fully autonomous vehicles.

It’s hard to imagine a world with self-driving cars and widespread ridesharing. The implications are enormous for humanity. Computers would drive us around, which would mean less accidents and improved safety because most crashes are a result of human error. Traffic would be less of a problem, and fuel efficiency would radically improve with digitally navigated precision. Time spent behind the effortless automatic-wheel would also boost productivity, as people could utilize the time that was previously wasted.

On the other hand, a self-driving-shared-car-culture would have significant costs, in terms of lost revenue and employment. The car industry employs legions of people, from manufacturing to sales and service. Additionally, it’s not hard to see the massive disruptions automated vehicles would cause to the throngs of people that drive cars and trucks for a living. The economy would face a mass reorientation, and the change would destroy millions of jobs

Like all revolutions in technology, the reinvention of transportation globally is an exciting and jarring prospect. Our single biggest land use in our cities is dedicated to accommodating the space needed to park and drive personal vehicles. Considering the technological prospects and the changes that are already underway, it’s difficult to fathom what the city of the not so distant future could look like. There’s little doubt that commuting culture and suburban life will be transformed in the coming decades.

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