The Future of Self-Driving Cars

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Updated November 2, 2022

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But the worries about operatorless 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 some 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 then 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 with a later 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 cars’ systems and their capabilities. 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, such as disengagements per mile. However they are measured, 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 has decreased due to safety features and improvements in the vehicle designs, 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.

Figure: US vehicle miles traveled and proportionate mortality rate. Number of miles driven by cars versus the number of annual deaths per billion miles driven.

Autonomous driving will reduce the total number of accidents and deaths. In the United States alone, around 13 million collisions occur annually, of which 1.7 million cause injuries, and 35,000 people die. Driver error causes approximately 90% of the accidents, a third of which involve alcohol.* Autonomy can help prevent these disasters.

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

Autonomy will have an effect on traffic overall. Cars will not necessarily need to stop at traffic signs because they can coordinate among themselves to determine the best route or to safely drive at 80 miles per hour 2 feet away from each other. So, traffic 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 car accidents happen because of congestion, and these create even more congestion. The impact of autonomy on congestion 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 use self-driving cars, then the number of people who use them will escalate.

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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 rather than being parked and waiting for people to come to it. With enough density, the on-demand car might be the one that is already dropping off someone else close to you, similar to Uber’s model.

Parking is not only important for traffic but also for the use of land. Some parking is on the street, so removing it adds capacity for other cars driving or for people walking. 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 75%. 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.*

Transportation as a Service

Transportation as a service is a type of service that enables consumers to move without having to buy or own vehicles.

Transportation as a Service (TaaS), also referred to as Mobility as a Service (MaaS) or Mobility on Demand (MoD),* 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 cars.* For autonomous vehicles in the TaaS sector, low maintenance costs are essential, as car rental companies know pretty well.

The average American family spends $9K on road transportation every year. Estimates are that they will save more than $5.6K 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.

Transitioning all the people who are currently traveling through the underground subway system or elevated trains to cars on surface streets can increase congestion on 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 aboveground road system, then congestion will invariably happen. Therefore, self-driving vehicles need to be able to move around in a manner not dependent on only the surface streets. Autonomous vehicles should travel through many levels.

Figure: Kitty Hawk’s first prototype of its self-driving 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.*

controversySome 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 lawn mower, 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 go under the ground, creating tunnels. But digging tunnels is a huge financial and construction investment. Elon Musk’s Boring Company focuses on reducing the cost of tunneling by a factor of ten by narrowing the tunnel diameter as well as increasing the speed of their 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 already has a loop at the Las Vegas Convention Center.*

TaaS will have a direct impact on the driving industry as well as employment. In the United States alone, self-driving cars will impact around 200,000 taxi and private drivers and 3.5 million truck drivers.* Displacing truck drivers, in particular, will significantly impact the economy since truck driving is one of the largest professions in the United States.

Given that during peak driving hours only 10% of cars are in motion, we can expect that TaaS will result in fewer cars and that could affect production numbers. Over 10 million new cars are sold in the US 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 the cars. 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.

Once in place, switching to TaaS is easy for consumers and requires no investment or contract, so I believe that the adoption rate will be high.* 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.

Figure: 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 pickup truck but rather a much smaller car. Or, if you commute from one highly dense area to another, it might make sense to have autonomous vehicles that transport more than ten passengers at a time.

Figure: 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 who cannot afford to own a car. Because the cost of transportation will go down, more people will travel by car. Experiments with TaaS already exist in different areas of the US. For example, Voyage, a Silicon Valley startup acquired by Cruise in 2021, 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 driverless 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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