The autonomous car: a socioeconomic change on the horizon

Self driving car
The benefits of driverless cars will outweigh the risks

Was it not Captain Kirk's crew in Star Trek that with a press of a button travelled across the cosmos? The new driverless cars may not have developed to that degree, but they will soon be able to take us across town, without the stress of manoeuvring through traffic, the need for mental alertness and engagement of any road rage. The autonomously driven car has hardly come out of the left field – aspects of technology have been incorporated into our vehicles for the past decade, from cruise control to the new cornering headlight system.

I find the possibilities unimaginably exciting. Technology has developed to ease so many aspects of our daily life, why not take away the strain of commuting and allow us to be more efficient with our time and energy?

Big money

The driverless car has broad implications for society and the economy. It is being estimated that the car will generate $2 trillion (around £1.3 trillion, AU$2.4 trillion) in revenue and this is just a rough estimate that is afloat in the business stratosphere. The sums of money involved may be staggering at first glance, but it is the prospect of safeguarding human life which must first be given due credit.

The most astounding potential benefits of the driverless car will be to human life, both in mortality and quality. One of the most commonly quoted statistics is that one is more likely to die in an automobile accident than in a plane crash, which is indicative of how frequent deaths are in road accidents.

Lives saved

The driverless car will be able to take away the element of human error; no longer will fatigue, absent-mindedness, blind-spots or sudden mistakes cause deaths and injuries. This car brings the promise of saving tens of thousands of lives and reducing other injuries and road accident related losses. Those possibilities are not to be sniffed at.

The autonomously driven car also holds the potential of improving quality of life, as a large part of people's lives is spent commuting. A very large advantage in the consumer's day-to-day life will be the reduction of wasted commuting time which will subsequently relieve congestion and allow cars to go faster, operate closer together and choose much more efficient routes.

The autonomously driven car can make the ownership of an automobile much more democratic. Often a car is a person's second largest capital expenditure after a home, and this financial burden in theory could be a thing of the past with the ability of an autonomous car being able to get to those who need it without a driver. It could be shared by multiple people, by delivering itself when and where needed, parking itself remotely when not in use.

Auto revolution

From a business standpoint this car will have unsettling (revolutionary) effects on the automobile industry. As with a lot of transformative technology there are bound to be slashes in revenue for all sorts of entities, from the car makers to the car dealers to auto insurers, from health insurers to oil companies and on and on.

This change is analogous to the historic change that took place at the inception of the car, or what was originally referred to as the 'horseless carriage'. The dramatic decline of the horse breeder's business is analogous to what can be expected to happen. This is a sign of the turning point in the automobile industry.

As disruptive as this new technology will be to some of the aforementioned services, it will also be an opportunity for the reconceptualisation of cars and car-related business models. One of the largest of these will be afforded to the insurance industry. The safety repercussions will drastically impact on premiums, which are derived from the frequency and severity of accidents. The reduction of accidents may cause the companies to suffer losses in the immediate future, but this will be balanced out with the new opportunities that new ownership and liability models in relation to driverless car will present.

The compound ownership of the vehicle may make each car ride individually insurable, with live auctions for insuring each ride. Car rides will then be insured on different parameters i.e. weather conditions, time of day, choice of route, similar to flight price comparison sites. This will make the market more competitive and the efficiencies will pass on to the customer. The insurer will also see the liability model invert since the liability is dependent more on the driving skills of the car than the owner. The insurance companies will have to acquaint themselves with the new customer, the manufacturer itself.

Smart car

The car manufacturing industry will see their support business change. The use of the car will change and this will give rise to different services which can be provided within the car, and will come in the form of apps. Like the smartphone, which was originally intended only for people to communicate with, the autonomous car will have more functionality. Apps will be seen as a brilliant development tool which will increase utility, by providing the functions of a personal computer and office, or as an entertainment pod. These possibilities will further evolve the car into a platform for these apps and different functions, like the smartphone.

New technology, like any new ideology, creates debate. It will be through the use of the new technology in everyday life that we will see the benefits and risks. It is the driverless car's benefits that I believe will outweigh the risk, and that risk can be mitigated with development in any event. In the case of the autonomous car I am almost certain all risks will be outweighed by the potential to save tens of thousands of lives.

  • Sahar Bickford-Smith is an international commercial and corporate lawyer who has worked in the US and practised as a lawyer in Pakistan and London.