Highlights from Driverless Car Revolution: Buy Mobility, Not Metal by Rutt Bridges

Driverless Car Revolution: Buy Mobility, Not Metal by Rutt Bridges

  • Driverless cars, summoned using a smartphone app and arriving in 5 minutes or less, will change how we live. They will cost about 39 cents a mile for a two-passenger vehicle, a fraction of what it costs to own, insure, maintain and operate a personal vehicle.
  • By requesting a rideshare from the dispatch software, customers will be able to ride for half-price, 19 cents a mile, plus gain access to HOV lanes. The national average of 1.08 commuters per vehicle will jump, while congestion declines.
  • Instead of fighting rush-hour traffic, we will be able to read, watch the morning news, or get an early start on the workday. Just like chauffeur-driven, door-to-door service, but for less than bus fare!
  • Trillions of dollars will be saved and most people’s lives will greatly improve, but there will some disruption – better to plan and adapt!
  • Driverless cars will be far safer than any vehicle currently on the road. Unlike human drivers, they are immune to the distraction, fatigue, road rage, impatience, intoxication, and the foolish mistakes that cause 93%. Accidents will be rare, and in the U.S. alone most of the 33,000 lives now lost in car crashes every year will be saved.
  • Younger kids will use smartphones to summon a vehicle to take them to and from locations (school, soccer practice, piano lessons, whatever) pre-approved by their parents. Parents will receive a text when their children request a vehicle and when they arrive at their destination. They will independently share rides with parent-approved friends, and groups of parents will organize driverless vanpools for sports teams.
  • Over-scheduled parents will get their lives back. Politicians will be forced to stop talking about soccer moms.
  • Teenagers, only half of whom currently even bother to get a driver’s license, will continue to care less and less about owning cars. Mobility services will drive them to school and social activities, from dates to evenings out with groups of friends.
  • Parents will save lots of money on cars, insurance and car repairs.
  • Texting while driving will disappear as the leading cause of death for teenagers.
  • Testosterone-addled teenage boys will no longer drive recklessly in their parents’ cars. And an arrest – or worse – for drinking while driving will no longer be a possibility. Families won’t be destroyed by that 1 a.m. phone call.
  • While commuting, adults will safely use telephones, laptops, or tablets. Some will get a jump-start on work, others will socialize or enjoy a video. They’ll leave work on time knowing they can use their commute to wrap up a report that’s due tomorrow, and will arrive home free of a rush-hour driver’s stress. Plus, since the service is door-to-door, they won’t ever have to worry about parking, or walking in sleet, snow, or rain, and will never get another parking ticket.
  • When Grandma or Granddad decide to give up their keys, they will not be giving up anything but rather saving money while gaining greater independence. Instead of depending on their kids, they will have more freedom than ever to control their own lives. A lift to the grocery store, the golf course, or a trip to their grandkids’ soccer game will be a few button clicks away. And that means many more years of living independently in the home they love.
  • Disabled customers will enjoy on-call, door-to-door service in specialized vehicles.
  • The working poor will at last have cheap, reliable transportation, making it possible to get and hold higher-paying jobs. They will also be able to spend more time with their kids instead of wasting time transferring between buses and getting to and from the first and last bus stops.
  • Driverless cars will provide far better transit service than local buses for a fraction of the fare.
  • Those who drink alcohol will at least travel safely, without fear of the crushing financial and social damage of a DUI, and without risking death or serious injuries to themselves or their innocent victims.
  • Judges will be more likely to revoke the licenses of those who drink and drive, knowing they aren’t imposing unreasonable economic hardships on their families.
  • Unless gasoline drops below about 60 cents a gallon, these cars will mostly be electric.
  • Decreased burning of oil and increased use of solar combined with newer low-emissions natural gas generators will significantly slow climate change.
  • Eventually utility-scale energy storage systems will make solar the dominant energy source.
  • While families will save thousands of dollars a year by switching from two cars to one (or none), the auto industry will see a collapse of new car sales.
  • Cheap used cars will flood the market.
  • Since each mobility service vehicle can replace about five personal vehicles, far fewer cars will be sold and even fewer maintained. The oil industry will be hard-hit as will insurers and other major employers.
  • In his comprehensive analysis of the automotive industry, The Great Race: The Global Quest for the Car of the Future, Levi Tillemann observed, “The transition to electric and driverless cars will usher forth a step-change in both quality of life and economic productivity, and potentially be the most transformational social development since the World Wide Web. It will change the way we live and many of the fundamentals of the global economy.” This revolution is just over the horizon. It will begin within five years, and its impact will be significant within 10 years. For those who are heavily vested in the status quo and slow to change, the risk is great.
  • Only 67 companies that were on the 1955 Fortune 500 list made it to the 2011 list, and that turnover is occurring at an ever-faster pace. Like Christians in the Coliseum, companies, communities, and you would be unwise to assume you’ll be the watching from the stands.
  • Consumer Reports estimates that the median annual cost for a new car kept for five years and driven 12,000 miles per year (including an adjustment for trade-in value) is $9,100 per year. But if you also adjust for the recent decline in gas prices that number drops to $8,125 per year.
  • A private Mobility Auto would only cost $4,680 for 12,000 miles, or $2,280 if you share a ride with one other person.
  • And if you work in a major city and have to pay for parking, you’ll save an average of $2,136 (in after-tax dollars) more.
  • How would that impact your personal or family budget?   An Auto’s services can be delivered at these prices while earning a 49 percent pre-tax profit for its owners. In fact, in a more competitive environment with pre-tax profits around 25%, fees to consumers would fall to 29 cents per mile solo, and 14 cents per mile for those willing to rideshare. That is $3,480 per year and $1,680 per year respectively for 12,000 miles of service. Mobility is a compelling, win-win proposition.
  • Since driverless car liability lies with the manufacturer, auto insurance companies will be left insuring those distracted drivers who want to drive themselves. The National Association of Insurance Commissioners reported 2013 premiums for the U.S. automobile insurance sector of $207 billion.
  • There are more than 500 million parking spaces in America, enough to cover “all of Delaware and Rhode Island (Eran Ben-Joseph, MIT professor of urban planning, 2012 book, Rethinking a Lot: The Design and Culture of Parking, “In some U.S. cities, parking lots cover more than a third of the land area.”
  • Over half the 33,719 people who died in accidents in 2013 weren’t wearing seat belts. A Mobility Auto won’t move unless everyone has his seat belt buckled.
  • 93% f all crashes result from human error, led by distraction, drowsiness and alcohol. Only 2 percent of current crashes are caused by problems with the vehicles. If government wants to have an impact on safety, it should certify driverless vehicles.
  • Free community Wi-Fi service can be delivered by swarms of Auto, providing support for the many emerging “Internet of Things”
  • Shared EVs will reduce congestion, cutting costs for road expansion and repairs, and help cities and states meet clean air standards
  • Shared AV & EVs will provide affordable mobility for the elderly, improving lives and cutting the cost of nursing home care.
  • Reduce the demand on community emergency rooms Help focus traffic enforcement by identifying seriously dangerous drivers Help police identify kidnappers, terrorists, and wanted criminals Provide detailed documentation of vehicular crashes to determine who is at fault Provide real-time road hazard information to other drivers (BLACK ICE ahead on bridge!)
  • Make teenage texting in cars safe, since no known force in the universe can prevent it. Texting while driving, not alcohol, is now the leading cause of death among teenagers, according to a study by Cohen Children’s Medical Center. Not just deaths from vehicular accidents; all deaths. The Center for Disease Control reports that the percentage of teens in high school who drink and drive has actually decreased by more than half since 1991. But today, more than 3,000 teens die each year in crashes caused by texting while driving. Your words of warning too often carry little weight when your teenage son or daughter is out of your sight. Driverless cars will prevent these deaths.
  • The key: State and local government and business alliances So how does Mobility demonstrate the compelling case brought by the benefits of its driverless Autos? The only way is to create pilot projects in communities that are supportive of this new technology. Mobility will need to choose these markets carefully.
  • A study by the Eno Center for Transportation estimates that 90% adoption of driverless vehicles would result in crash cost savings of $355 billion a year plus a $47 billion a year from reduced congestion. That total savings of $400 billion a year represents about 2.4 percent of the total annual U.S. Gross Domestic Product (GDP).
  • If our economic output shrank by $400 billion due to disruptions it caused among the “losers,” there would still be no net-negative impact on our overall economy.
  • America is in a position to lead the world in driverless car technology. But if we fail to act, other countries will fill that vacuum. For example, the Chinese are buying far more cars every year than either the Americans or all of Europe. Meanwhile, Chinese crash fatalities per vehicle are almost 10 times greater than in the U.S. with 276,000 lives lost in 2010 alone.
  • China is spending 9% of its GDP on transportation and water infrastructure, while America spends 2.4 %. Chinese driverless cars could save lives and slash road-construction capital spending, plus provide China with a massive and lucrative worldwide export market.
  • Are U.S. politicians and regulatory agencies really willing to throw away this national economic opportunity? Will they take action, or, as President Kennedy said, choose “comfortable inaction”?   There are powerful demographic forces, such as an aging population that consistently votes in elections that will demand driverless cars.
  • Some say that the widespread adoption of driverless cars is not a matter of “if” but “when.” But that “when” will cost many lives. Over 30,000 unnecessary deaths will occur with every year that passes after the technology has been proven to work, or at least work better than human drivers. Yet politicians, lobbyists, and bureaucrats will continue to claim to be protecting you by blocking the way.   Other nations already lead America in the regulatory implementation of driverless cars, just as many have with commercial drones. The United Kingdom already has launched driverless car tests in four locations
  • The impact of driverless cars isn’t just about our safety and convenience. Economics will drive the use of electric vehicles for Mobility. Manufacturing of cars is critical to the economic and cultural fabric of the U.S. and other nations. According to the Center for Automotive research, over 3% of the U.S. GNP and 1.7 million jobs are directly associated with car manufacturing. The need for far fewer cars would affect not just the U.S. but also Germany, China, Japan, South Korea, and many other nations.
  • Many oil-producing nations face a far greater economic impact due to a switch from gasoline to battery power – a potentially precarious geopolitical prospect. The sustained drop in oil prices resulting from widespread use of electric vehicles could permanently cut their current tax revenue by half or more.   Can you imagine what would happen if the U.S. had to cut its government spending by half? What would happen to your retirement, your health care, national security, the nation’s credit – everything? That is a preview of what is about to happen to many nations large and small due to the late 2014 collapse of oil prices. And over the next two decades, electric vehicles could drive oil prices even lower.
  • In the next decade, zero-emissions cars will cost less to buy than regular cars and less than half as much to fuel and maintain.   According to The Economist, Saudi oil costs only about $6 a barrel to produce, but within 20 years it could be worth only a small fraction of today’s price. Plus, you have steadily been losing market share. What would you do?
  • When you have proven reserves of 266 billion barrels of oil to sell, you can’t let anybody mess with your market.   In an interview with Reuters, Saudi Oil Minister Ali al-Naimi commented: “The best thing for everybody is to let the most efficient producers produce.” And the Saudis are extremely efficient producers. While some muttered about a Saudi conspiracy, Al-Naimi continued to act in the best interests of his country.  Sustained drops below $60 per barrel will delay new development in the 2 trillion-barrel Canadian oil sands and make it difficult for Venezuela to produce its billion barrels of Orinoco Belt heavy oil economically. Many new frontier, deep water, and Arctic exploration plays will be cut back or cancelled.   Some unconventional U.S. and Canadian shale oil plays will not be profitable at or below $60 per barrel. But producers will focus on the “sweet spots” in the shale basins with the best economics, extracting more oil with fewer wells. As always, drilling, fracking, transportation, leasing, and other costs will decline from boom-time highs, and industry will exploit new technologies.
  • Oil and gas boom and bust is nothing new to America. If sub-$50 oil prices persist, some companies that made risky choices will disappear. The process can be brutal, but that is the strength of a market-driven economy versus state-directed planned economies.   Lower oil prices, however, have a strong positive benefit to the overall U.S. economy. Drivers enjoyed an early 2014 Christmas present of cheap gasoline, which fell through the $2 per gallon level in 45 states.   The U.S. consumes about 135 billion gallons of gasoline each year and dropping prices have been a substantial infusion of tax-free cash into the economy.   From the global perspective, the world consumes about 34 billion barrels a year. Given a drop from about $110 to $50 per barrel, the world’s economy has reaped an annual savings of over two trillion dollars due to lower crude oil prices.
  • Electricity prices are much lower and more stableInflation-adjusted electricity prices haven’t varied by more than 40 percent in the last 45 years, and today are at historic lows. Inflation-adjusted imported oil prices over the same period have varied by a factor of more than six, and were at all-time highs just a few years ago. At today’s electricity prices and average fuel economy, gasoline prices would have to fall to about 75 cents a gallon to compete with an Auto’s electricity costs. That simply is not going to happen.
  • And the maintenance cost and vehicle life is much better for EVs. Companies like Mobility that replace car purchases with mile purchases will also drive much wider use of EVs. The question isn’t whether this will happen; it is only when?   Let’s consider the economic effect of a hypothetical but plausible model: “In 25 years, half of the passenger vehicle miles in the U.S. will be traveled in electric vehicles.”
  • The 2.33 billion barrel crude reductions from switching half the U.S. passenger vehicles to electric vehicles would totally eliminate all net U.S. crude oil imports. That would also reduce the U.S. trade deficit by more than $100 billion and would totally eliminate U.S. dependence on foreign oil. But it would be a huge shock to other oil-producing nations. Furthermore, the U.S. would become a net exporter of crude oil and/or refined products such as gasoline and diesel. Good news for the U.S. trade deficit; very bad news for oil-producing nations.
  • Dramatic drops in oil prices can have substantial economic benefits for nations that are net importers, such as the U.S., China, and India.
  • For some nations, however, oil is not only the main source of employment, but also the main source of tax revenue to support existing social programs and for the export revenue needed to purchase foreign goods. For these nations, the impact of falling oil prices can be enormously destabilizing and have major domestic and global consequences. A Russian oilfield worker who is suddenly out of a job, or parents in Venezuela who can no longer feed their family, care little about cheap, clean transportation. The people who will suffer the most are themselves a potentially powerful disruptive and destabilizing force. Houston oil workers and Anchorage families also will feel the pain. The U.S. is certainly not insulated from the crash in oil prices. This is particularly true in states such as North Dakota, Alaska, Oklahoma, and Texas that depend heavily on the oil industry for jobs and tax revenue. While the average effect on the U.S. economy will be positive, most everybody understands that it is easy to drown in a river that’s three feet deep – on average.
  • Change is coming. We need to make sure that everyone can keep his or her head above water. Lots of people will still want a family car that is theirs and theirs alone. Often this will be a driverless car, and it will change how the family functions.
  • Paul Gillespie, San Francisco Taxicab Commission president, said some of his city’s Ford Escape hybrid taxis had passed 300,000 miles of use with no problems. He added that they also found brake life to be three times normal due to the regenerative braking system. Michelin’s innovative airless Tweel tire, which won’t ever go flat and lasts two to three times longer than conventional tires.  Pep Boys lists its fee for a brake fluid flush and change at $70. Since these are the only labor-intensive services, allocating $100 for each visit should provide some padding. Actual service costs will be lower since all vehicles drive trains are identical. We’ll allocate $250 for 2.5 service visits per year plus $450 per year for tires for a total of $700 per year for maintenance and repairs.
  • Fraunhofer USA is working to address that issue for home solar by creating a “plug and play” system. Thin, lightweight solar panels with an adhesive backing, designed to withstand 110 mph winds, can be attached to a shingle roof within a few hours. The system, which connects to the grid via a plug similar to those used to recharge an EV, does a self-test and then automatically applies for required permits over Wi-Fi. Fraunhofer hopes to lower the cost of a typical home solar installation from $22,000 to $7,500.