Self-Driving Cars Set to Take the Economy on a Game-Changing Ride

The idea of a car that can drive itself has fascinated us for the longest time. Over the years, this fascination has been manifested in popular culture. There's the 1968 movie The Love Bug, which featured Herbie, a Volkswagen Beetle with its own agenda. Then, of course, there's the 1980s TV series, Knight Rider, which had a souped-up black Pontiac Firebird Trans Am named the Knight Industries Two Thousand or “KITT.”

Herbie and KITT were fictional cars but — as technology has caught up with our imagination —  they may soon become real.

Real Rides
In his Business Insider article, “10 Million Self-Driving Cars Will Be on the Road by 2020,” John Greenough wrote, “Self-driving cars are no longer a futuristic idea. Companies like Mercedes, BMW, and Tesla have already released, or are soon to release, self-driving features that give the car some ability to drive itself.”

Google, Audi, Ford, General Motors, Volkswagen, and Volvo are also in the process of developing or testing self-driving cars.

Car Basics
A TechTarget.com write-up defines a self-driving car as “a robotic vehicle that is designed to travel between destinations without a human operator.” It is also called an automated car or an autonomous vehicle. The write-up likewise pointed out that “to qualify as fully autonomous, a vehicle must be able to navigate without human intervention to a predetermined destination over roads that have not been adapted for its use.”

In June 2011, the Nevada Legislature passed a law to authorize the use of autonomous cars on public roads. The state earns the distinction of being the first location in the world to allow self-driving cars on public roads. More states have green-lighted the use of self-driving cars on public roads since then.

That said, the National Highway Traffic Safety Administration (NHTSA) has come up with the five levels of vehicle automation. They are the following:

Level 0 (No-Automation) – The driver is in complete and sole control of the primary vehicle controls at all times.

Level 1 (Function-specific Automation) – This is when automation involves one or more specific control functions. The NHTSA went on to explain, “Examples of this include electronic stability control or pre-charged brakes, where the vehicle automatically assists with braking to enable the driver to regain control of the vehicle or stop faster than possible by acting alone.”

Level 2 (Combined Function Automation) – This involves the automation of at least two primary control functions that are designed to work in unison to relieve the driver of control of those functions. One example, as the NHTSA indicated, is the use of adaptive cruise control in tandem with lane centering.

Level 3 (Limited Self-Driving Automation) – The driver can cede full control to the automation system under certain traffic or environmental conditions. However, the driver is expected to be available for occasional control, but with sufficiently comfortable transition time.

Level 4 (Full Self-Driving Automation) – The vehicle is designated to perform all safety-critical driving functions and monitor roadway conditions for the whole duration of the trip. The NHTSA noted: “Such a design anticipates that the driver will provide destination or navigation input, but is not expected to be available for control at any time during the trip. This includes both occupied and unoccupied vehicles.”

In the Works
Google seems to be a frontrunner in the race to develp self-driving cars. PC magazine detailed the company's progress in developing the self-driving vehicle: “Although most automobile companies are in some stage of R&D for driverless cars, Google undertook its own project in 2009. By May 2015, with 23 Google-equipped Lexus SUVs on the road mostly in California, Google employees racked up more than a million driverless miles without incident.”

Google has revealed that in a span of six years, they have logged 12 minor accidents. These mishaps were primarily caused by drivers rear-ending the Google car.

Meanwhile, Volkswagen's Temporary Auto Pilot (TAP) research car allows drivers take their hands and feet off the wheel and pedals once they're at cruising speed.

Other companies also have their own patented automation mechanisms installed in their respective vehicles.
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Impact on Economy
However, it may take a bit of time before self-driving cars rule the road.

“The barriers to self-driving cars remain significant,” wrote Greenough in Business Insider. He added, “Costs need to come down and regulations need to be clarified around certain self-driving car features before the vehicles fully take off among mainstream consumers.”

But once self-driving cars are already good to go, there is no doubt that they will also have a significant effect on the economy.

The following are cited by various industry experts as the possible economic outcomes of the development of self-driving cars.

1. Meaningful savings. According to the Centers for Disease Control and Prevention, crash deaths in “resulted in $44 billion in medical and work loss costs in addition to the immeasurable burden on the victims’ families and friends.” Since self-driving cars are touted as safer alternatives to non-automated vehicles, then they are expected to help bring down the painful cost of road accidents.

2. The value of time. Self-driving cars enable people to do other things while in transit. This may translate to more work getting done. In any case, Adam Ozimek pointed out in his Forbes article that “the value of time spent doing what you want in the car instead of driving is worth 15% the normal cost-benefit value or about $2 an hour.” This, Ozimek noted, “imply a time savings worth $99 billion every single year.”

3. Industry shake-up. Fox Business believes that “various industries will be affected” by the coming of self-driving cars. It went on to say, “Cab drivers and other haulers of goods (truckers, delivery services, etc.) may become irrelevant. Auto insurance will have a new meaning as liability shifts from drivers toward the auto manufacturers. Repair shops will need completely different expertise, and may become less necessary as remote repairs become possible.”