Financial Pros and Cons of Autonomous Self Driving Car Technology

The last time mankind did something indisputably significant was sending the first signal from UCLA to Stanford via ARPANET (the original birth of the Internet).

That was in 1989; 2 years before I was born. My husband tells fables of him having to use AltaVista before Google search engine blew everyone’s bums out of the water…remember Ask Jeeves?

Continuing off from the last post I mentioned my excitement towards the very palpable possibility of self-driving cars. This is happening in our lifetime guys! That’s pretty epic.

The first driverless car concept was simply a theorized possibility in the 1930s. The modern-day automobile as we know it today didn’t take shape until the mid-1920s.

Before the 1920s, it was more like buggies that closer resembled wagons than modern cars of today. In the 1930s, self-driving cars were considered a genre of science fiction. Like Star Trek! But in the 1980s, Carnegie created the first driverless car (and bus) on a test course.

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Anyway, we are about 40 years “late” to the 1930s estimate that self-driving cars would be everywhere by the 1980s. I guess we were supposed to be working on brain rays any day now?

I sort of became addicted to this topic and binge read quite a bit of research on it. It’s clear to me that everyone is as excited as I am. Something so drastic as this will certainly change how human beings will work, play, and travel.

Autonomous cars will have so many ramifications in almost every way of life, including personal finance. Here are some of the strongly probable pros and cons of our future with autonomous vehicles.

Pros of Autonomous Cars

1. Self-driving cars can lower parking expenses

The cost of owning a car is very discouraging based on the price of the parking fee alone. With self-driving cars, the parking expenses is going to be reduced or erased once and for all.

This is because of the fact that owners would never need to park their own cars. The car will leave and return home alone or drive around until they can park itself.

According to the University of Toronto study done by M. Nourinejad, S. Bahrami, and M. Roorda, self-driving cars can decrease the parking space by an average of 62%.

2. Reduction of car ownership per US household

When it comes to owning cars, a household would save more if they only have one car or none at all. According to the US Bureau of Transportation Statistics in 2017, the mean number of personal vehicles in is 1.9 while the drivers in each household averages to 1.8 drivers, which means that there are currently more vehicles than drivers. The more family member a household has, the more vehicles are likely in the family garage.

With self-driving cars, the number of vehicles a family needs to own would be fewer than before. According to The University of Michigan Transportation Research Institute, one of the potential impacts of self-driving vehicles on household vehicle demand and usage is the reduction of average ownership rates by 43%. This is because the lack of trip overlap means more individual usage for the vehicle.

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3. Reduction to auto insurance

One of the possible benefits that everyone that owns cars would be happy about is the reduction of auto insurance premiums. According to USAGov, auto insurance is meant to protect someone from paying the full cost of vehicle repairs and/or medical expenses due to a collision.

With self-driving cars, the possibility that an accident could happen is reduced due to the safer nature of self-driving cars. In 2013, Center for Disease Control and Prevention reported that over 30,000 people are killed in motor vehicle crashes each year in the United States alone; most of those due to human error.

We weren’t biologically programmed to handle 65 miles per hour of data processing or hold onto that attention 100% of the time.

Most of our biological systems are outdated, caveman style. Currently estimated, human error accounts for about 80% to 94% of all traffic accidents. That’s pretty statistically drastic!

Everybody has a blind spot in each eye where your eye stem connects to and your brain fills in that blind spot like nothing happened. The mind is a super powerful thing…at hiding and illusions.

Computers do not have human error, which is sweet because human makes a lot of it! Machines are better at human decision making. With self-driving cars, the risk of vehicle-related accidents is expected to go down along with auto insurance monthly premiums.

4. Save time and fuel by reducing traffic

Self-driving cars are expected to help people in American urban areas to save both fuel and time in the road by reducing traffic. A lot of traffic is caused by human actions such as overspeeding, accidents, and drivers who don’t know how to use road facilities.

In addition, traffic usually wastes gallons of fuel during a traffic jam. According to Gemalto, 7 billion hours worth of time and 3.1 billion gallons of fuel valued at $160 billion are lost because of traffic jams.

With self-driving cars equipped with sensors, traffic data, and more modern technology, it can decide the best route to follow to minimize traffic time and fuel loss.

Robots cars are able to drive closer together on the road and they drive more efficiently with each other. This can reduce traffic and pollution. We could experience less congestion and move faster overall.

5. Fewer auto thefts from new security measures

Biometric features have been successfully implemented in laptops and phones. These features are also coming in self-driving cars. In fact, there is already a physical example of a car that has biometric security measures so no one, other than the registered driver, could use the car.

IDEMIA, in partnership with Altran, implemented a smartphone-based digital key system that works with facial recognition. The mentioned car, known as “Columbia”, also has a camera-based system which monitors driver behavior, as well as return control to the human driver in case of unforeseen circumstances during the road.

Altran also partnered with the fingerprint sensor company called Fingerprints to develop a fingerprint-based smart car identity solution.

6. Smart controls via smartphone

There is no doubt that smartphones are the most used handheld computing device right now. Almost every individual has one or multiple smartphones that are used daily.

With the involvement of smartphones, owning a self-driving car is like owning your own Uber service. The only difference is that it is only used by you and your family. This is a big saving if you or your family often use ride-sharing services or constantly bothered to dough out rides for other family members.

7. Efficient fuel handling

Human drivers tend to have habits on the road that increases the consumption of the gas. Slamming the breaks, stepping on the accelerator, and other things affect fuel consumption. In addition, there are times when a human driver tries to figure out how to get in his or her location, especially if he or she is not familiar with the place. Because self-driving cars will be integrated with smart AIs and GPS, there is no need to drive “blindly”, as the AI will choose the shortest way to your destination every time.

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8. Increase overall safety standards

Self-driving vehicles could free up law enforcement. They can also provide relief efforts during natural disasters in areas too dangerous for humans to attempt!

About 37,000 Americans die every year in car crashes. That’s more than 100 per day! –Accidental FIRE

Let’s say the mechanics behind self-driving cars do mess up occasionally in heavy weather or glitch. The lasers, sensors, GPS or trackers give in during hail and leads the unfortunate riders down a very wrong path. Statistically, malfunctions like that would probably still be much smaller in number than the guaranteed 100 deaths per day caused by being behind the wheel as humans.

Traffic accidents in the U.S. cost $871 billion each year. Technology can always be improved, whereas, no offense to humans but humans are slow to change.

The psychological fear behind letting a robot control your life and fate is probably a bigger safety concern for most Americans than cold statistics. Swedish carmaker, Volvo, has promised that their version of autonomous Volvos will be “death-proof.”

That’s a big promise to make but Volvos are famous for the safety so we’ll see about “death-proof.”

9. Affordability in autonomous upgrades

Autonomous cars work using extra fancy existing technology such as a souped-up GPS, 360 camera, lasers, sensors and an intricate secretive set of company formula for the software of the autonomous car.

Does that mean it will be too expensive for the Average Joe to afford?

If the economy of scale is applicable (which I think it will be), the cost will not likely be an issue. An economy of scale means cost savings in production can be made when there are high production levels. The technology should be affordable by 2023 if everything goes to plan.

The extra GPS system cost $100-$6,000. The high tech lasers and sensors would add on another couple of thousand on the highest price range. The priciest of all physical equipment would be the spinning camera which would cost around $8,000.

I don’t think the cost will be an issue. At least not for those willing to pay the price. The car companies heavily vested in the autonomous game like Audi, BMW and Mercedes-Benz have an edge on the competition simply because their car clientele is more affluent across the board. Fully autonomous cars would fetch $10,000+ more than traditional cars’ sticker price.

Considering the service that it provides, that’s not expensive at all.

10. Self driving cars can end car ownership

If they are self-driving, would we really need to own one?

Can’t we just call one up and it’ll pick us up? Wouldn’t that be much more cost-effective to rent only when you need one like a taxi?

The principle of a large, empty, fits 4 people, metal box sitting idle in the garage taking up space 85% of the time still and always will sound silly to me.

Good news is, most likely, self-driving car technology will be sold to ride-sharing programs first before becoming available to the public.

For autonomous cars to hit dealerships, we have a much longer wait, I feel. Which leads us to the cons of autonomous cars…

Cons of Autonomous Car Ownership

1. Loss of labor and working jobs

Speaking of labor, a lot of hardworking people (be they taxi, truck, or delivery drivers etc.) will play the high risk of losing their jobs when autonomous vehicles roll out into the mainstream.

Whenever there is innovation, there are “casualties.” 100 years ago, the invention of tractors made lots of farmhands lose their jobs. Back in the 1890s, the majority of Americans owned small time family farms. Now less than 2% of the American population are classified as farmers. We can’t exactly tell everyone to ban tractors and go back to farming.

Blacksmiths, farmers, and milkmen were all displaced at one point during the rapid development of America’s past. But other jobs can be created and new jobs can be made to serve and expedite the human progress.

The transition would be hasty for many. Autonomous vehicles is not a possibility but a simple matter of when, so make a tangible plan B now for those in harm’s way!

The math behind autonomous cars is a no-brainer for big companies like Wal-Mart and Uber/Lyft. Human labor is extremely expensive.

On the flipside, this technology could greatly boost the bottom line of companies in the sectors of transportation. Currently, roughly ⅓ of the budget of transportation goes to paying human drivers. Better bottom line, higher profits, more buyer confidence, stocks go up.

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2. Maintenance for additional parts (e.g. sensors)

A self-driving car will have a lot of new parts in order to carry out its extra features. Most of these parts are sensors, lasers, and other things that help in motion sensing. There are even more cameras needed for face and landscape recognition. Maintaining your car and making sure that the sensors are all working will be one of the biggest setbacks of owning a self-driving car.

3. The additional cost to maintain cybersecurity

Another problem that future self-driving car owners will likely encounter is cybersecurity. Most likely, the car will be very dependent on the Internet. The car will be more prone to hacking, just like computers and mobile phones.

A decent cybersecurity service will be needed to ensure that no one can enter your car’s system and plant malicious codes in the process. Internet service providers will also need to up their games because self-driving cars will need real-time data if they’re using GPS or similar devices. As early as now, the UK Government already passed a standard for self-driving vehicles, and it is expected that the other governments will follow suit once more development is done for the self-driving AI technology.

4. You’ll be jobless (if your job is related to car services)

One of the most obvious setbacks in self-driving cars is the loss of jobs in the car service industry. According to Dr. Subhash Kak from Oklahoma University. Dr. Kak stated that at least one-third of the jobs are going to be taken by the AIs. However, this change is still expected to come in 2030, along with the transition of self-driving cars on the road. Taxi drivers, public transport operators, and truck delivery drivers are expected to be the major demography that will be affected. With the rise of the AIs, it is expected that more jobs for the creatives will be available.

5. Making the shift over will be pricey

Financially, the introduction of autonomous vehicles could possibly return $600 billion dollars back to the economy from the amount of labor, medical, and resources saved. The environmental impact is another factor that discerning consumers should consider.

One could just attach a super advance GPS, fancy 360-degree camera, lasers, sensors, and software etc…would you be able to soup up and “recycle” a traditional car and turn it autonomous to save a few thousand bucks. Because can you imagine the junkyards of non-autonomous cars that would pile up?

But I realized that was a dumb question before he even replied. This is a metal killer death machine. Any ‘self-souping’ would probably be highly illegal.

6. It is going to take a long time

This technology only works out well in large, well mapped, robust and well-developed areas. This could be a temporary weakness of autonomous vehicles in that it helps only a certain portion of the population directly – a lot more than others.

For people living car-free in large cities that are well mapped (San Francisco for example), car sharing sounds like a home run as a personal yet shareable, rental car but the rest of the United States – especially rural areas – have a long time to wait.

Common Unanswered Questions About Self Driving Cars

Take a stab at any & reply in the comments!

1. Can you hack these cars and assign them as assassins? Or will robots be harvesting our organs by the end of the century?

2. If it is driverless, why does it have to resemble a car? Couldn’t it be a bedroom? Or a living room? (I really hope one could put a bed in there. It would be pretty cool to ride around in a spare bedroom. And personally, I don’t care if you make it car shaped or hamburger shaped as long as there are naps to be had.)

3. What happens to car insurance? And DMVs? (Update: dump those auto insurance stocks?!)

4. Can an autonomous car get a virus? Can someone hack a car as easily as hacking into a toaster oven over WiFi?

5. What will happen to public transportation? Will car sharing become more popular?

6. Who will be responsible if a self-driving car gets into a fatal accident with another car or pedestrian that it failed to register?

7. Can self-driving cars give jack*** drivers the middle finger for me? This is important to my consumerist side.