WE ARE STANDING ON THE BRINK OF A MASSIVE SOCIETAL TRANSFORMATION THAT WILL GO FAR BEYOND THE AUTO INDUSTRY. activity-travel pattern choices.” For instance, center researchers have produced several adoption prediction models that indicate decades of mixed traffic made up of semi-autonomous, fully autonomous, and traditional vehicle types. However, if the market experiences an influx of other disruptive technologies in addition to those we are already seeing — everything from electric vehicles to flying drones — current projections could play out in innumerably different ways. Ridesourcing, for example, could disrupt a system that is already being upended by autonomy.
RIDESOURCING, AUTONOMY, AND LIABILITY Ridesourcing has experienced a meteoric rise since Uber began service just eight years ago. Since then, its private market valuation has eclipsed that of the largest auto manufacturer in the U.S., General Motors Co. And the traditional auto industry powers have taken note by making huge investments in ridesourcing entities — GM, for instance, owns 10 percent of Lyft. Official statements from GM, Ford Motor Co., and others indicate that the first completely autonomous vehicles on the road are likely to be introduced in ridesourcing enterprises by 2021. From both a legal and business perspective, this makes sense: Auto manufacturers earn the majority of their profit from SUVs and trucks, while their small car divisions account for a minor, volatile piece of their portfolios. If they move from selling small cars to selling rides, this could introduce a more consistent market demand.
Additionally, if auto manufacturers begin working with transit agencies, they could move even further toward replacing an erratic line with steady, assured revenue. Liability considerations attached to autonomous vehicles support this model: From a legal perspective, if an autonomous system malfunctions, the liability is likely to stay with the auto manufacturer. Maintaining control of self-driving fleets would allow for steady maintenance and updates — providing greater control of this risk. The liability risk alone could be significant enough to assure that fully autonomous vehicles remain almost exclusively within ridesourcing enterprises for a long time. Chevrolet is already out of the gate with this idea. Its new level-four autonomous Chevy Bolt is now in production and expected to be released in a ridesourcing capacity as early as next year.
CONSUMERS ARE LEARY Even as the auto industry makes its plans, there is another aspect to the autonomous vehicle issue: How interested is the broader American public? Will individuals and households want to own their own self-driving cars? Or will they move en masse to ridesourcing autonomous transport? And how will the driving public react to sharing the road with this new breed of vehicle? According to industry surveys, nearly 50 percent of respondents across the socioeconomic spectrum have no (or only slight) interest in autonomous vehicle ridesharing or ownership. More than 60 percent said they were
very worried about equipment failure — they simply do not trust the technology.
AIR TRAVEL PARALLELS One explanation for this reticence could simply be fear of the unknown. A similar apprehension about a dangerous-sounding new transportation technology took place in the 1910s and ’20s when commercial airlines were literally taking off. Imagine how scary it was to consider climbing aboard a massive, winged, cylindrical steel object that transported you by flying through the sky? Yet, as more people experienced safe flights, trust in air transportation grew. It took commercial aviation many years to achieve today’s safety standards. As safety improved, so did the number of travelers: Airline ridership grew from 6,000 passengers in 1926 to approximately 173,000 in 1929. A decade later, it had risen to nearly one million. More than 60 years elapsed between the first scheduled U.S. commercial airline flight in 1914 and the industry’s achievement of a sustained safety plateau in the 1970s. In 2016, more than 3.7 billion passengers flew safely on more than 40.4 million commercial flights, according to the International Air Transport Association. Unfortunately 10 fatal air accidents caused 268 deaths, but compare that with 40,000 deaths on U.S. roadways last year. That equates to approximately 86 airliners falling from the sky per year. Unlike flying, driving is still one of our most dangerous activities, and most of us do it every day.
Compare that with self-driving cars. In more than 3 million logged miles on public roads since Google pioneered self-driving technology in 2009, it has experienced only one minor accident where the autonomous vehicle was at fault.
A FAR SAFER FUTURE I personally take great comfort in knowing that 10 years from now, there will be far fewer deaths on roadways thanks to autonomous vehicles. And I believe that the majority of people will start to feel the same way once the technology becomes an integral part of everyone’s lives. Yet, as we stand at the dawn of this new transportation age, business professionals in every industry must be forward-looking. We must adapt our business strategies and interests with eyes wide open about potential upheavals. We must be vigilant in tracking how changes up and down the supply chain might play out. Otherwise, someone will likely come along and optimize our industry right out from under us. And beyond self-interest, in striving to be good citizens of the world, we need to consider the wider societal effects of autonomous vehicles. For instance, how do we address potential layoffs in the insurance and truck driving industries? Is it possible to retrain drivers for other high-demand professions? How do we handle a potential 20 percent reduction in organ donations due to fewer fatalities on the roadway? Right now, we don’t have the answers to these questions, but it’s not too early to begin thinking about the solutions. Edgar Varela, MBA ’18, is a McCombs CleanTech Fellow whose work with the UT Center for Transportation Research has focused on how global automotive megatrends can create value for a variety of interrelated industries.
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