The Massive Impact of Driverless Cars, Blog 1.

Paul Sweeney20/10/2016

Paul Sweeney: A few weeks ago, Uber introduced the first driverless cars on the road: a self-driving taxi fleet in Pittsburgh. Uber, partnered with Volvo, Google, Tesla, Volkswagen, Ford and GM are all investing heavily in driverless cars.

Car makers are teaming up with tech firms in their development. GM recently invested $500 million in Lyft, a competitor of Uber, which is also developing driverless cars. GM is anticipating continuing dropping car sales but sees a future in the provision of cars for the ride-hailing services. Google’s driverless cars have been driving around California for years.

Driverless car: Photo credit Department of Transport

About 15 years ago, sitting in a bus driving up and down the skyways running over the vast car park in LAX (Los Angeles airport) I was struck by the number of parked cars not being used, idle for weeks.

If you scale that up by all the cars sitting in driveways and other car parks around the world, it is a staggering number. And it demonstrates the gross inefficient use of an expensive resource. In fact, the Economist (1 July 2015) estimated that cars are unused for 96 per cent of the time. 92 million Vehicles Produced in 2015.

A car is the second largest purchase for most people and its use is growing. Some say that we have reached peak car, but the manufacture of cars has never been as high as it is today. China is now the biggest producer, followed by Europe and North America. 73.5 million passenger cars were produced globally in 2015, up from 50 million in 2004.

On top of that, 18.1 million commercial vehicles were manufactured worldwide in 2015. That is also up - from 15 million in 2004. The EU produced 18.4 million motor vehicles in 2015, 23% of the 91.6 million motor vehicles produced globally. The EU exported 6.2 million vehicles in 2015, which generated a net trade surplus of €100.4 billion.

The production of autos is important. Peak car production was reached in Europe in 2006, but China is making up for the drop in production here. It is possible that demand will peak in Asia but not for a few years. In Europe the average number of cars per 1000 people is 500, that is one car for every two people. Ownership peaks at 678 in little Luxembourg and is 409 in Ireland.

Employment in Automotive Sector Some 12.2 million people, or 5.6% of the EU employed population, work in the broad automotive sector. Of those, 3 million work in manufacturing. The rest are in sales, transport etc.

That is almost 6% of those at work in Europe.Of those 3 million in manufacturing, the largest number, 815,000 work in Germany, the largest employer. Ireland has 2510 in manufacturing (European Automobile Manufacturers Assoc). Many more work in other areas of the broad automotive sector.

So what happens when we have driverless cars?

When we have safe, accessible and cheaper driverless cars, it will have major impacts on many areas of the economy and society. Driverless cars will have massive impacts on:
  • manufacturing
  • employment in manufacturing and other areas of the automotive sector such as car sales,
  • taxi drivers, bus and train drivers, car servicing, car hire
  • road safety and the huge number of road deaths and injuries every year
  • insurance costs the urban landscape and street use
  • climate and the environment
  • personal mobility
  • social interaction the economy overall.

When will driverless cars be a reality?

They are here already, but safe, fully automated, driverless cars may be in mass use in ten years, by 2026. This is forecast by some. For example, the CEO of Ford said autonomous cars will be rolled out by 2020. Other car companies would add five years.

Google, whose cars have done over 2 million kilometres test miles on public roads, had promised 2018, but others think the 2030s is more feasible. Andrew Ng, the chief scientist of the Chinese search engine Baidu thinks that self-driving cars will be in mass-production by 2021 and the US Secretary of Transportation claimed at the 2015 Frankfurt Auto show that he expects driverless cars to be in mass use by 2025.

So it will be between 2020 and 2030 when they hit the mass market. Nissan boss Ghosn forecasts mass production beginning by 2020.

The Institute of Electrical and Electronics Engineers forecast that up to 75% of all vehicles will be autonomous by 2040. Executives in Intel, Continental, Daimler, Jaguar, Land Rover and VW all forecast similar timelines at between 2025 and 2030 for mass production and use.

Why would anyone, but the wealthy and those who are defined by the car they drive, buy a car, when they could call for one and it is outside in a few minutes; with no worry about parking; after it drops you?

And perhaps at a fraction of the cost of ownership? If there is a strong move to driverless cars, its impact will be revolutionary. In the next blog, I will look at each of the eight impacts listed above in more detail.

Paul Sweeney is Chair of TASC's Economists' Network.

Key Words: Driverless cars, Uber, Google, manufacturing, environment.

Posted in: TechnologyEnvironmentTechnologyLabour marketInequality

Tagged with: Driverless carsmanufacturingenvironmentUberGoogle

Paul Sweeney     @paulsweeneyman


Paul Sweeney is former Chief Economist of the Irish Congress of Trade Unions. He was a President of the Statistical and Social Enquiry Society of Ireland, former member of the Economic Committee of the ETUC, a member of the National Competitiveness Council of Ireland, the National Statistics Board, the ESB, TUAC, (advisor to OECD) and several other bodies. He has written three books on the Irish economy and two on public enterprise, including The Celtic Tiger; Ireland’s Economic Miracle Explained and Selling Out: Privatisation in Ireland, chapters in other books and many articles on economics.



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