Impact of Self-Driving Cars on American Economy

New developments in autonomous vehicle (AV) technology have created interest in the public and have become a topic of debate recently. Self-driven vehicles, especially the Google Self-driven Car, have become an interesting subject in the media and the focus of several surveys, attempting to measure the perception of the public of such cars. Self-driving vehicles are generally visualized to be the ultimate future and a model of connected-vehicle technology. At present, this is area is the focus of many research projects, while it also receives the support of the US government. Thus, reacting to the quick technological growth in the realm of autonomous vehicles, the Federal and local governments have started developing policies to address the challenges that may stem from the introduction of self-driven vehicles. Thus, with the declaration of strategies to support self-driven cars, the US government has permitted such cars to operate on roads of such states as California and Nevada.

While technological progress continues at a fast pace, it is expected that these driverless cars will be sold by 2020. On the other hand, many concerns arise regarding the economic impact of these cars. The US government has also developed ambitious plans for self-driven vehicles in some cities as a new form of public transport by 2018, as on-road tests have already begun in 2015. In Europe, many countries of the EU have recently suggested to the United Nations Convention on Road Traffic to permit autonomous vehicles on public roads in the nations, governed by this treaty. At the same time, the US Department of Transportation has also declared a policy, outlining recommendations and strategies for supporting the introduction of autonomous vehicles across the United States.

Since the 1950s, driving technologies have improved, becoming highly advanced. Thus, it is expected that self-driving vehicles will eliminate the problem of traffic congestion by the end of 2020. While these AVs can offer a potential boon to the disabled and elderly people, many concerns still need the attention of the government and automobile manufacturers. The current research addresses these issues and offers possible solutions. Furthermore, this paper examines the potential impact of autonomous vehicles and discusses the regulatory and safety issues raised by them. The paper also tries to explore who should be held accountable for the accidents, caused by driverless vehicles, as they may cause physical harm to the consumers or to the public, and find ways of mitigating such risks.

Research Question

What moral standard should autonomous vehicles implement and who should be held accountable for the vehicle’s actions in life-for-life situations such that physical harm to the users, physical harm to other members of society, and risk of irreversibly damaging the driverless car industry is most mitigated?

The Future of Autonomous Cars

The transition to automated vehicles will largely prevent numerous problems that road traffic creates nowadays. The introduction of such vehicles will enable their more efficient use on the roads, hence saving people’s time. With the broad use of self-driving vehicles, narrow roads will no longer pose a problem because these vehicles will use navigation systems and avoid traffic to a great degree. Recent developments point out that future traffic will be less problematic and more predictable with the implementation of driverless vehicles. Smooth traffic movement, minimum level of pollution, and road fatalities are the priorities of The U.S. Transportation Department. As Greg Larson, chief of the Advanced Highway Systems of Department of California states, ‘We believe automation system is extremely necessary for addressing mobility for U.S. citizens,’ arguing that The new roads are not feasible to construct an existing lane cannot be widened due to land and cost constraints (US Department of Transportation 2013). Therefore, with the ongoing developments, auto-experts anticipate the future as fully automated transportation structure that will be more efficient than the present configuration. All these advancements indicate that the time is not far when intelligent cars become a part of people’s lives, but it is hard to say how they will adapt to them.

The most crucial aspect is how the business sector will receive benefits by integrating automated transportation system and increase productivity as well as the degree of such integration. Automobile producers have already started using driver assist technologies in their luxury models, and this concept gains popularity among car users. Since these navigation systems are quite similar to the technology used in driverless vehicles, they are viewed as the transition components that would be fully used in self-driving cars (Levinson 2013, 790). As a result, current copilot systems are expected to evolve into auto-pilot systems, but still, some researchers cannot predict the optimal use of driverless technology.

The Economic Impact on the Insurance Industry and Liability

One of the prime concerns and moral standards posed by driverless cars is the issue of insurance and liability as well as who will provide the insurance for these autonomous cars. It is not clear yet who will be held liable if the driverless car is involved into an accident and it causes fatalities on the roads. Nevertheless, technology proposes that a driver will supervise the driverless car, which will further make the issue of liability more complicated. The less experienced driver will not be able to monitor the vehicle’s system actively, which may cause accidents due to the fact that some drivers do not have the ability to react quickly to gain control of such a vehicle (Millard-Ball 2016, 4). Undoubtedly, initially, one cannot clearly define which situations demand human actions and the technologies to cope with these situations. It will be also a difficult task for the producers to anticipate situations that the driverless car cannot tackle; at the same time, the user may not also intercept all those potential issues. If a vehicle is completely autonomous, it will be loaded with several devices that will evaluate the environment, in which it functions.

Self-driven cars may pose danger to the life of people if their users do not have the thorough knowledge of handling their cars’ operations. Before such cars can be introduced on the roads, their users should not have to try to find how they work since they should function automatically (Anderson et al. 2016, 111). A complete autonomous car is one that is capable of driving on roads without human assistance, only with the help of its navigation and radar systems.

In the case of an accident, there should be clarity about who controls the car. Thus, the manufacturer and dealer should be held liable under such circumstances. Therefore, self-driving cars should not be completely privately owned, and license can be granted when needed for transportation. Furthermore, it is not doubtful regarding who owns the responsibility for maintaining the AVs with many complex functions. It is a well-known fact that most car owners are not familiar with the maintenance of driverless cars, and any failure of the system could be catastrophic. Another possibility is that computer system managing this car could be hacked. If a self-driving car is privately owned, there is also a possibility that the car might be modified (White 2013). Therefore, maintaining ownership in the hands of dealers and producers removes this problem. For detecting failure in systems, producers can equip their vehicles with data collectors (black boxes) to control their functions and make repairs accordingly.

Another crucial factor is the economic effect on the insurance industry, and if these vehicles are not owned by the public, insurance companies will not provide insurance policies anymore. Hence, a large segment of business will be affected, and many companies will disappear. However, the producers, who will offer these cars to licensees, have to possess insurance. Thus, car manufacturers will possibly turn to commercial insurers because all risk cannot be eliminated from these cars (Row 2013, 25). This aspect is valid during the transitional, or introductory period, as there will be relatively few driverless vehicles on the roads. They could get into accidents with cars still being driven by drivers, and there will also be other indirect consequences to the economy with the launch of driverless vehicles.

Scientists expect that among the positive impacts of such cars, there will be increased fuel efficiency because they will spend relatively less time in traffic and in searching space for parking. Since the rate of accidents will reduce, these cars could weigh as little as 800 pounds. Car sharing among people will increase; hence, there will be fewer vehicles on the road, thus leading to more bikes on the roads as well as pedestrians since these cars will pose a minimum threat to the safety of people. Polluted cities would become more attractive to live, which will increase energy efficiency (Boehret 2013, 9). With the introduction of autonomous cars, more people will have an opportunity to use vehicles, including the disabled, children, and elderly as well as those who are sick and on medication.

The negative impact of driverless technology is that these vehicles might need replacement more often as they would be operated more frequently. Therefore, the lifespan of these cars might be from three to six years rather than standard cars having a 10 years operating period (Gordon 2013, 18). Ultimately, the goal of the Federal government is to provide the safety of passengers traveling on the roads; hence, a life-security factor is more important than the lifespan of a vehicle.

The Issue of Safety

Safety issues are serious concerns for car drivers while they are on the road. Traffic accidents have enormous negative impacts on the economy of any country. The introduction of driverless cars can minimize the number of accidents since most crashes occur due to human negligence. Intelligent safety systems in self-driven cars will help drivers avoid accidents. With the implementation of these vehicles, the flow of traffic would undergo drastic changes as well (Claudel and Ratti 2015). Since these vehicles will be equipped with sensors, an array of cameras, GPS, radar, and data tracking systems, the reconstruction of collision incidents will become easier.

In 2014, vehicle drivers in the USA waited for 30 hours a month in traffic, which decreased their productivity (Guerra 2015, 216). During the early stages of introduction of AVs on the roads, there should be a combination of driverless vehicles and human-operated ones. This combination can create some problems and confusion concerning the reaction of drivers to self-driven vehicles and their ability to operate in the traffic flow. Thus, AVs would follow all traffic rules while human drivers could break the law (Guerra 2015, 224). It is anticipated that driverless cars would become popular on the road, traffic congestion would improve, and these vehicles would be able to merge into dense traffic. With the reduction of traffic, there would be fewer accidents as their navigation system would help them to communicate with other autonomous vehicles moving during the same time.

These cars can be designed to maximize fuel consumption at common speeds on the road. The limit of speed can be increased or decreased, and the driverless vehicle can anticipate how to control the situation on the road. At the same time, its navigation system would help to avoid dense traffic with fewer stoppages, which would increase average fuel economy. These AVs will operate by using the network. When there will be a need to navigate from one point to another, these vehicles will communicate with nearby ones, follow traffic signals, toll booths, and receive real-time updates on traffic conditions, assessing their surroundings to avoid a collision and unpredictable activity of others on the road. These aspects suggest that driverless vehicles will be in regular contact with the wireless network.

Therefore, the network must have full coverage of all highways and roads, and high latency will not be acceptable as these vehicles will communicate with each other and the roads. The Federal Communication Commission of the United States (FCC) has allowed 75 Mhz of spectrum in the 5.9 GHz band for the development of autonomous vehicles. This spectrum will be utilized for short-range communications (SRC) (Levinson 2015, 801). The idea is to have self-driven vehicles, road signs, traffic lights, and other systems communicating with each other. This developed technology would avoid a collision, save human lives from accidents, provide real-time traffic control, cruise control, and many other systems.

The Technology of the Self-driving Vehicles

Many automobile manufacturers have ambitious plans to introduce self-driving cars on the roads by the end of 2020. They have invested heavily in their research activities to develop this new technology. While some acknowledge the introduction of self-driving vehicles as a technological breakthrough, a large number of the US population is apprehensive about its usability on the roads (White 2013, 24). However, the fact is that semi-autonomous vehicles have already been introduced for the past decade in the form of microprocessors and sensors, especially in luxury cars. These cars have made the user’s job safer and easier. Thus, such devices as parking assistance, cruise control, lane change warning and several collision avoidance systems make cars somewhat autonomous already.

The 2014 Mercedes S-class has taken a significant step towards developing driverless vehicles. This car is equipped with many sensors that collect data regarding driving conditions. This vehicle offers a set of latest technologies called Intelligent Drive that has the capacity to cover blind spots, steer, automatic brake system, and watch animals and pedestrians movement as well as monitors to avoid potholes. Its computing power is highly sophisticated, using algorithms and processors. The car also has a wide array of cameras that are mounted on the rear and front sides. These cameras offer 3D imaging that assists the car in making decisions. The car also has Magic Body Control as the stereo camera records the condition of the roads and produces three-dimensional images of the roads and pavements. If the car anticipates a hole or a bump on the road, its microprocessor adjusts the suspension system in negotiating rough spots or potholes. Further, other devices include two short-range and two long-range radar systems that can monitor the area behind the vehicle at a distance of 300 feet. Ultrasonic sensors help to locate objects alongside the vehicle while the front-mounted radar monitors 300 feet distance ahead. Blind spot location and lane keeping control assist the car in operating in the correct lane (Anderson et al. 2016, 188). Radar and cameras will assist in the brake system and prevent collision as well as control the speed of the vehicle. This system can monitor the vehicle’s movement to determine when the danger of collision arises. At the same time, it also has capability to apply the brakes to avoid a crash below 25 mph. The impact of a collision at 45 mph is reduced.

With technological advancements, some scientists confirm that driverless cars will assume all functions that human drivers have. Undoubtedly, self-driving cars will bring revolution in the automobile industry, but the question is how the introduction of driverless cars will impact the US economy. First, users will no longer be the owners of cars. Manufacturers will sell cars, but the license for use will be given to those who need transportation. Hence, there will be no need to have a driver’s license as everyone will become a passenger. These cars will carry registration in the dealer’s name, and vehicles will be dispatched to those who demand them (Claudel and Ratti 2015). The problem of the car malfunctioning will also be solved as the liability will lie in the hands of producers, and they will carry the responsibility of maintaining the vehicle’s systems and devices. Individuals will not have to worry about car insurance policy as the car’s usage fee will include all such expenses.

Other Economic Implications of Self-driving Cars

While there has been a decrease in the automobile casualties per million miles traveled by a factor of ten since 1960, accidents cause a major cost to the US economy and healthcare system. Thus, a 2013 study by Morgan Stanley reflects that the introduction of autonomous vehicles in the USA can save $1.4 trillion a year plus $155 billion in the cost of fuel, increase in productivity of nearly $505 billion, and save $485 billion in causalities-related expenditure (Lewis 2014, 55). The Eno Center for Transportation, a foundation with the mission to improve the transportation system, published in its report that if 10% of cars were autonomous, they could decrease causalities by 1,100 each year and generate nearly $35 billion in economic savings (Henebery 2017, 3). If 90% driverless cars operated on the roads, nearly 22,000 lives would be saved each year. The Eno Foundation further suggests that the gains could reach nearly $448 billion (Henebery 2017, 3). Some researches suggest that the human error accounts for most of the fatal accidents and road deaths. At the same time, more than 40% of fatal accidents occur due to drugs and alcohol as well as driver’s fatigue and distraction (Henebery 2017, 5). Since driverless cars will be unaffected by these factors, there can be a 35% reduction in deaths. The main reasons for highway accidents are over-speeding, rash driving, inattention, inexperience, and slow reaction. These factors will be eliminated by the introduction of self-driving vehicles.

Promote Highway Capacity and Efficiency in Use of Time

The advent of self-driving cars will lead to a revolutionary redesign of vehicles. These cars would be reconfigured in such a way that there will be no need in a driver behind the wheel. The passenger space will undergo changes that would permit users to read books, watch movies, work on laptops, call business associates, and enjoy meals en route to their destination. Currently, people spend more than one hour in commuting in busy metropolitan cities, which would be reduced by almost half, and they could utilize this time for other productive activities. Once autonomous vehicles are on the roads, they will drive closer, communicate with each other, and maintain a distance among them (Woodyard 2015). This function will avoid the waste of fuel and frequent stoppages at red signals; thus, they could move freely in traffic congestion. Their coordination will enable a smooth flow of traffic, minimize time, spent in commuting, and increase efficiency on highways.

Fuel Economy of Self-driving Cars

Self-driving vehicles will remove ineffective speeding up and unnecessary braking, operating at an optimum level to achieve maximum fuel efficiency. Even if these vehicles obtain fuel efficiency by 1%, this would save billions of dollars in the United States alone. In 2015, according to the US Department of Transportation (2015), there were nearly 263.7 million vehicles registered in the United States. An average vehicle travels 13,250 miles per year, using 800 gallons of fuel, which implies that the average efficiency is 17.5 miles per gallon of fuel consumed (Britt 2016, 19). The total expenditure on fuel incurred during 2015 can be achieved by multiplying the gallons of fuel consumed per vehicle, the price of fuel, and the total number of automobiles registered in the USA in 2015 (for simplicity, the price of fuel per gallon is supposed as $2.50). Hence, with this calculation, in 2015, US citizens spent more than 825 billion dollars for using gasoline in their vehicles. By considering this scenario, each 1% increase in the efficiency of fuel would save nearly 8.2 billion dollars each year (Guerra 2015, 218). Fuel prices continue to rise, with the number of vehicles increasing as well, which reflects the significance of saving fuel. An aggressive US driver consumes 30% more gasoline than an average user, and an average driver saves 10% of fuel due to efficient driving. Thus, it would be possible that self-driving cars would save nearly 10% gasoline on average, which could save nearly 45 billion dollars each year (US Department of Transportation 2015).

As discussed in the safety section, the risk of casualties and accidents will become extremely low the in case all the cars operating on the roads become automated; hence, there will be a demand for lighter vehicles. Introducing lighter vehicles will further save 2% of fuel for every 110 pounds reduced in such vehicles. This factor will generate nearly nine billion dollars of savings each year (Desouza et al. 2015, 16). The average rate of gasoline savings will be even higher with the smooth flow of traffic, and there will be less braking, speed control in stop and go traffic since the most fuel efficient speed limit is 25 to 60 mph and this matches most speed limitations. At present, most car users stop and apply brakes frequently, they drive either too slow or very fast because of poor traffic conditions since they want to arrive at their destination earlier. With the introduction of fully autonomous vehicles, these cars can move more efficiently on highways as well as in urban areas (Desouza et al. 2015, 18). This aspect will further enable city mileage of cars to reach closer to the average mileage achieved on highways, which at present is nearly 25% higher. Furthermore, increasing the level of mileage efficiency in the city driving to the highway level may not be possible to achieve in the beginning, but the smooth flow of traffic in urban driving can easily save nearly 8-10% on gasoline costs.

Conclusion

The research observes that there many technologies can help in the development of autonomous vehicles. Advanced systems, such as automated cruise control, GPS, and lane driving controls, are already available to users in some luxury cars. The combination of these systems and technologies, such as steering and brake systems, computer-based lane analysis, and other technologies needed to control without a human driver, will become a completely autonomous system. The issue is winning the trust of people to permit a computer to drive a car for them because self-driving vehicles can be involved into accidents during the early stages of their introduction. Therefore, there must be thorough research and road tests should be carried to ensure a safe introduction of the final product. Self-driven cars will not be accepted instantly, but over time, more and more people will start using them and realize the benefits of autonomous vehicles. The introduction of AVs will replace humans with computers that can control the vehicles, and this aspect will result in the loss of jobs and unemployment over the world. On the other hand, it will increase the efficiency of businesses as less time would be wasted in traveling and less money would be spent on tasks that driverless cars can perform.