One of the valid concerns about autonomous vehicles is the disruptions they will cause, particularly lost jobs. The basic economics of a technology/capital alternative replacing a labor-intensive business model has shown throughout history that jobs are replaced. Historically, new jobs have traditionally replaced those lost to new technology, but that may not be true forever.
I’ve heard that autonomous trucking will replace truck drivers; is that expected?
Probably not for a while. There is a shortage of truck drivers now, so autonomous trucking will first make up for that shortage. Long-haul trucking will first see truck drivers on trucks but not always driving. Current regulations require a truck driver to take an 8-hour break for every 11 hours of driving. A 2,600-mile trip would take approximately 55 hours of driving and 96 hours in total with breaks. An autonomous truck can make the same trip in 40% less time, meaning that deliveries will be faster and cheaper, even if there was a driver on board to handle refueling and drive the beginning and end of the trip.
What about all the pizza delivery drivers?
These jobs will be among the first ones eliminated, most likely by the mid-2020s. It is a very large market employing a lot of delivery drivers. Domino’s, for example, delivers about 2 million pizzas a day. Pizza delivery is not a high-paying job, and it has a lot of hazards.
What about other food delivery?
Home delivery isn’t as well established with other types of food, such a fast-food or restaurants. It is increasing though as these companies anticipate much cheaper home delivery with autonomous vehicles. So, there aren’t as many delivery driver jobs to be eliminated.
Will most ridesharing and taxi drivers lose their job to ARS?
Yes, as well as limo drivers and car services.
How many ridesharing drivers are there currently in the U.S.?
There are no precise numbers, but most estimates are around two million ridesharing drivers, most of these part-time.
Will car manufacturers see a decline in car sales?
Yes. A typical personally owned car is only used 5% of the time. ARS vehicles will be used 40%-60% of the time, so fewer will be needed. These will also be fleet sales, which are not as profitable. Car manufacturers already anticipate this and many are planning to get into ARS to offset the sales.
Will there be fewer auto dealers?
Most likely there will be a significant reduction in the number of auto dealers. The number of new car sales is expected to drop by 20%-30% by 2030. Most dealers cannot support their overhead with that big of a decline, so there will be a lot of consolidation.
What about gas stations?
The need for gas stations will be greatly reduced. Everyone expects most AVs to be electric not gas powered. People can charge their electric vehicles at home and won’t use gas stations much even if the stations provide electric charging. ARS vehicles, even if they are hybrids, are fleet-based and will have their own refueling capabilities.
Will other industries that support autos be affected too?
Yes, auto repair, auto parts, auto financing, driver education, and the like will be affected.
Will the reduction in auto accidents have a disruption?
Yes, it will significantly reduce auto insurance premiums, injuries, and accident litigation.
How much will the auto insurance industry be affected?
With a reduction in accidents of 90%, auto insurance premiums will be greatly reduced, probably by 40%-50%. On top of that, there will be 20%-30% fewer new car sales. ARS vehicles will be either self-insured or insured as fleets.
About 35,000 insurance agencies employ approximately one million people in the U.S. Auto insurance is about 40% of the property and casualty sector of insurance and about 15%-20% of the total insurance industry of more than one trillion dollars. So, the impact will be significant.
What about trial attorneys?
Trial attorneys that represent car accident victims, typically receive about 33% of the settlement amount. With a 90% reduction in accidents, there should be a corresponding drop in auto accident litigation, so the impact on trial attorneys could be significant.
How will AVs, particularly ARS, affect car rental companies?
Ridesharing has started to erode rental car business, and ARS will make that even more significant. Car rental companies may find some new opportunities to offset this, such as cleaning and maintaining AVs for ARS fleets and possibly medium distance AVs rentals.
Will there be less need for parking?
Yes, there will less need for parking lots and garages, so some of these will close. Parking is a $100 billion industry in the U.S. so there could be some significant impacts.