How to save $10,000 a year: stop driving!

Is this the end of the road for the private car?

According to the American think-tank RethinkX, the average American could save thousands of dollars by giving up their private car.

Driverless Uber-like taxis are going to be so cheap that it simply won’t be worth owning a car.

Why so cheap? Because, first, they will be electric vehicles that will be much cheaper to run than than conventional petrol, or diesel, cars, and, second, there will be no driver to pay.

Waymo (the company formed from the Google self-driving car project) is already testing AV (autonimous vehicle) taxis in Arizona and appear to planning expand further. According to the jourmal, IEEE Spectrum, both Waymo and Cruise GM (the General Motors AV company) are planning commercial self-driving services using all-electric Jaguar I-Pace SUVs and Chevrolet Bolts, respectively.

Level 4 Autonomy

The taxis will be level 4 autonomous vehicles which means that they will be fully autonomous within a restricted environment. That environment will be a defined geographical area that has been well mapped and so shouldn’t hold any surprises for an AV. There are also likely to be other restrictions, too, such as the weather conditions that they may drive in (AVs are happy with fair weather but heavy rain, or snow, is more of a challenge).

Cheap rides

The economics of self-driving taxis are compelling. There is no driver and so no salary to pay. Also, electric vehicles are cheaper to run than those powered by internal combustion engines. And because electric cars are simpler and have fewer moving parts, maintenance will be simpler and they will last much longer. Finally, AVs will be safer than human driven cars, so insurance costs will also drop.

RethinkX, estimates that, from day one, the cost of a ride in an autonomous taxi will drop to around 10pc of current prices. So that 10 dollar ride to the other side of town will cost just one dollar!

At that price, who needs a car?

According to RethinkX, car owners stand to gain several thousands of dollars each year if they give up their vehicles in favour of what they are calling "Transport as a Service" (Taas). This saving will be the equivalent of a 10pc pay rise. Not only that, but they also believe that costs will continue to drop.

What if you don't live in a city?

Autonomous taxis will begin to be used in a small number of urban areas but as the technology improves, government regulation is put in place, and public acceptance improves, they will be rolled out more and more in towns, cities, and, eventually, into rural areas, too.

There will be no shortage of companies waiting to enter the market: most, if not all, major car manufacturers are conducting research into autonomous vehicles and electric cars; ride-hailing companies such as Uber and Lyft are forming partnerships with car manufacturers to provide autonomous versions of their, already successful businesses.

What about the workers?

There is, of course, a downside. Private cars spend most of their time parked at the side of the road, or in a garage, whereas TaaS cars will be busy most of the time. This means that far fewer cars will be needed for the same number of journeys, and this, in turn, means fewer jobs in automotive manufacturing. Good for the environment, perhaps, but bad for jobs - maybe some companies will go bust, certainly there will be redundancies.

There will also be large impact on the oil industry and also on insurers who will have almost no individual customers,

And taxi drivers? Pretty much, a thing of the past.

On the bright side, the extra money that the average person saves through not having their own car can now be spent elsewhere thus stimulating other parts of the economy.

The environment will benefit. City centres will be less polluted. And because energy is stored in a battery, electric vehicles do not need a constant flow of energy, so they will be able to take advantage of renewable energy sources, such as wind and solar, which can be intermittent.


So, a revolution in the making? Or pie in the sky?

If it all comes true and in the optimistic timescale that some predict (RethinkX suggests it starts in 2020), TaaS will cause a major disruption in industry and society as a whole.

But even if the technology needed is ready, governments will need to develop the required regulations for the use of AVs and this, along with customer acceptance, will likely slow things down.

If not, getting to the autonomous future may well be a bumpy ride.

You can find the IEEE Spectrum article here:

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