Why CEOs Shouldn’t Ignore Autonomous Vehicles

ASU/Thunderbird professor and Chief Executive contributor Jeff Cunningham brings CEOs up to speed on autonomous vehicle technology—and why it could be a game-changer for their organizations. This is part 1 of 2. Click here to read part 2. 

Autonomous vehicles — essentially driverless cars — have the potential to turn commuting from what is largely a waste of time to a productive stretch, as well as improve the environment and reduce traffic congestion. But they also could put many of us out of work.

According to the U.S. Census, 130 million of us spend an hour every day commuting to work, mostly by car. That’s 130 million hours, sitting in traffic, amounting to 15,000 years of largely wasted human capital — every day. Even if you ask people who take public transport what work they do while commuting, they say listen to podcasts. Okay.

Yet autonomous vehicles have the potential to allow us to reclaim many of those hours. Imagine, for example, that you are a working mom. You open up your autonomous vehicle app and request a ride to work. (Your employer subsidizes the cost of the service.) Five minutes later, a luxury Mercedes van pulls up. Your children pile in with you until the first stop, when they transfer to a second autonomous vehicle that takes them to school. By this time, you have solved that nagging math problem your son didn’t quite get done last night.

“Chief executives who haven’t thought about the reality of driverless cars because they aren’t widely deployed are making the same mistake a previous generation made when they scoffed at the idea of ubiquitous Wi-fi.”

Now you relax, put on your headphones, and listen to Chopin. Twenty minutes later, you receive a text asking you to join a conference call. The computer screen by your chair is flashing a Powerpoint presentation. (Alas, in this particular future, we haven’t gotten rid of those.)

After the call ends, three of your coworkers climb aboard, and you resume a meeting that began yesterday. It continues until you arrive at the office. Before you leave the van, you hand in a laundry bag and a shopping list so that by the evening, the laundry is done, and the grocery bags are full. The van lets you out at the office. You take a cup of java to go.

Ask yourself, have you spent an hour commuting, or have you just had the most efficient work hour of the day?

The Autonomous Future Has Arrived

Autonomy will change the nature of where, how and when we work, and will also force us to rethink about how we spend our time. It will change the value of resources like the cost of living close to the office. Along the way, it is going to disrupt and create new industries, affect real estate values, and improve the environment.

But for our purposes, in terms of speed of adoption, it’s not coming, it’s happening now. Chief executives who haven’t thought about the reality of driverless cars because they aren’t widely deployed are making the same mistake a previous generation made when they scoffed at the idea of ubiquitous Wi-fi.

According to Internet of Things Journal, a recent study concluded the world market for automotive semiconductors will grow from $30.3 billion in 2015 to $41 billion in 2020. The markets for self-driving auto sensors and cameras are also expected to grow exponentially in just a few years.

The Government Is Here To Help

There are no rich skeptics in Silicon Valley. This mantra is especially true of newer technologies like autonomy. Just ask anyone who invested $10,000 in Uber’s seed round when it was valued at $10 million — and who has seen their investment grow to over $50 million. Those who scoffed are kicking themselves. Or taking taxis.

Savvy companies that get the importance of being a first mover are taking a home brew approach and developing their own proprietary technology, like Mercedes, Uber, Google (Waymo), and Tesla. Others have cut billion-dollar deals to catch up, like General Motors’ recent acquisition of startup Vogt.

It’s happening in commercial transport, too. Uber recently launched a driverless truck division, Otto, garnering national headlines. The company completed its first test drive using driverless technologies, driving autonomously for 120 miles in Colorado with a trailer full of Budweiser.

As we said, of national importance.

Now, the government is getting in on the act.

In May 2017, New York Governor Andrew Cuomo announced the state would start testing autonomous cars on public roads, following similar decisions in Nevada, Florida, California, and Michigan. Then, on September 6, the U.S. House of Representatives unanimously passed the Safely Ensuring Lives Future Deployment in Vehicle Evolution (SELF-DRIVE) Act, which permits an increase in autonomous vehicles to 100,000 within two years from 2,500 today.

Two years from now in government time is tomorrow. Why are they moving so quickly?

First, given their dependence on technology, not human drivers, autonomous vehicles are presumed to be safer. In 2016, according to National Safety Council estimates, 40,000 Americans were killed in car accidents and there are over 100 casualties treated in an emergency room for each death, at a cost of $33 billion in 2012. Fewer car accident victims, injuries, and deaths would affect costs and change longevity rates — and, consequently, the insurance and healthcare industries.

Still, self-driving vehicles aren’t accident-free, not yet anyway. Artificial intelligence will eventually allow the removal of “safety drivers,” but not immediately. (If you can hail an Uber self-driving car — in Pittsburgh today, and shortly from Waymo and Cruise — you’ll notice they have “safety drivers” sitting in the front seat.)

Second, the government hears the call of energy conservation and climate change. Through ride sharing, we can expect to see as much as a 75% reduction in automobile traffic by adopting the Uber concept, and according to the Centre for Integrated Energy Research, up to a 45% savings in energy consumption.

Read more:
Understanding the Impact of Autonomous Vehicles