Self-driving cars are going to change the world.
It’s probably the technological innovation on the horizon about which I am most excited.
Of course, there is the questions of when, but I think the payoffs will be so huge that investment and innovation in this area will happen faster than we think.
Commuting — When we can all send emails or watch YouTube videos or sext or sleep or Skype or write or whatever during our commute, the world will be a better place. And not only will the world be a better place, the world will change…
Real Estate — Once the cost of commuting decreases, people will do more of it. Which means living 90 miles from the office (or coming home for lunch, or working at normal hours instead of waking up at 5am to beat rush-hour). The Bay Area housing crisis will become a lot more manageable when living in Fairfield isn’t such a drag. And because land quantity increases exponentially with distance (think pi-r-squared), real estate costs will become more manageable.
Speed — It’s kind of amazing that the US speed limit tops out at somewhere between 65–80 mph (depending on the state). People were driving at these speeds 50 years ago! Of course, this is a biological and not a mechanical limitation. The speed limit is set (via a somewhat complicated process) based on the speed at which human drivers can safely travel. Once computers can drive, could we have 200mph highways? That would make a 100-mile trip to work quicker than many people’s current commutes.
Accessibility — It’s no accident that one of Google’s first public self-driving car demonstrations was with a blind driver. Self-driving cars will change the world for the driving-impaired. (And that’s not limited to physiological impairments — think of children, the elderly, or adults that never learned to drive).
Delivery — I’m less bullish on this angle, because I suspect driver costs are a relatively small percentage of shipping costs, but I nonetheless have confidence that self-driving cars will accelerate the move away from on-site retail and toward same-day delivery of e-commerce purchases.
Personal Finance — For many Americans, their cars are their most valuable assets, or their most valuable assets after their houses. Self-driving cars will make substantially decrease the cost of renting a car on-demand, which will in turn change many buyers to renters, improving the personal finances for millions of Americans (and of course the effects will be even more pronounced in developing countries).
Other Uses — Uber is something like a self-driving car company (and one day they expect to in fact be precisely such a company). Uber reported a while back that it’s San Francisco revenues are now several multiples of the previous size of the San Francisco taxi market. That is, Uber did not simply take market share from taxi companies, rather it dramatically increased the size of the market. Which is to say that customers found use cases for Uber that nobody anticipated at the start. It seems clear this will be the case for self-driving cars, as well.
Of course, all the wonders of self-driving cars will come along with a host of problems. I’ll write more about those in the future.
Originally published at www.davidincalifornia.com on September 15, 2015.
David Silver 