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Will driverless cars mean fewer car owners?
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I heard an interesting argument this week which contemplated the future of car ownership. Currently many households in Canada own two cars which both sit idle for most of the day in separate locations. We use them to get to work/school, then home form same, and perhaps to run a few errands in the evenings but the actual number of hours that they are driven is quite low.

The argument of fewer cars and lower car ownership went something like this p driverless cars are not limited – they can make endless trips all day serving the same family or several families. The same single car could take you to work, then your spouse who starts later, then your neighbour to the dentist then pick up your spouse and take her to the dentist, then the kids from school then you from work, and so on, and so on… I imagine that we would buy something akin to a timeshare in a car and pay the associated costs proportionally to the use we gain. We may be part of a fleet of cars that service a large group of people. Expert Stefan Burstaller calls this “consuming mobility services”.

Estimates indicate that there may be an increase for demand of self-driving cars by 40% in the next 25 years. The costs for these services would be a fraction of what is associated today with car ownership or even taxi use as there isn’t a driver to pay. Currently the average cost of owning and operating a car works out to about 46-66 cents/ km depending on the car driven. They estimate that a self-driving car would cost about 9-11 cents per km depending on if you are willing to share the ride.

The car market and related industries like taxis are about to be disrupted in a massive way. We will have to consider the ramifications of these shifts to our manufacturing and services industries. GM recently announced that it is investing $500 Million US in Lyft a large ride sharing service. The two companies announced that they are working towards developing a fleet of self driving cars and in the meantime GM would be the preferred provider of cars to Lyft to rent.

Although driverless car adoption will be slow there is a strong argument that about ½ the cars on the road will be driverless in North America in 100 years. This will be a slow but significant shift. We have some time to work out the best legislative frameworks for us all.

 

Posted on Monday, Jan 18, 2016 - 01:32:00 PM EST
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