Driverless cars: the benefits and the policy implications

Amongst my colleagues on the Lib Dem Federal Policy Committee and last year’s Public Services Policy Working Group, I’m known as the one who talks about driverless cars, which is both true and unfortunate.

Unfortunate because the rapid advance of driverless car technology (at a pace which makes the construction of new train lines look extremely slow) means that their arrival on our roads will have a huge social and economic impact, not at some point in the far future, but in the next few years – and that means everyone in policy-making should be thinking about their impact.

To take one simple example, the arrival of driverless cars will pretty much wipe out the taxi and minicab industry. Think what that will do to BME communities in areas where minicab driving is dominated by them and where it offers a key entry into the job market for people will thin CVs and little in the way currently of wider qualifications. The social and economic consequences for communities in urban Britain mean driverless cars are a much bigger issue than simply fun futuristic coverage in technology publications.

In which context, a new report published on Canada is worthy of attention both in terms of the scale of the impact it predicts driverless cars (automated vehicles, AVs, in their terminology) will make to that country and also for a transport policy idea:

AVs could play a significant role in reducing current annual road fatalities by 1,600 from the current 2,000 a year. Further, we estimate that the total economic benefit may be over $65 billion per year, including collision avoidance, fuel cost savings, and congestion avoidance. As with any significant technological change, there are winners and losers. The former typically outweigh the latter, but the potential wealth-transferring impacts are as important for governments to understand as the benefits…

Personal expenditures on transportation are one of the most significant expenditure items for Canadian households. We estimate that the total potential cost savings are nearly $3,000 per household, or approximately $2,700 after considering a 10 per cent rebound effect, in 2012 prices and activity levels. This represents close to 4 per cent of the total household budget, or over 5 per cent of total household consumption. The savings could be much higher if we take into account the potential impact that AVs have on reducing freight transportation costs—which make their way into the goods that we buy on a daily basis.

As for the policy idea:

The report assesses the impact of AVs on transportation infrastructure. It contends that no major infrastructure project should be undertaken in Canada without an “AV impact audit” that governments and the private sector should be conducting. Naturally, what such an audit or assessment looks like is subject to debate and discussion as we just begin to understand what the potential impacts are.

The report also quotes estimates for the impact on the US:

The savings for the U.S. are estimated by Morgan Stanley as follows:

• Savings from collision avoidance will be $488 billion—although we note that since the Morgan Stanley paper, the U.S. Department of
Transportation has stated that the 2010 societal cost of road crashes was $871 billion, or the equivalent of 6 per cent of GDP.2 (The direct costs
were $277 billion, or 1.9 per cent of GDP.)
• Productivity gains from regained driver time will be $507 billion—based on average commute times of 25.5 minutes for the U.S., which is similar
to the Canadian average of 25.4 minutes.
• Fuel savings will be $158 billion—based on the improved efficiency of automated vehicles, reduced time spent driving around urban centres
looking for parking spaces, etc.
• Productivity gains from congestion avoidance will be $138 billion.
• Fuel savings from congestion avoidance will be $11 billion.

To give a final example of what this means at a really local level, think of the implication for planning applications and parking spaces.

With automated vehicles will come far greater sharing of vehicles as people just summon a vehicle via their smartphone as and when they need it, and hence a massive fall in the need for huge acres of parking spaces outside developments. But if, as is also very likely, these cars are also nearly all electric, it will also need a very different pattern of electricity supply. Fewer open spaces of prime land given over to slabs of concrete to hold expensive assets being left unused and instead more demands for electricity to charging points in dispersed locations.

Every community will feel the difference and that will start happening in the next Parliament.

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