Self-driving cars will be hitting the roads in just a few short years, and when they do change will be inevitable.
The development of self-driving cars has the potential to help to make roads safer and lives easier. In the UK, KPMG estimates that self-driving cars will lead to 2,500 fewer deaths between 2014 and 2030. In the US, 33,000 people die on the roads each year, 90% of which are attributed to human error. Self-driving cars are also meant to reduce congestion, as they’re equipped with mapping software to identify and use the most efficient routes.
The first autonomous systems capable of controlling steering, breaking, and accelerating are already starting to appear. Though they require driver interaction, a fully autonomous vehicle that can drive from point A to point B and encounter the entire range of on-road scenarios without needing any interaction from the driver will debut in 2019. Nearly every major car manufacturer has declared plans to sell some form of advanced automation, while Google is investing millions in autonomous driving software. Its driverless cars have been a familiar sight on the highways around the Silicon Valley over the last several years.
While the industries that will be most disrupted by self-driving cars will be the transport, delivery, and taxi businesses, there are many other markets that are likely to see impact. Here’s a look:
Perhaps the most significant of all, the driverless car has the potential to drastically reduce road accidents and the colossal effect on costs and resources with them. The World Health Organization estimates that 1.24 million people are killed every year by car accidents globally. In countries where consumers are fairly new to driving, such as China, safety features are an important selling point for cars. The number of drunk-driving accidents may significantly reduce as well.
Cars today have a rudimentary version of “black box” data recorders to collect information on the moments just before an accident. Insurers have already begun to offer discounts to motorists who agree to use more sophisticated technologies that monitor their driving all the time, and these discounts and savings will only continue. With fewer accidents as a result of self-driving cars, the cost of liability and other issues will be reduced. Not only will costs associated with premiums and payouts be reduced, but also human capital expenses such as accident assessments and other manual needs as well.
With demand for advanced in-car navigation and entertainment systems growing, vehicles are becoming more connected. By next year, cars sold by GM in the United States and Canada will come with fast 4G mobile broadband. Improved connections will also make it possible for cars to send hazard warnings to each other, to receive a constant stream of information on the traffic and weather ahead and even to interact with signals as they approach junctions.
Machine learning and artificial intelligence will mean self-driving software will gain experience and adapt as it is tested—just like a human driver. The difference is that everything it learns will become available to every other car with the same software. Computers do not get tired or distracted and will be far more aware of their surroundings than any human.
In a tricky situation, the computer will do what a human would: brake hard and hope for the best, but do so more quickly and expertly, with the potential for faster or better reaction.
The initial investment into self-driving cars will cost the automotive industry, undoubtedly cutting into profits. Self-driving cars also have the potential to reduce the number of cars needed per household, as well as the number of vehicles within other transportation businesses. This will likely hurt the bottom line as well for many automotive manufacturers. But with fewer accidents, cars may ultimately be less expensive to make long range, as features and other components will not need to be as robust. Digital transportation such as ride-sharing have already moved car makers to invest in technology, opening up new opportunities that may have real benefit.
Disruptions to these industries will without question present challenges and obstacles for the businesses and people within them. But there are potential benefits that each can gain and adapt to, particularly if efforts are already underway to adapt and find ways to harness—versus be marginalized—by self-driving innovation. Just the same, self-driving cars will likely create new and exciting categories, products and services, sparking new business and opportunity. With digital transformation that is likely when—not if—the best approach is to start uncovering the opportunities.