Election 2016, or as it is better known, “humans are dangerous” it is time to elect a robot is approaching! While we are at least a century away from handing over the White House to a humanoid, our car keys are ready to go. Last spring, Wanis Kabbaj, a transportation thought leader suggested that our circulatory system could be the perfect paradigm of a driverless future. It is clear from his TedTalk that the biggest obstacle on the road to full autonomy is humans.
After the fatal Tesla crash last August, Bloomberg sat down with John Krafcik, CEO, Google Self-Driving Car Project, for some perspective. Karfcik held no punches and believes without a doubt that the first step towards Level 4 autonomy is taking “the human out of the loop.”
In Krafcik’s own words, “we need to take the human out of the loop. With L4, which is our focus at Google, the idea is, you don’t need a steering wheel or controls because we’re going to take care of everything, and you just have to say, ‘I want to go to that destination,’ and the car will take you there.”
When asked by the interviewer what will transportation look like in 20 years, Krafcik states, “I do think one of the fundamental shifts the transportation world will pivot around is a movement by all the players to recognize that the unit of economic optimization will have moved sometime during this period from vehicles sold to trips provided. Fully autonomous cars are going to be more expensive. Society will find ways to better utilize those assets. Cars are used just 4 percent of their time—96 percent of the time they’re sitting in parking spaces, and each car has somewhere on the order of three or four parking spaces reserved in its name in our great land. That’s a shame, especially for cities.”
According Adam Jonas, head of global auto research for Morgan Stanley, “your car is arguably one of the most underutilized, polluting, time-consuming and dangerous machines on Earth. Consider that cars on average are in operation for only about an hour each day, but they account for 45% of global oil demand and, on average, 3,500 daily deaths worldwide. Add the hundreds of billions of hours people spend annually driving and riding in cars instead of engaging in other, potentially more productive (or stimulating) activities and automotive transportation as practical utility and time-consuming necessity seems ripe for a redesigned consumer experience and relationship. But making an alternative a reality will require rethinking some assumptions.”
For decades, the health of the automotive industry has been measured by the number of vehicles sold. However, as shared, autonomous vehicles become more widespread. Jonas suggests that total miles traveled may serve as a more useful yardstick because it better reflects not only the state of the market but also the industry’s evolving business model.
“Miles” rather than “cars sold” delivers the message that the industry is moving toward some combination of auto sales and incremental sales of auto-based transport. “The sooner investors can make the transformation, we believe the more industry events will make sense over the next 12 to 24 months, as the story of industry disruption likely unfolds,” says Jonas, who first called out the emerging trend of shared mobility as early as 2014, and has since been exploring its ramifications through the auto industry, changes in consumer behavior and the evolving technologies reshaping this space.
Morgan Stanley estimates that in 2030, cars will drive more than 19.6 billion miles worldwide, far higher than the 10.2 billion they traveled in 2015. That pace of growth is much higher than the estimated production of cars and light vehicles during the same period. The natural solution appears to be more shared vehicles. Shared cars—taxis and cars operated by ride-sharing companies, but not car rental—in 2015 accounted for 4% of global miles traveled, but by 2030, Morgan Stanley estimates that number could reach 26%.
“Vehicle sharing can only take your vehicle utilization to about 50%-60% of its full potential, in our view,” says Jonas. “And as long as these vehicles are human-driven, logistical inefficiencies will persist. Autonomous vehicles on the other hand remove the human bottleneck and the economics change substantially.”
Since Jonas’s report last April, Uber has been leading the pack with autonomous mass market tests. Last month, Uber rolled out a major taxi initiative of 100 cars in Pittsburgh. Early feedback reports that it may be too soon to ‘take the human out of the loop’ as there has been numerous sightings (below) of cars going the wrong way on one way streets and fender benders.
In other news, Uber’s trucking division (led by its $600 million acquisition of Otto) made its first successful beer delivery this week. The drive was as described as routine by the driver, as all he did was engage the autonomous mode and climbed into the back seat. Otto’s technology works only on the highway, where it doesn’t have to contend with human variables like jaywalking or kids on bicycles. It maintains a safe following distance, and changes lanes only when absolutely necessary. Unlike Tesla’s Autopilot, Otto’s system is true ‘Level 4’ autonomy. Once the rig hits the interstate, it is entirely capable of the job, letting the human (in theory) deal with paperwork, return calls, or catch up on sleep.
“The technology is ready to start doing these commercial pilots,” says Otto co-founder Lior Ron. “Over the next couple of years, we’ll continue to develop the tech, so it’s actually ready to encounter every condition on the road.”
If he can nail that, Ron says he can make trucking a local profession. “You can imagine a future where those trucks are essentially a virtual train on a software rail, on the highway,” he says. He sees a day when trucks do their thing on the interstate, then stop at designated depots where humans drive the last few miles into town in effect, becoming harbor pilots bringing their ship to port.
Otto’s technology could not come soon enough as the trucking industry hauls 70 percent of the nation’s freight—about 10.5 billion tons annually—and simply doesn’t have enough drivers. The American Trucking Association pegs the shortfall at 48,000 drivers, and says it could hit 175,000 by 2024. Beyond eliminating the need for a hiring spree, autonomous technology will make the roads safer. Some 400,0000 trucks crash each year, according to federal statistics, killing about 4,000 people. In almost every case, human error is to blame.
“We think that self-driving technologies can improve safety, reduce emissions, and improve operational efficiencies of our shipments,” says James Sembrot, who handles logistics for Anheuser-Busch and worked with Otto on the test run.
Sean McNally, a spokesman for the American Trucking Association, concedes autonomous technology can improve safety and efficiency, but he questions the wisdom of turning a 40-ton rig over to a computer. And the federal government has yet to weigh in on the idea.
The reality is the roads are much safer without humans, and the big question we need to answer is if we like being just cargo. If so, then stay off the streets!