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ESSA

Uber’s driverless cars: the road ahead


Neala Guo

By

August 20th, 2017


Neala Guo explores the driverless cars that might take you to and from work in the not too distant future — and the rocky road ahead for anyone involved in the car industry.


At the annual World Economic Forum, then-Uber CEO Travis Kalanick (pre-resignation), oozes confidence just short of arrogance, as he reveals that his team is at that precise second trialling their cool, new, self-driving cars in Pittsburgh. He goes on to lament the tragedy of road accidents, and speaks passionately about conquering human error through autonomous vehicles, a feat that will save millions of lives. Several members of the audience roll their eyes, suspecting, perhaps rightly, that the cunning CEO is in actual fact more interested in gaining an upper hand over Google than he is with the bettering of humankind.

Nevertheless, what are we likely to gain, and lose, if Kalanick’s successors achieve his goal of an entirely driverless Uber fleet by the year 2030?

The appeal of Uber lies in its short waiting period. And this gets even better with automated cars. The rejection of the traditional yellow taxi cab in favour of somebody’s SUV suggests that the modern-day human regards time as of higher importance than service quality. It takes a half hour on average for a cab to roll up, while an Uber driver can manage under five, no sweat. No wonder taxis are becoming the 2017 equivalent of CDs.

Impatient workers will be thrilled to hear that it will only take on average thirty-six seconds for an Uber to arrive at one’s home — and to think we once viewed anything under five minutes as impressive! This means that us Uber-users can expect to cut back on hours spent twiddling our thumbs in seemingly endless and monotonous traffic jams.

And what is to become of all those major automakers – Ford, Toyota and General Motors? History has a lot to say about what happens to competitors in the wake of digital disruption. Indeed, the demise of the taxi industry should have taught us something about sussing out a monopoly business in its early stages.

Uber was able to establish itself as a “better services, lower prices” player in the market very early on, helped by the springboard of risk capital acquired from private investors. The launch of its complementary food-delivery service, UberEATS, merely boosted its market leverage and has proved a hit through clever partnerships with the likes of McDonalds.

The decline of the taxi industry was inevitable in hindsight — and it could be inevitable for the automobile industry too.

Uber’s leaders are unlikely to have qualms about their company swallowing up the automaker industry. And automakers have little chance of surviving this latest addition to the ruthless digital disruption that is Uber. After all, if Uber goes driverless, followed by most of the automobile industry, who would want a car you need to personally drive with your own two hands, aside from Luddites and hobbyists?

Also on the menu is economic slump. The automation of jobs in the Uber industry means a large chunk of Uber’s workforce may cease to exist, along with those employed in the automobile industry in general. We could very well be seeing the collapse of the $198 billion automobile insurance market, the $100 billion parking industry, and the $300 billion automotive aftermarket in the U.S alone. After all, robots don’t need insurance or valets, and modding a car that you might never drive yourself might not quite have the same appeal.

We all know that less jobs equal less consumer spending. An economy built on consumer spending will hit a pothole in the road (pun intended) if customers don’t have enough money in their pockets. This means less consumption of goods and services, which is a recipe for recession. Cars that drive themselves may be a win for climate change and road safety, but they are sure to hit our economy hard.

Lastly, what burden will the driverless car impose on the state? It is arguable that the coming years will lead to a “mancession” — where industries traditionally dominated by males decline in their ability to provide a stable and well-paid job. Given the subsequent anger that is almost certain to result from this, not to mention that these men are likely to have multiple mouths to fill, it seems only fitting to introduce a policy of universal basic income to remedy this astronomical loss of jobs in the industry. This has been  suggested by Paul Mason in an opinion article in The Guardian, amongst many other thinkers.

However, as Mason rightly points out, unless this covers all a family’s needs, the state is obliged to provide homes, education, training programs for upskilling obsolete workers, and healthcare almost for free. This will no doubt prompt indignance from taxpayers, who will have to bear the costs. The state’s task at hand will therefore be guiding a substantial part of the workforce through massive social and economical uprooting (or “disruption,” in the language of the 21st century).

It will be interesting to see if and how these predictions play out. Much of it will depend on how the public are willing to let a machine take the wheel.

The views expressed within this article are those of the author and do not represent the views of the ESSA Committee or the Society's sponsors. Use of any content from this article should clearly attribute the work to the author and not to ESSA or its sponsors.

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