The New Road Rage: Driverless Cars

Google’s driverless car

by James A. Bacon

The automobile industry may not be anybody’s idea of a dynamic business sector, but it is highly competitive and more innovative than people give it credit for. The latest example is the research being conducted on driverless cars, which Bloomberg Business Week predicts could become the new “road rage,” a sci-fi dream that “could be real within a decade.”

Needless to say, no-hands cars would scramble everything we think we know about transportation preferences today. On the positive side, automobiles  equipped with laser sensors would allow them to travel much closer together, increasing the capacity of existing roadway and reducing the number of accidents. Driverless cars also would provide more independence for the elderly and the disabled. Furthermore, people could do something productive with their drive-time, like reading, answering email or surfing the Web (OK, maybe that’s not so productive), instead of listening to talk radio. On the other hand, driverless cars potentially would put more people (and cars) on the road, aggravating traffic congestion. It’s hard to say how it would all play out.

There is, however, one factor missing from the breathless Bloomberg Business Week article, in which the only sign of skepticism is whether the technology really will be ready for widespread commercialization within 10 years. Here’s the big question: Will driverless cares be affordable? There was no indication in the article how much driverless systems would cost. Equipping cars with all those lasers, sensors, GPS navigation systems, artificial intelligence and who knows what else will be expensive.

The cost of automobile ownership is already slipping beyond the financial reach of more and more American families as it is.  (See “The Era of Foreclosed Possibilities.“) Meanwhile, other factors are driving costs higher. The Obama administration has proposed mandating an increase in U.S. car-fleet fuel efficiency from 27.3 miles per gallon today to 54.5 miles per gallon in 2025. The Heritage Foundation says the mandate will add $2,000 to $2,800 to the sticker price of a car. Admittedly, that would be offset by lower gasoline expenditures, but it does not account for an increase in the number of injuries resulting from lighter cars and concomitant cost of insurance.

Americans will not wake up one day to find that the technology fairy waved her magic wand and converted the entire motor vehicle fleet into driverless cars. Most likely, the new-car market will bifurcate into two tiers with auto makers packaging driverless cars for the high-end market and selling the old-fashioned dumb vehicles to middle-class Americans. And don’t forget the 10 years it takes to turn over the automobile fleet. Those two factors mean that a lot of dumb cars will stay on the road for a long, long time. Will the putative benefits of reduced traffic and improved safety materialize if only 10% of the cars on the road are equipped with lasers and sensors that allow them to communicate with other cars? One way around that problem would be for government to mandate use of the driverless technology. But another mandate would put the price of cars beyond the reach of even more Americans.

Personally, I would love to own a driverless car, especially on those long, boring rides to visit family or escape to the beach. While my wife whips out her laptop, switches on her Verizon air card and answers business emails, I get stuck behind the wheel. Grrr. If a driverless car came equipped with a computer screen that would let me play Civilization, read a book or post content to Bacon’s Rebellion, I would pay almost any price! But I suspect that most Americans would deem driverless cars to be a luxury they cannot afford.

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12 responses to “The New Road Rage: Driverless Cars”

  1. Groveton Avatar


    I believe you are thinking about this the wrong way. Once a car is driverless, you don’t need to own it. Why bother. Just use your cell phone to order one when you need to go somewhere. The driverless car nearest to you will come over and pick you up. Swipe your credit crd at the end of the ride and bid it adieu. Or, pay for it to wait while you run errands.

    From there, it’s fairly easy to imagine the software required to aggregate trips. If my neighbor and I are both going to head to the local tavern to watch college football, the dispatch software would offer me the choice of a car I take alone or one where I split the cost with my neighbor.

    Once cars go driverless it becomes hard to imagine why you need to own them.

  2. Groveton, now that’s an intriguing possibility — driverless cars as taxicabs using AI routing algorithms… without the taxi driver! That scrambles the entire transportation equation yet again. I like it. When you cash out of your current company, maybe that can be the business model for your *next* venture!!

  3. There was no indication in the article how much driverless systems would cost. Equipping cars with all those lasers, sensors, GPS navigation systems, artificial intelligence and who knows what else will be expensive.


    In the end, it will be much simpler than this.

    Much of those sensors are to figure out where the road is, and then to figure out where the other cars are. This is called non-cooperative control.

    Imagine a bunch of RFIDs embedded in the road, like those little reflectors, each one telling the car unambiguously, you are here, you are here, you are here, intersection ahead. A lot of really hard sensor technology goes away.

    Likewise, you need not sense your eight nearest neighbors if you are talking to them: Iam slowing down, I am speeding up, I am turnng left, I am changing lanes. This is the sway the new aircraft control system will work, with collision avoidance worked out cooperatively and as needed, diverting each aircraft th minimum amount necessary.

    At one swoop, rear end collisions will be eliminated. The uncertainty associated with evaluating the next drivers behavior will be gone. What would be a breathtaking merge for three drivers will be commonplace with negotiated cooperation. This might easily increse the throughput of the roads by a third, while completely eliminating congestion, which is mainly an issue of uncertainty. In times of high volume traffic may slow down but the travel will be smooth and steady, and certainly faster than now. Area wide rerouting may take place with the help of satellite or drone based sensors.

    What we are seeing is a feasibility stage, the final technology will be much easier and cheaper.

    Rear end collision avoidance is already here, but again, it is noncooperative.
    A cooperative system will be much faster and much cheaper.

  4. Imagine eliminating traffic lights with a seamless, negotiated, nonstop, zipper crossing with each opposite pair crossing together with the right angle pair crossing nose to tail with inches to spare! Like the Blue Angels in slow motion and 2 dimensional! It would be a tightly controlled version of the pandemonium in Rome intersections, only faster and with far more throughput.

    You had better be reading your book, because watching it happen will probably scare the pants off you.

  5. I like Groveton’s idea a LOT…. and I’d improve on it by applying dynamic pricing to the equation. The quicker you want a car.. the higher the price….

    AND I’d put that in the car too… where ..for a fee…you get the fastest path to your destination even if it includes tolls….

    this is closer than we think because cars are being built that are capable of communicating with each other…coupled with radar.. which means cars will, in theory, be able to avoid accidents much better than humans who nowdays fiddle with cell phones and other dumb behaviors.

  6. Peter Galuszka Avatar
    Peter Galuszka

    How about aerial drones armed with hellfire missiles doing lazy 8s over Richmond’s West End looking for Jim Bacon? I hear the Obama Administration has such a contingency plan.

  7. They’ll never find me!!! … unless they tap into my cell phone GPS.

  8. I like Groveton’s idea, except for one thing: Americans have proven that they almost always prefer subscriptions to micropayments. We like having our Internet access, television, phone service, all in subscription form, even if paying by the byte or the show or the minute would likely be cheaper.

    So, I suspect what we’ll see is that our car insurance payments will disappear (since it’s ridiculous to require liability insurance of a non-driver), and we’ll be able, instead, to pay perhaps $200 a month to simply joining a driverless car’s network, so that at any time, we can pull out our phone, click “Summon Car,” and not have to worry about how far we are from our next paycheck.

    As soon as driverless car subscription can start coming in well under the cost of a car payment or a lease, I suspect private car ownership will begin to become extremely unpopular. Why put up with the hassles of maintenance, refueling, parking, sitting in a cold car before it’s warmed up, etc., when a car is always a single click away, and, (psychologically speaking, assuming you’re current on your subscription) free of charge?

  9. Oh, and I just want to point out one more likely side effect of driverless cars: I’m willing to bet we’ll see a serious spike in alcohol consumption. I think that the need for someone to drive home from a party or bar is probably the single strongest limiter on alcohol consumption right now. With driverless cars, partygoers can “bar hop” freely, and, presumably, open container laws will cease to apply, so they’ll be able to even continue drinking in the car. And to some extent, even parents at home will be able to relax the “what if there’s an emergency and I need to take the kid to the hospital” mentality, and will probably become much less afraid of drinking once kids are asleep, etc.

  10. I doubt that it’s going to be cheaper … and I seriously doubt those that like to drive solo to/from work the longer commute distances, are going to have an easy transition.

    then we have the gap between theory and practice….

    how long, on average, are you willing to wait for a dispatched car to show up where you are?

    5, 10, 20, 30 minutes, an hour?

    or how about this:

    you can get a car in 5 minutes if you are willing to pay 3 times the normal rate?

    so you login with your cell phone and quickly figure out that it’s a process much like getting an airline ticket… or a parking spot downtown… it’s ALL in how much you’re willing to pay and there are a bunch of people ready, willing and able to outbid you for that car you want.

  11. larrgy, in theory, there’s no reason to believe that a driverless car service won’t be significantly cheaper than using a taxi. A driverless car fundamentally costs about the same as a standard car, plus about $1,000 worth of computer equipment. So even though they’ll first hit the market at $100K, within 10 years they should be down to $25K – roughly the same cost as a taxicab.

    When you pay for a cab, about 75% of what you’re paying for is the cab driver. Take the cab driver out of the equation, and you’re left with something resembling the true cost of having a car take you from A to B.

    My commute from home to work costs $15 via cab, and represents about two thirds of the total mileage I put on my car. So, doing the math, a driverless car service could be profitable charging me only [(15*.25) * ((5/7)*(30.5))] / 0.66 = $125/month.

    Realistically, I expect the service would cost twice that, maybe $250/month – which is still significantly less than a car payment.

    I imagine you’d probably end up waiting less than half as long as you would for a cab, since the fleet would be larger, and there would be no human inefficiency involved.

  12. I don’t disagree … but availability verses cost are going to be more involved as profit will be determined by the least number of cars in the fleet necessary to serve the demand.

    So.. an entrepreneur is not going to buy a fleet that sits idle except at rush hour so then the price for what is available is going to be dynamically priced – like HOT Lane tolls… IMHO….

    whether it’s entrepreneurs or toll road operators… or any business.. having equipment sit idle except during rush hour is expensive… although I’ll admit man-operated taxicabs have similar issues.

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