The idea of self-driving vehicles has been touted by Richard Threlfall, Global Head of Infrastructure at KPMG, as a “transport revolution” with an accelerating rate of innovation. Automotive manufacturers and developers are funneling billions into R&D, and cities and states are establishing task forces to determine whether or not they are ready for autonomous vehicles, AVs for short, to hit the streets. The adoption of this technology is seemingly imminent, as shown in a recent study released by KPMG to which ESI ThoughtLab, the thought leadership arm of Econsult Solutions, contributed. Autonomous Vehicles Readiness Index (AVRI) is the first study of its kind to examine where countries are today in terms of progress and capacity for adapting AV technology. The ESI ThoughtLab efforts were led by Dr. Daniel Miles, Vice President and Associate Principal of ESI and Chief Economist of ESI ThoughtLab.
The AVRI ranked the United States third in progress behind the Netherlands and Singapore. Of the 20 countries analyzed, the US leads the way in AV innovation, which includes work by US and international automotive manufacturers, as well as innovative technology companies, including Uber, Lyft, Waymo to name a few. The US also nears the top in terms of consumer acceptance. However, it gets an average score with regard to having the policies and legislation necessary for AVs. The adoption of national standards would allow the US to better leverage its technological dominance. As for having the necessary infrastructure for the widespread adoption, the US lands in the middle of the pack, mainly due to the low density of electric vehicle charging stations.
However, many questions linger. Exactly how safe are AVs? What are the added benefits of removing human oversight and allowing computers to dictate the driving experience? Do drivers actually want to go from being the operator to simply another passenger?
It has been hypothesized that AVs will transform the entire driving experience, allowing a driver to go from spending his or her morning stuck in traffic, yelling at other commuters (depending on their tendencies towards road rage) to sitting back, being able to do everything from getting a jump on work for the day to watching a movie or even catching a little shuteye. If the hours spent commuting can be put to good use it could lead to productivity gains. An estimation states that increase in productivity can result in an additional $1.3 trillion to the U.S. economy annually. Meanwhile, additional savings beyond fuel consumption from less congestion and enhanced productivity can be expected: using AVs to ship goods across the country in autonomous trucks would make shipping costs significantly cheaper.
It is estimated that 1.3 million people die each year in road accidents around the world. Only 2 traffic fatalities have been attributed to AVs in the US, including a recent accident in Arizona. Put in the context of Uber hitting one million miles last year, Waymo reaching five million in February and Tesla itself having covered over a billion miles now using its various Autopilot editions, it makes AVs appear far safer than operating a vehicle without the assistance of self-driving technology. In fact, federal data shows that human error is responsible for over 90 percent of vehicle collisions, and recently publicized incidents involving AVs have proven no different.
As far as public adoption is concerned, a survey conducted by the World Economic Forum found that 52 percent of Americans are likely or very likely to take a ride in a fully autonomous vehicle, which was slightly below the average of the ten countries surveyed. Other studies have found that of those that would take a ride in an AV, 37 percent of them would do it purely for the experience. People have historically put their trust in a number of technologies they cannot control themselves: elevators have been in operation for well over a century, commercial airlines often utilize autopilot features during flight and a number of train lines around the globe have had unattended automation for decades. Surely AV’s can achieve the level of normality of any of these examples with the help of new technology, and further training for drivers.
A KPMG UK report from 2015 reflected an automotive industry view that fully autonomous vehicles would be available by 2025 and prevalent in the 2030s. Some manufacturers are now claiming they will have vehicles in the market before 2020. Given advances in technology, it is no longer a question of “if” there will be autonomous vehicles but rather “when.” While people differ on how long that may take, one thing for certain is that governments at all levels need to start planning now. Infrastructure investments typically have a long lifespan, usually on the order of 30 to 50 years or more. In order to avoid potentially wasting taxpayer money or frustrating the adoption of AVs, investment decisions made today need to take into consideration the notion that AVs are likely to be a reality before investments reach the end of their useful lives.
AVs certainly have the ability to revolutionize the way human beings get from point to point in their daily lives as well as completely changing the way goods are shipped from their manufacturers to store shelves. Congestion, the stress of the daily commute and, most notably, traffic fatalities, can all be drastically minimized. In order to reach such a goal, further advances in technology, public support and possibly restructuring transportation grids may be necessary additions to the plethora of funds already being applied to this exciting new technology.
Daniel Miles, Ph.D., is a Vice President and Associate Principal at Econsult Solutions, Inc. At ESI, Dr. Miles leads economic analysis projects across a variety of sectors and industries. Prior to joining ESI, Dr. Miles was a Senior Economist in the New York office of Oxford Economics. Dr. Miles received his Ph.D. in Policy with a concentration in Economics from the University of Maryland, Baltimore County.
Michael Murphy is a Marketing Assistant at ESI, and a student at Drexel University studying Marketing and Business Analytics.