Higher-Order Consequences

The first-order consequence of driverless cars, when fully deployed and successful, is that humans will no longer drive cars.  That’s the whole idea.  Cars will be without drivers.  The many Uber rides that I take won’t change that much, except there will be no human driver.

There are higher-order consequences of driverless cars being fully deployed and successful.  One second-order consequence will be the elimination, or at least minimization, of vehicle accidents.  Insurance rates in most states require that premiums equal claims.  So, premiums will plummet, decimating one of the most profitable lines of business for insurance companies.

Elimination of accidents will decrease demands for acute care and rehabilitation.  This is estimated to decrease healthcare costs by $200 billion per year.  A higher-order consequence will be the loss of 25% of organ donors.  Of course, motorcycle riders constitute a disproportionate portion of organ donors, but I have seen no analysis of the impact of driverless cars on motorcycle riders.

It might be similar to the impact on road kill.  The New York Times reported yesterday, in “Full Tilt: When 100% of Cars are Autonomous,” that cars kill 1.5 million deer per year.  Driverless cars will avoid deer.  The result will be 30,000 more deer in each state, half of them dutifully producing 1-3 fawns once or twice a year.

The same article reported that cars kill roughly 25% of the population of Florida panthers.  Driverless cars will avoid panthers.  The result will be a burgeoning population of panthers, which will cause them to move north to Georgia and the Carolinas to find sufficient prey.

You might think the panthers could help us with the deer.  I gained some insight into this possibility via a chance conversation at a local diner last weekend.  A young woman told me that she used to raise rabbits, but gave up because, “The bunnies reproduced faster than I could eat them.”  The panthers are likely to have the same problem.

Another higher-order effect, and likely more pervasive, will be declining car ownership.   Increasing use of car services, equivalent to Uber or Lyft but driverless, will supplant car ownership.  This will decimate the car finance industry.  It will also eliminate the need for garages and parking places.  Owners of car service fleets rather than corner service stations will perform maintenance.

Cars, driverless or not, will increasingly be electric. Yesterday’s Economist reported on wireless charging, so cars will not have to stop for recharging, but may have to slow down a bit to pick up passengers.  Pervasive electric cars will result in substantial decreases of emissions if the electricity used to recharge them is not produced by coal-fired power plants.

The higher-order consequences on the workforce will likely be widely disruptive.  Jobs eliminated will include taxi drivers, Uber or Lyft drivers, truck drivers, service station operators, parking lot personnel, etc.  The design, development, production, operation, and maintenance of driverless cars, as well as the infrastructure they will depend on (see “Full Tilt” above), will create an enormous number of jobs, but the qualifications needed for these jobs are not yet clear.

The higher-order impacts on homes, neighborhoods, and cities will also be pervasive.  Needs for parking, garages, signage, and stoplights will dramatically diminish.  Land devoted to these functions will be repurposed.  Industries supporting these functions will see their markets disappear.

It would be reasonable for readers of the above to argue that this litany of consequences will happen eventually, but not as soon as many expect.  We will have lots of time to adapt.  As a baseline, consider the iPhone, which is celebrating its 10th year.  The iPhone and other smart phones have ubiquitously changed our lives and culture.

The smart phone is really a smart device that includes the phone function.  It also has functions for banking, maps, directions, entertainment, news, car services, and so on, which we have all come to depend on for conducting our daily lives.  This device also connects us to social networks, leading in some cases to thousands of texts to hundreds of friends and relatives each week.

When Steve Jobs rolled out the iPhone, did we expect these impacts?  Some pundits may have, but I doubt they projected such extensive impacts so quickly.  It only took three years, for example, for the iPhone to significantly increase auto accidents attributable to the distractions of texting.  Thus, not all consequences are fully expected.

I think the impacts of driverless cars may follow a similar, somewhat unpredictable, course.  Driverless cars will be “interesting” when they are initially viable for everyday life, rather than just hi tech demos.  People will try them and gain confidence.  All of a sudden, like Uber, it will seem that everyone will be using such services.  The higher-order consequences will soon follow.

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