Driverless Cars

(Bloomberg) -- The steering wheel may be about to come out of the car. When it does, will passengers get in? Autonomous cars are no longer a technological fantasy. The first robo-taxis with no human minder are scheduled to start rolling through Phoenix before the end of 2018, and by some estimates, more than 100,000 autonomous vehicles will be in use around the world by 2021. Automakers predict a sharp reduction in highway deaths. Yet safety fears may be one of the biggest hurdles facing this driverless dream, especially after high-profile crashes, such as the one in early 2018 involving an Uber autonomous car that struck and killed a woman in Tempe, Arizona. Three-quarters of Americans say they are too afraid to ride in an autonomous vehicle.

The Situation

Since the fatal Uber crash, safety advocates have called on the industry to tap the brakes. Yet there’s been no letup in driverless development, which is attracting billions in investment. Ford Motor Co. and Daimler AG are hiving off their autonomous activities into distinct units in hopes of attracting investments like the $5 billion General Motors Co.’s driverless business received in 2018 from Japan's SoftBank and Honda Motor Co. In Europe and Asia, Audi, Volvo Toyota, Nissan and China’s Didi Chuxing are readying their robots for the road. Self-driving cars are expected to bring in $7 trillion globally by midcentury, according to a report by Intel Corp. and Strategy Analytics Inc. That depends in part on persuading urban consumers to give up privately owned cars and depend instead on autonomous fleets offering “mobility as a service.” Automakers think they can operate such fleets far more cheaply than human-driven taxis and make bigger profits than they have by selling cars.

The Background

The dream of a self-driving car first appeared in the pages of science fiction and then in the General Motors Futurama display at the 1939 New York World’s Fair. Computing power didn’t catch up with our imaginations until the 1980s, when Carnegie Mellon University came up with a robot Chevy van and Bundeswehr University Munich developed an autonomous Mercedes van. Consumers got their first taste of autopilot in the 1990s when Toyota, Mitsubishi and Mercedes began offering adaptive cruise control, which uses radar to automatically adjust vehicle speed to keep a set distance from cars ahead. As the cost and size of the sensors and chips have plunged, autonomous features have proliferated and can now be found in everyday Hondas and Fords. Alphabet Inc.’s Google accelerated the pace of development by logging millions of miles testing its driverless cars, which are now under its Waymo division. Enlisting specialists in artificial intelligence led to big leaps in the computer brains required to run cars without drivers. In initial road tests, driverless cars actually have had an accident rate twice as high as human-driven models — though researchers generally have blamed the humans in the other cars for the crashes.

The Argument

More than 1.2 million people are killed on the roads around the world annually. Car makers say that’s why autonomous cars should be rolled out rapidly, even without answers to vexing questions about legal liability, cybersecurity and the ethics of giving decision-making power to a robot in a life-or-death situation. They also note that autonomous cars would be a boon to the disabled and elderly, not to mention the cyclists and pedestrians who make up a large share of global crash victims. Tech companies and automakers hope to sway consumers with economics: The price to travel through a city will plunge, because there’s no need to pay a human driver or maintain a car, with the ancillary costs of parking, insurance and upkeep. The first robot rides will operate at low speeds. Some self-driving car designers say deployment could come sooner if jaywalking were banned. Critics call that a sign that artificial intelligence is not smart enough to handle the unpredictability of real life on the roads.

The Reference Shelf

• A Bloomberg article outlining the likely early stages of fully autonomous vehicles.
• An in-depth look in Bloomberg Businessweek at the competition between Detroit and Silicon Valley in the race to build self-driving cars.
• Bloomberg Terminal customers can read Bloomberg Intelligence's coverage of driverless cars and the insurance industry.
• A Boston Consulting Group report, “Revolution in the Driver’s Seat,” looks at the technical and non-technical issues surrounding autonomous cars.
• A New Yorker writer went for a ride and asked, “Auto Correct: Has the self-driving car at last arrived?”
• A New York Times Magazine article, “Death by Robot,” on the ethical questions involved in driverless cars and other computer-controlled technologies. 
• Two journal articles examine legal and ethical questions concerning driverless cars.

To contact the editor responsible for this QuickTake: John O'Neil at joneil18@bloomberg.net

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