The Driverless Economy Sponsored By Google’s Car

by JT McGee

Google’s driverless car is a game-changer. Piloted by a hefty dose of electronics, the Google car has traveled more than 300,000 miles without a single accident.

Google obviously thinks this technology has a future, and so do I. I think it’s future is huge. So too does an author at Forbes, who I have to thank for much of what will follow here. Google’s car will not only affect the way people drive cars, but it will have a lasting impact on numerous industries.

Chunka Mui says the Google car will eventually affect:

Car insurance – Google thinks its car would reduce accidents by 90%.

Gasoline consumption and sales – A road with self-driving cars would mean far more fuel efficiency. No more annoying traffic waves!

Car sales – We’ll need fewer cars in the United States if a car can be shared by driving itself to another person, essentially delivering itself to the next user. Every home could be a one car home.

Personal injury lawyers – No accidents, no lawyers!

Real estate values – Prime real estate will no longer be wasted on parking. People who live and work in a metro area could have their car park itself miles away, where land values are lower and parking spaces don’t cost $100,000.

Municipalities and state governments – See ya later, traffic tickets and licensing revenues.

Health care – Fewer traffic accidents mean far fewer emergency room visits. This is good for everyone as there will be more doctors, nurses, and hospital staff in general to go around.

Car repair businesses – Fewer cars and accidents mean fewer repairs and regular maintenance.

The Impact

Mui’s next article in the series (not yet published) is about how Google will make money from their driverless car. Frankly, I don’t think this will make Google all the much money, and by the time it does generate any profits (assuming it does) they’ll have little net present value today. I see this as another example of a company that changes the world and makes no one rich. I’m interested to see what Mui has to say, though.

I’m still wondering if the driverless car will ever be made legal. What, with millions of people out of work (adios insurance sales, lawyers, gas station attendants, etc.), I expect a whole lot of lobbying to keep this from becoming law. Hell, you can’t even pump your own gas in a few states.

Mui’s article makes me realize the ridiculous amount of resources we dedicate to transportation including all the externalities. A Google car can definitely change the way we think about transportation, but can it make Google money?

{ 8 comments… read them below or add one }

tom February 12, 2013 at 13:09

I could see the licensing to use Google’s system and map based software going for billions to the auto companies. They pay a huge licensing fee up front, then a per-car-sold fee, then an annual fee.

Could be worth a lot of money, especially seeing that Google is years ahead of any competitor.

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JT McGee February 13, 2013 at 10:48

Google is definitely ahead of the competition. I just wish I had a reasonable framework for understanding when a technology like this could be adopted. If in the next 10 years, this has legs. 20 years from now? Meh. Investors lose.

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PK February 13, 2013 at 10:31

Not to mention the “driver’s lobby” which is, best guess, like 70-80% of adults. Human driving will probably be pushed to tracks and off-road situation, which is probably a net benefit.

It reminds me of when the Simpsons move to Cypress Creek (http://en.wikipedia.org/wiki/You_Only_Move_Twice) and all of the chores are automated so Marge starts drinking. Too pessimistic?

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JT McGee February 13, 2013 at 10:49

In suburban and rural areas there will definitely be a lot of push back. I can’t see any of the people in the midwest where I live wanting to put a true autopilot on their monster truck.

Having more time to drink is hardly pessimistic. That’s what we’re all looking for, right? More time for BBQs and patio beers!

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Jonathan February 13, 2013 at 13:08

There are many more potential implications. For one, existing services like FlexCar, ZipCar, CartoGo, etc., will increase dramatically as huge segments of the population forego owning their own car altogether. For another, parents would no longer need to serve as “taxis” for children – even young children could “drive themselves” wherever they need to go – school, ballet, soccer practice, grandma’s house, wherever.

If these driverless cars also start talking to each other and become the only cars on the road, traffic jams as we know them today would become a thing of the past. My job analyzing traffic impacts from development would change dramatically.

It’s interesting to think about!

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JT February 13, 2013 at 15:34

These are great; I could definitely see short-term car leasing companies getting a boost. I can say I’m very ready for a world without traffic waves and jams. The efficiency gains would be awesome.

I’ve been thinking about it more, and it’s impact on fuel would be huge, too. Natural gas powered cars could become a thing, since you wouldn’t need that many fuel stations with cars that drive themselves. That removes a significant hurdle to “green” cars.

You should get in good with the Google guys. Maybe they’ll hook you up with an early in on their driverless car project. 😉

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Jonathan February 14, 2013 at 11:07

Haha, I like driving too much for that! Though I wouldn’t mind being on the road with a bunch of computer drivers. That sounds nice actually!

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Brick By Brick Investing | Marvin February 14, 2013 at 20:33

All great points and insights! I think it may be a decade before we really start seeing a mass influx of these cars but I can’t wait until the day comes.

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