Tag Archives: driverless

Driverless Cars will Disrupt Auto Industry Entirely

Thesis: Driverless cars will forever change the auto industry and create a more efficient system with less private ownership of automobiles.

Driverless cars are coming, and there is no stopping this massive new industry. The implications and potential impact of this new industry are so large that one could write a hundred blog posts. I will however, due to time, only focus on the personal ownership decreases that driverless cars will cause. This will disrupt the auto industry and completely eliminate some large automakers, unless they jump on board with this new technology, and fast.

As discussed by Chunka Mui in his Forbes article, “Personally owned cars are parked, on average, almost 95 percent of the time, so there is plenty of room to better utilize them through person-to-person car sharing or taxi-like car services.” This astonishing fact on the inefficiencies of current personal car ownership was astounding to me. It really opened my eyes as to the implications and how big this transition really can become. In the current day United States of America, it is almost a necessity to own a car, unless you live downtown in a large city. This is because public transportation is not widely available and easily accessible to all the little towns around. This could be changed by car sharing companies. I picture an app (much like, or possibly Uber) that allows an individual to schedule a car to come pick them up and drop them off at any time of the day. The costs that would be saved could be huge, since individuals won’t have to pay for auto insurance or make car payments every month. As mentioned later in Chunka’s article, “The same studies found that the cost of taxi service could be reduced by 50 to 80 percent by reducing labor cost and increasing operating efficiency through network coordination.” These cost savings will be enough to convince many people to not buy their own car, and instead rely entirely on car sharing services such as Uber.

While opponents to this argue that “The analysts write that “the average driver seems to like personal ownership over the alternatives, and the suburbs still dominate. 80% of people drive themselves to work alone. If people wanted more carpooling or mass transit, we could already make those choices, and we don’t.” This however could be overcome with car sharing. People may not choose carpooling or mass transit options currently because they like the solidarity and alone time of the commute to work. This will still be largely available to individuals to call their own car to take just them to work. A combination of Uber and driverless cars presents a whole new innovation that is ripe to disrupt the automobile industry entirely.