PREPARING FOR THE DRIVERLESS DISRUPTION

It seems as if everyone is finally talking about driverless vehicles, or AVs (autonomous vehicles) as they are commonly called. Even Tyler Brule, who normally likes to recount some unsatisfactory business travel experience, devoted a recent FT column to the subject.

We know it’s coming; so what can we expect from the driverless revolution?

First the good news. The upside to commuters is massive. Global auto accident deaths, around 1.25 million annually, will be radically reduced.

Our cities will not only be safer, they’ll be cleaner too. By some estimates vehicle emissions in cities cause as many deaths as accidents. AVs powered by electric drive trains will reduce air pollution, giving urbanites an extra few years life expectancy, and making it safer and more pleasant for cyclists and other ‘open-air’ commuters. Because AVs are always on the move there’ll be less demand for parking bays, where privately-owned cars spend 95% of their working lives. Surface level parking bays in major cities will be repurposed into bike lanes, pocket parks, as well as cafes and bars — creating valuable new income streams for municipalities.

What about the downside?

AVs will eliminate millions of driving jobs. Currently the US has 1.8 million truck drivers, and France has 263 000. I have spoken to a number of transport companies about their fate and the answers are much the same: their jobs will be repurposed to cleaning vehicles, security, offloading, signing for deliveries, and assorted logistics tasks. They will have less responsibility and will therefore face a pay cut, but at least they have a job. Hundreds of thousands of taxi, and ride-hailing, drivers will simply be replaced by ‘robo-taxis’. Last year Uber poached 40 robotics researchers from Carnegie Mellon University — so as to compete against the likes of Google, Apple and Baidu — and this week launched free trials of their Robo Taxi in Pittsburgh.

I’m no Luddite, this is the future I welcome. As an urbanite living and working in Paris AVs will increase my life expectancy, improve my health, free up my time, and free up city space for me to enjoy with friends and family. But, I don’t want to live in a city of millions of jobless, angry people. We need to compensate those who will lose their jobs behind the wheel.

In The Second Machine Age Andrew McAfee and Erik Brynjolfsson argue that, unlike before, today’s losers to technology will not be redeployed at the rate they have become unemployed, leading to lower wages and increased joblessness.

It took 22 years (1968 to 1990) for 50 000 French coal miners to lose their jobs as the country switched to Nuclear power. In the US coal mining has lost 150 000 jobs over the last 30 years. Over the same period AVs could eliminate up to ten times as many driving jobs. And, expect major disruption for the traditional auto industry too as the efficiency and enhanced utility of an AV fleet drastically reduces vehicle demand. (I will discuss this in a separate post next week.)

What can be done to soften the blow?

Economist Tim Kane in a study for the Kauffman Foundation shows that the net job growth in the US economy is thanks to startups and that established firms are “net job destroyers” as he puts it. At Autonomy we have signed up 60+ new mobility startups as exhibitors. These companies did not exist five years ago. Governments have to promote startups, and encourage entrepreneurship and innovation. Governments might also need to reconsider the tax on labor and initiate taxes on robots and AI instead. And, if all else fails, then what about instituting Thomas Paine’s idea, mooted in 1797, of a basic income grant? There’s no point building great new products and services if few can afford them.

If we want the transition to new mobility to be a smooth one and not repeat the scenes of taxi turf wars we see all over the world, we need to include the social consequences of new technology into the equation. Google whose main focus is on the lives they can save from AVs don’t mention the issue and I don’t expect to hear anything on the matter from Apple. Uber’s founder Travis Kalanick briefly responded to the question in a recent Business Insider interview. The most vocal has been Baidu’s chief scientist, Andrew Ng as seen in this interview. Its only when powerful thought leaders from different camps engage in a collaborative way about complex issues that we are able to find solutions. Look at this interaction between billionaire Bill Gates and French left-wing economist Thomas Piketty as an example.

It’s fantastic that Google, Uber, Baidu, Apple and others can employ the greatest minds to, as Google put it, “improve people’s lives by transforming mobility”. Yes, better mobility will improve our lives, but it will also eliminate millions of livelihoods. It is only by adding the downside with the upside into the mix that we create sustainable outcomes for better living.

(We will be discussing these and other issues at Autonomy)