Commercial Autonomous Vehicles: An Analysis of the Effects of Autonomous Vehicles on the Commercial Trucking Labor Force
Early on a summer morning in 2016, an autonomous truck steered unmanned down a 120-mile trek of Interstate 25 carrying 51,744 cans of Budweiser marking the first commercial delivery using a self-driving truck (Bigelow, 2016). Otto, a self-driving vehicle group, acquired by Uber, equipped Budweiser’s standard tractor trailer with a mere $30,000 of standard radar equipment and onboard computer systems. Autonomous technology will eliminate 75% of shipping cost mostly represented by labor via allowing trucks to operate at double their current output ability by functioning around the clock and via reducing environmental impact by improving fuel efficiency utilizing platoon technology (Petersen, 2016). Most importantly the technology will reduce commercial vehicle deaths caused by human error at the rate of nearly 4,000 every year. Otto and other companies such as Daimler, famously the parent company of consumer brand Mercedes-Benz, are pioneering autonomous technology that will automate away more jobs, while driving more economic efficiency, than any recent technological development (see Figure 1).
The trucking industry is a cyclical sector that consists of many corporations and individual contractors that provide the majority of freight movement over land. The industry, overseen by the Federal Motor Carrier Safety Administration (FMCSA) a division of the United States Department of Transportation (USDOT), is reliant on the dense network of United States highway infrastructure and must adhere to a substantial amount of regulation. Trucking has been a cornerstone of the United States economy since the inception of the interstate system in the mid-1950s and has become more prominent as e-commerce and multi-location manufacturing grows. Small towns grew to cities with the advent of the highway system serving the transportation network of the country with motels, restaurants, and auto shops providing millions of jobs along the way.
Autonomous Commercial vs Consumer Vehicle Adoption
According to Morgan Stanley Research, “Complete autonomous capability will be here by 2022, followed by massive market penetration by 2026.” Tesla, the most valuable American automotive manufacturer, has proved Morgan Stanley’s timelines inaccurate announcing in early 2017 that all Tesla vehicles will have the hardware necessary for full self-driving capability. (Ferris, 2017) Tesla’s Autopilot promotional website advertises their Autopilot technology stating that its capabilities compete, “at a safety level substantially greater than that of a human driver.”
Before Tesla’s mass production of autonomous consumer vehicles, Google has been operating a small private fleet of self-driving vehicles under the name of Waymo. The company announced the completion of 3 million miles of autonomous driving, building on it’s 1 billion miles driven in simulation in 2016 alone. Google’s cars drove the equivalent of over 400 years of human driving experience and endured eleven accidents — all of which were due to human error. Chris Urmson, director of Google’s self-driving car program, is more bullish on commercial vehicles reaching mass adoption than consumer vehicles due to their prevalence on freeways. His team, “sees more accidents per mile driven on city streets than on freeways; we were hit eight times in many fewer miles of city driving.”
Autonomous Vehicle Investment
Many companies, like Uber’s Otto, have heavily invested in autonomous-driving technology. Venture capital firms, investment banks, and large auto manufacturers are investing billions in firms specializing in autonomous vehicle artificial intelligence and machine learning, fleet operations and management, cyber security, mapping and localization, computer chips, cameras, lidar sensors, and vehicles. A wave of merger and acquisition (M&A activity), partnerships and consolidation are increasing as autonomous vehicles become more commercially available. General Motors made headlines in March of 2016 when it paid over $1 billion for Cruise Automation, a San Francisco startup researching and developing sensors used for autonomous driving (Buhr, 2017). Cruise Automation founder Kyle Vogt says, “We believe this (Being acquired by GM) is the best path forward to implement cruise tech at a massive scale…this is a ground-breaking and necessary step toward rapidly commercializing autonomous vehicle technology.”
The efficiency gains from autonomous trucks are enormous, benefitting both the consumers of shipped goods and the logistic companies providing shipping services. Despite all the immensely positive effects, the technology will have large adverse effects as well. In the United States alone, more than 3.5 million people are working as qualified professional truck drivers and over 8.7 million employed in the industry at large (American Trucking Associations, 2017). These statistics make commercial trucking the largest profession in America, and the most common job in 29 states (“Map: The Most Common* Job In Every State,” 2017). Autonomous vehicles have the ability to disrupt transportation at a scale unlike any previous technology; however, the technology also brings the capacity to wipe out the largest profession in America.
Commercial Trucking: Labor Force Analysis
Based on data provided by the Census Bureau and assembled by NPR, 3.5 million people are qualified as professional truck drivers making it the largest profession in America and the most common job in 29 states (see Figure 2).
Outside of drivers, another 5.2 million people work in the truck-driving sector who do not drive trucks; this totals to 8.7 million trucking-related jobs provided by this type of industry alone. Almost every good or raw material in America has transported via truck, which demonstrates how the trucking industry intertwines with other areas of the economy like retail, wholesale, manufacturing, and construction sectors. The trucking business encompasses much of America’s middle class and yields drivers an annualized income of roughly $40,000 (American Trucking Association, 2017).
An average trucking salary represents a higher income than 46% of all tax filers, including married households (Wall Street Bonuses and the Minimum Wage, 2016). Most truck-related employees do not have a college degree, but being employed as a truck driver, can provide a stable income for the individual as this title does not require any post-secondary schooling. The lack of reliance on post-secondary schooling also provides workers a path to a middle-class job without the need to take on a substantial amount of debt for schooling. However, despite the necessity for such jobs, the possible elimination of this whole class of blue-collared workers is at risk due to self-driven trucks supported by both companies and the United States government.
Autonomous Vehicle Adoption Rates
Car companies, investment banks, and market research companies have pegged mass commercialization of autonomous vehicle technology at different periods of time. Navigant Research, a market research and consulting team that provides in-depth analysis of global clean technology, says, “By 2035, sales of autonomous vehicles will reach 95.4 million annually, representing 75% of all light-duty vehicle sales.” IHS Automotive, an automotive market research agency, says, “There should be nearly 54 million self-driving cars in use globally by 2035.” ABI Research, a research firm specializing in business cycle research, says, “Half of new vehicles shipping in North America to have driverless, robotic capabilities by 2032.” The reassuring theme throughout all of these estimates is a massive disruption starting somewhere between 2020 and 2030.
Autonomous Vehicles Beneficial Economic Impacts
Automakers, software development companies, and logistic companies alike hope to take advantage of the whirlwind of efficiencies these new technologies will bring in the form of profit for their shareholders and investors. For example, many of these companies focus on creating new automated trucks to help a company reduce its labor-related costs, increase efficiency, reduce fuel consumption, and expand on the impact of profitability and earnings. Morgan Stanley Research compiled information regarding the bull, base, and bear case of these savings (see Figure 3). Their calculations assumed $158 billion per year in fuel savings, $563 billion per year in accident savings, $422 billion per year in productivity gains, and $149 billion per year in congestion savings (Lewis, 2014).
Lack of Qualified Labor within the Growing Trucking Industry
Publicly traded logistic companies are forced to worry about delivering value to their shareholders and will require 21% more truck driving jobs by 2020 (American Trucking Association, 2017). This demand is going to spur an increasing shortfall in drivers, with over 100,000 jobs open and unable to find drivers to fill them automated technology will be fast-tracked through regulation to ensure that American logistic providers can sustain demand (Self-Driving Trucks Are Going To Hit Us Like A Human-Driven Truck, 2016). The growth of e-commerce and multi-location manufacturing will be a key force in the United States GDP and regulators at the USDOT & FMCSA will face pressure from all sides to approve autonomous driving technologies at scale.Despite resistance from commercial drivers and trucking-related industries, the advantages of self-driven trucks are disproportionally larger than the disadvantages. For example, autonomous vehicles prevent and decrease many consequences linked with driving long hours on empty roads and will reduce accidents on a vast scale, 94% of which are caused by human error saving roughly 4,000 lives annually. Automated trucks are built to prevent car accidents which connect to a trucker’s drowsiness at the wheel, their distractions, if they are under any substances such as alcohol or drugs, or are merely looking on their phones instead of on the road and the cars around them (Drug use high among commercial truck drivers: study, 2013).
Lack of Qualified Technology within the Growing Trucking Industry
However, there is an ongoing debate concerning the safety factors and reliability of self-driving trucks. Bob Costello, Chief Economist for American Trucking Association, indicated that there are factors that cannot become altered that may affect the technology in these new type of trucks such as, “weather or electrical storms, ice, blizzards, and tunnels where GPS could be compromised.” Once GPS becomes comprised the autonomous vehicle must rely on on-board guidance systems and sensors, which become less reliant in acclimate weather, to guide the truck to its destination. In 2017, Daimler’s solution for this issue is to have the truck automatically pull over and await human guidance — yielding the autonomous technology useless. David Heller, Director of Safety and Policy for the Truckload Carriers Association (TCA), articulates that technology could go to a certain extent to eliminate factors that could prevent car accidents and improve efficiency, but it would be nearly impossible to completely become fully safe because truckers would have to consider other drivers on the highway, weather, and outside influences that could also contribute to car collisions.
Human Monitoring Required in Early Stages. Daimler and Otto’s autonomous commercial driving systems that are undergoing testing throughout Europe and Nevada all are accompanied by a human driver while the truck is autonomously navigating. The trucker who is monitoring the automated controls could potentially fall asleep and during a dangerous situation would not be able to regain control of the truck. This potential downfall of the early state of the technology could cause even more accidents than if the driver was fully conscious and driving opponents argue (Oremus, 2016).
Multi-system Compliance. For autonomous driving functions to work at their maximum potential, the systems need to communicate to each other between multiple truck and equipment providers (Truck Platooning & Automation, 2017). For example, a Daimler truck would need the ability to communicate to a Volvo truck and visa versa. These paradigms are hard to initially define as regulation will not follow until more commercial accessibility is achieved and compliance between systems will not be mandatory (see Figure 4). Companies that are spending billions on developing autonomous driving technology will fight for their standards to be the compliance standards forcing other companies to change their systems or fold (Lewis, 2014).
Autonomous Equipment Security. Not only is there concern over the technology itself, but also the probability of hacking into a company’s self-automated truck and being able to change the settings of the software inlaid in the truck’s system. The SAN’s Institute, a private U.S. for-profit company that specializes in information security, published a white paper entitled, “Developments in Car Hacking.” Author Roderick Currie was able to demonstrate the ability to completely take over a Jeep’s onboard computer system allowing him to steer remotely, give acceleration, apply brakes, change the radio station, move seats, lock doors, open windows, and control any other electric function that the car maintained. As more cars follow Jeep’s lead and are constantly connected to gather and share data the prevalence of car hacking will grow.
Public Policy and Autonomous Vehicles
Local economics throughout the United States become threatened by the advent of self-driving trucks and the loss of jobs that autonomous fleets bring with them. The adoption of autonomous driving technology could potentially lead to economic devastation as stable middle-class labor market could be eliminated and affect the local community as a whole; including, restaurants, motels, and auto shops. Many scholars, policymakers, and politicians are skeptical that this might be a major policy problem in the incoming decades because of the current rise in unemployment rates and a shift in autonomously piloted trucks. Policymakers are resistant to support automated trucks in most states due to the high amount of risk to the public welfare from long-term and short-term haul trucking services switching to automation (Bigelow, 2017).
Autonomous Vehicles on Human-Dominated Roads. The introduction of autonomous vehicles mixed with human operated vehicles could increase accidents and collisions as humans have not shared roads with computer systems, which is a concern towards public safety for politicians. Another reason why politicians are concerned with public safety is the fact that Google’s technology, “requires mapping every inch of the nation’s more than 164,000 miles worth of highways”, but this mapping requires constant remapping because America’s geography constantly changes. “You’ll have to teach the computer system what to do in a blinding snowstorm on Wolf Creek Pass,” as stated by Lee Gomes, a writer for the MIT Technology Review. Gomes illustrates an example of how near-term changes could drastically affect the autonomous truck’s ability to perform as efficiently as it should and could raise the chances of risk for the truck driver monitoring the truck itself and those driving nearby. However, “according to Google’s experience, the greater danger lies within cities and not freeways, and driving between cities involves fewer technological barriers than within them” which is the biggest objective many states do not advocate for full-time self-driven trucks as these trucks would have to go through cities and towns to deliver their commodities.
The advent of autonomous vehicles will introduce technology that will automate away more jobs, while driving more economic efficiency, than any recent technological development. Despite political challenges due to job loss, economic gains for corporations and consumers alike mixed with improved roadway safety far outweigh the opposition to automated technologies. Autonomous vehicles will cause the largest job displacement modern society has ever witnessed. Although, fiscally the adoption of autonomous technologies will yield a positive aggregate of $1.5 trillion annually while saving over 4,000 lives each year. Every major technological advancement, since the printing press, was faced with mass adversity from job loss. However, not a single advancement was able to be stopped, and the adoption of autonomous vehicles will prove no different. The early summer morning in 2016, when the first an autonomous truck steered unmanned down a 120-mile trek of Interstate 25 carrying 51,744 cans of Budweiser marking the first commercial delivery using a self-driving truck sparked an economic incentive that will not and cannot stop. H.G. Wells famously stated, “adapt or perish,” and those in industry who do not adapt will perish, and autonomous technology will drive on.