Driverless Trucks and a Google/Fiat Deal – 5/2/16

Over 100 autonomous vehicles from a dozen manufacturers are now being tested in public. The impact such vehicles will have on economy is staggering as convoys of self-driving trucks threaten to automate away more jobs — and create more cost savings — than any innovation in decades.

With labor representing 75% of the cost of shipping and drivers restricted by law from driving more than 11 hours per day without taking an 8-hour break, a driverless truck driving nearly 24 hours per day would effectively double the output of the U.S. transportation network at 25% of the cost. And adding in fuel efficiency gains only increases savings as the trucks would run at optimal speeds for fuel usage, safety, and scheduling. Since trucking adds to the cost of almost all goods, cost savings will be passed on to consumers as lower prices and higher standards of living.

While the efficiency gains are too good to not pursue, the technology will have equally immense negative effects for the drivers. More than 1.6 million Americans currently work as truck drivers. The loss of jobs will be devastating not only to individual drivers but also to the gas stations, highway diners, rest stops, motels and other businesses that cater to them. So although the average age of a commercial driver is 55 and rising due to the grueling nature of the job, with projected driver shortages set to create more incentive to adopt driverless technology, opposition is inevitable.

A recent demonstration of trucks in Europe making runs sans drivers shows that driverless trucking is coming soon. The primary remaining barriers are regulatory or structural. Highways must be adjusted to account for autopilot quirks like the addition of dedicated lanes for slow-moving driverless trucks and other projects that can only be done with the active support of government. The question will be how long it takes for the prospect of a vastly improved transportation network to overcome the stigma against automation-fueled job destruction.

Autonomous vehicle technology already has its champion lobbyists. Google, Uber and Lyft have already joined forces with automakers Volvo and Ford, in a coalition to influence lawmakers, regulators and the public, Automotive News reported. The new lobby, dubbed The Self-Driving Coalition for Safer Streets, will be led by David Strickland, long-time safety watchdog who was formerly the head of the U.S. National Highway Traffic Safety Administration (NHTSA). The Self-Driving Coalition for Safe Streets will aim to influence regulations allowing rapid adoption of autonomous vehicle technology on the basis of the increased safety of vehicles free from human error.

Fiat Chrysler Automobiles NV recently reached a cooperation deal with Alphabet Inc.’s Google to develop self-driving vehicles to help develop about 100 self-driving prototypes that will be used by Google to test its self-driving technology, the companies said. This agreement is the first of Google’s to integrate its self-driving system.  Google has been in discussions with various auto manufacturers about working together.  The deal comes from a combination of Google’s need for more cars to develop and test its technology and its unwillingness to invest in factories to build them, as well as Fiat’s desire to access Google’s expansive testing records and technical know-how.

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