The driverless economyJaspreet Bindra
Imagine you are riding your driverless car to the airport. You are stuck in a traffic jam, and you realize that you are not going to make it on time, if it does not clear up. Making the flight is super-important: you might be going to sign a multi-million dollar deal, or meet your family after a long absence. You can always pray, but there could be another way. What if you could empower your car to start negotiating with the other cars to let you go past them – for every car you overtake, you pay $5 worth of cryptocurrency to the occupant of that car instantly? You spend $50, get out of the jam and make your flight. Flight of fancy? Not really. Autonomous smart cars, connected with other cars around it, enabled by blockchain-based crypto money which can be actuated by smart contracts will be a reality very soon.
Autonomous or driverless cars are in advanced pilots today, and various estimates peg them to overtake cars with drivers anytime between the next ten to twenty-five years, depending on who you believe. We know the advantages touted – virtually no accidents saving millions of lives, lower energy usage, less vehicle density, more efficient logistics and transportation, etc.
However, what the above rather dramatic use case illustrates is how they can change our life, our economy and our world in very different ways. Autonomous cars will change large swathes of the economy around us, in many fundamental ways. Let me list out some other, seemingly unconnected sectors autonomous cars will impact:
Real Estate: The first driverless cars were elevators. And they completely changed real estate, as they made tall vertical buildings and skyscrapers possible. The cityscapes changed, central business districts became more and more vertical and the real estate industry changed forever. Horizontal driverless cars will change the industry once again. Living near your workplace, or near the entertainment or business districts, will no longer be necessary as driverless cars could rapidly, efficiently and effortlessly whisk you to them. Suburb living will become more attractive, and the cities will expand. Central area real estate may lose value, as people move outwards
Restaurants and Hotels: A large part of the hospitality industry is built around transportation. Motels, highway restaurants, airport hotels, etc. are built around highways, airports, and train stations. These will no longer be necessary, and the hospitality industry will get disrupted. It will no longer be necessary, for example, to build a great restaurant which is easier for people to get to; you might now build it where you can get local produce or seafood faster and fresher!
Airlines: Short-haul airlines take people between cities, which are a little too far to drive and a little too long for rail transport. Large parts of this might disappear, since autonomous cars would take you between cities without getting tired, as you work, sleep, or watch TV on the way.
Insurance: This is one of the most interesting and much talked about. If a driverless car is engaged in an accident, who is to blame? The car, or the person sitting inside, or the company making the car electronics components? Who should insurance companies insure, therefore? Dramatically less accidents will also mean a huge loss of revenue for insurance companies, as premiums plummet. Global insurance companies are already trying to figure this out, and come to terms with the oncoming disruption
Energy and Petroleum: The parallel fundamental shift happening in the auto industry is the march towards electric. Most autonomous cars will be electric. As they start outnumbering IC-engine cars, the meteoric impact on petroleum companies and producing-nations could pulverise them. Unlike the dinosaurs, however, this is a meteorite that people can anticipate, so companies are racing to face this disruption. Another impact will be on fuel stations: as the fuel stations themselves begin to go away, the whole economy built around them will disappear.
Manufacturing: The other thing about electric cars is that they have very few moving parts – about twenty. An IC engine car has about two thousand. The impact on components and parts manufacturing will be immediate and humongous. Large swathes of small and medium industry will disappear, and in turn endanger economies built around them – Germany, for example or Pune in India.
Retail: Retail is a $28 trillion-dollar industry globally. It is already buffeted by e-commerce, and the next big thing to hit it will be autonomous cars. The impact will be multi-dimensional: store locations will change, so will store sizes. Cars might go to shop, rather than people and so the store systems, staffing and layouts might need to change. Ecommerce will get a massive boost. The small corner shops will be under threat, as you might not need a shop nearby – your car can go fetch stuff for you from anywhere. Convenience stores might become extinct
Alcohol: This one is my favourite. Drinking while driving might suddenly be safe; if you can be safe drinking in a plane, you certainly could in a car! Alcohol companies will discover a whole new market, and fuel stations on highways could have a totally different meaning.
While the alcohol one might seem frivolous, it is quite apparent that a large part of the economy and environment would change due to autonomous cars. It will be how moving to cars from horse-drawn carriages changed things just beyond the mode of transportation itself. Industries, cities and economies fundamentally changed around it.
As we move to driverless cars from horse-less, similar cataclysmic changes will happen.