The Unintended Effects of Driverless Cars

Google has been working on driverless cars for a few years now. The obvious selling point is that the cars will be much safer without a human behind the wheel.

Currently, a car spends 96% of its time idle. Compare that with planes which spend almost their entire lifetime in operation/airborne. Idle planes aren't making money, and they need to recoup their hefty $120M price tag. There is an unforgiving economic incentive to make sure it is always in use.

The proliferation of driverless cars will have a similar effect. Cars will spend less time idle: why would a household buy 2 (or even 3) cars, when they only need 1? Ride to work, then send the car home to your spouse. Need to go grocery shopping, but your kid also needs a ride to a soccer game? No problem, a driverless car can handle that.

What will begin as households cutting back to a single car, will expand. Why would a family need an entire car to themselves? That's crazy! It may start as extended family in the same area sharing cars, then neighbors sharing cars, and then entire apartment/condo complexes in cities offering driverless cars bundled into their HOA/rent.[2]

The operating percent of a car will go from 4% to that 96%. But back to my leading statement: there are unintended consequences. Parked cars will be a relic from the past. What happens to car insurance prices if a driver is no longer part of the equation? And if cars are receiving 20 times more actual use, that would imply that there would be 20 times less cars sold.[1] This is the kind of disruptive change that can reshape the automotive industry. The recent GM/Chrysler bailout may have been for naught.[3]

[1] Of course, this isn't exactly the case, as the cars would need to be replaced more often due to nonstop usage, but the point stands.
[2] Hell, I'd share a car with my condo complex. I currently don't own a car, I walk or take taxis basically everywhere.
[3] Of course, car companies realize this. And I can guarantee you, they will lobby against driverless cars.
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