26 September 2011

Bring on the driverless car!

Marginal Revolution | Tyler Cowen | Driverless car navigates Berlin streets
It can talk, see, drive and no longer needs a human being to control it by remote. The car of the future — completely computer-controlled — is on the streets of Berlin.

All summer, researchers from the city’s Free University have been testing the automobile around the German capital.

The vehicle maneuvers through traffic on its own using a sophisticated combination of devices, including a computer, electronics and a precision satellite navigation system in the trunk, a camera in the front, and laser scanners on the roof and around the front and rear bumpers.
This is working — now — all we need is to have the price tag fall from 400,000 euros [$539,000] to a bit lower. It’s already safer than human drivers. The article is here, hat tip to Steve Silberman.
I have little doubt wide-spread adoption of this is going to be technologically feasible within a couple of years (if, indeed, it is not already). The obstacle is going to be entirely social/political.

That made me pretty pessimistic about their rate of adoption. However, is that bar set by the most willing country? That is, if Germany or Japan or Singapore or Sweden allow these on the roads, does that mean the US will have to follow suit quickly? What other consumer technologies have been demonstrated safe in one nation but not allowed in others? Let's ignore something like the erstwhile Irish ban on condoms, where the objections were never safety-related. Many medical innovations are disallowed after having been adopted in other countries. The objections seem to primarily be to keep costs down. The FDA is also better able to hide behind FUD when it comes to advanced cancer treatments than something like an automated car which can be seen and understood by the common man.

As to the economic obstacle, how much lower would the price really need to get? For consumers, very much lower of course. But what about for taxi companies? The median American cabby makes $31,500. Figure it costs the cab company 25% more than that in insurance and other overhead, so they spend $40k/year per driver. (Is there usually one car per driver? Maybe not in NY, but based on personal anecdotal experience in DC I think there typically is, so I'll assume so.)

The median car in America is eight years old. The average cab probably wears out sooner, but a computerized driving system would likely be able to put less wear-and-tear on the car, monitor itself for preventive maintenance better, etc. So let's say you've got an eight year lifespan on your cab.  (And that the electronics kit that automates the car can't be pulled out of it and put on another vehicle when the original vehicle wears out.) So the cab company is paying $320,000 for drivers over the life of a car. The automated driving system also probably gets you better fuel economy. Plus the dispatch system could be fully automated. Plus you would never have to worry about drivers not wanting to go make an inconvenient pick-up.

The savings for the cab company could easily be $400,000 already. With a little exchange rate movement this could be within practical range rather quickly.

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