Here's the commercial bottomline. Driverless technology is a dream come true for car manufacturers. They can at last offer fresh appeal to the consumer that goes beyond the cosmetic and trivial. Having a car that can drive itself 90% of the time, so you can sip your coffee and even play on your phone, is an advantage that will make plenty of people hungry for a brand new car.
However, level-5 automation (which is where the car does everything and requires no human supervision at all) is a car manufacturers nightmare, because Level-5 automation means robotaxis. And robotaxis will provide a service that will decimate new car sales.
Think about this. You dial up a car with one touch of an icon, it gets to you in 60 seconds, it drives you (or you drive it, if you like) to the front door of your destination, and once you get out you simply press the "log off" button and the car moves on to the next customer. And because most cars would be super efficient single-seaters, to match real demand, it will cost about a third of what you pay for your traditional car - not including parking savings.
It's obvious. Once a commuter robotaxi system comes out, people will see that most cars will be close to going the way of the CRT screen - that is, not even worth the real estate they occupy. Who's going to buy a new car for $50,000 feeling sure enough that they won't be able to sell it for $2,000, just a couple of years down the track? Nearly no one.
Have the automotive manufacturers worked this out? They're not stupid. Of course they have.
I've already described the Step-1 for implementing a practical robotaxi system, which could have been initiated five or more years ago (see here). Clearly you should employ small commuter cars first, and those commuter cars should operate in driverless mode only when empty-sending themselves to customers.
Safety risks are trivial with a tiny car that's nearly impossible for pedestrians to miss, and weighing a mere third of a conventional sedan. To stress, when people use their commuter car, it will not be operating as a driverless car. To start, people should have to drive the cars themselves so to eliminate all concerns (real or perceived) associated with riding in a driverless car. Full driverless operation can come later.
With this simple model, alone, your robotaxi network will support at least 70% of urban transport demand and collapse new car sales to the end of it, bankrupting all the major automotive manufacturers overnight. At this point, nearly everyone will choose to hold onto their existing car or buy secondhand, over buying new.
Automotive manufacturers (and software developers) want robotaxi like you and I want a hole in the head. If they say they're trying to build a robotaxi system, you can bet your left arm that whatever it is they're creating it will be designed to fail - or be prohibitively expensive. They'll co-opt robotaxi only to kill it - and kill its publicly perceived potential.
But what if automotive manufacturers are in love with helping the world, and wilfully fall on their sword? If car manufacturers don't try to kill robotaxis they are abandoning their responsibility to shareholders, which is literally criminal. The corporate machine is designed to make money - only. Robotaxis must die if they can be rid of them. Nothing personal. People are lovely but the corporate machine will dictate.
This is why, I believe, every example and discussion on driverless cars that I've thus far seen never brings my simple model to attention. All proposed robotaxi systems are hugely expensive, do not match real demand, and are loaded with safety risk-factors that do not need to exist. The CEO's are doing their job? Probably.
And this leads to my conclusion. What we're seeing is a market failure. When monopolistic dynamics seriously interfere with [otherwise] capitalism at its best, then this is where we can argue for the government to step in.
It might be time for governments to investigate the conflict of interest between robotaxi development and the drive for new car sales. From there, the government can choose to develop a basic robotaxi system for themselves - and be the first competitive force to hold the automotive industry to account.
Car manufacturers are not going to fall on their swords, so maybe we need government to give them a little hand?
-Andrew Atkin
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