Economics and Policies of a Highly Automated Mobility System

Autonomous technologies are poised to revolutionize how we move. Commuting time for example may be lowered, giving driverless car users more time to work, sleep, or engage in leisure activities. Road safety is also expected to improve. This is especially important given over 1.3 million lives are lost each year in traffic accidents. And certain populations like older adults who can longer drive, teenagers, and people with disabilities may enjoy the benefits of greater mobility.

Our research examines how automation will affect the cost of transportation and structure of jobs in the economy.

Transportation Cost: Autonomous vehicles are appealing to companies that offer on-demand ride-sharing services as a significant portion of revenue goes towards driver salaries. Removing the driver, then, could represent a profit windfall. However, the changing cost structure brought on by automation may be more complex than envisioned. How will sensors, LIDAR, and other autonomous technology affect the purchase price of these vehicles? Will maintenance costs increase or decrease? How will liability be allocated for autonomous vehicles? The interaction of all of these factors will determine the impact of automation on the ride-sharing industry.

Transportation Jobs: Automation also threaten jobs, including those of taxi drivers, bus drivers, truck drivers, and chauffeurs. However, it will also create a number of new jobs. Autonomous vehicles will require tele-operators to monitor them in the case of unusual events or emergencies. They will require technicians that have thorough knowledge of their design to repair them when something goes wrong. They will need people to design, assemble, and repair the sensors, LIDAR, and other technology required to make automation a reality.

These issues have implications for consumers who choose to individually purchase autonomous vehicles. Subject to capital and operating costs, ridesharing may or may not become the preferred method of travel.