World Class Faculty & Research / August 2, 2017

Trucking to Taxis: How We'll Become Driverless

SMITH BRAIN TRUST — Interstate trucking by 2020 will be first, followed by autonomous taxi service. About half the fleet of U.S. cars become essentially autonomous by 2030. This driverless pathway recently was described for WalletHub by Henry Lucas, Robert H. Smith Professor of Information Systems at the University of Maryland's Robert H. Smith School of Business.

Lucas, who wrote the 2012 book The Search for Survival: Lessons From Disruptive Technologies, set the table with a checklist of the various levels of self-driving cars, as published by the Society of Automotive Engineers and the National Highway Safety Administration:

• No automation
• Driver assistance, like adaptive cruise control
• Partial automation: Driver lets go of the wheel, but watches the road
• Conditional automation: Partial automation, with driver intermittently watching road
• High automation: Vehicle drives itself under the right circumstances
• Self-driving vehicle may ask for help: The stage required for "a true" autonomous vehicle
• Full automation: Driver, and possibly driver controls, are eliminated entirely

Trucking, accordingly, is low-hanging fruit. Interstates are devoid of pedestrians and cyclists and the like. 

On non-interstate highways, "a single safety driver could monitor a convoy of two or more driverless trailer trucks," says Lucas. Though Tesla reportedly is proposing to Nevada and California officials to road-test – minus a safety driver -- long-haul electric semi-truck convoys, Lucas says he “expects by 2020 we will see autonomous truck convoys with one safety driver able to control all the trucks in the convoy from the lead vehicle."

Adaptation for non-trucks will take longer. Personal automobiles produced today are operational for 11 years, on average. Lucas projects some vehicles will feature the "partial automation" level by 2020, with half of all U.S. automobiles reaching that level by 2025. "We are looking at 2030 and beyond" before we get to the "vehicle may ask for help" stage, he says, predicting it will manifest largely via Uber- and Lyft-like taxi service.

"I see a future in urban and suburban areas in which current two-car families own only one car," Lucas says. 

"That [hybrid or electric] vehicle is used for trips more than, say, 20 miles." Taxi services with all-electric, driverless vehicles will handle shorter trips. "Given the capital investment and operating costs, it is hard to believe that using Uber or Lyft could cost as much as car ownership," Lucas says. 

This scenario changes the market for auto manufacturers – as signaled in Ford's recent CEO-appointee from its autonomous division. (Related, via WSJ: “Bill Ford thinks his company lacks vision and that he can fix it.”) As an expanding base of Uber and Lyft operators buy cars, such purchasing from households will decline. And, he says, "taxi and limousine companies will have to change to offer smartphone capabilities and look more like Uber."

Echoing Lucas, a report in the Financial Times recently described the auto industry’s balance of power fundamentally shifting away from automakers “as cars evolve into smartphones on wheels and ride-sharing takes the place of vehicle ownership.”

The ripples will reach insurance companies and the medical industry, Lucas says. "There will likely be fewer cars to insure," and subsequently fewer accidents and injuries and lower insurance costs. "Mechanically, there is less to go wrong with an electric as opposed to internal combustion engine," he adds. The auto supply and repair industries, he says, will shrink with demand for their products and services.

"Given the size of the auto industry and companies that offer automotive services and products, there will be a dramatic impact from the likely changes in the way we travel," Lucas concludes. "I hope that state highway departments will still maintain a few winding two-lane roads for those of us who actually enjoy driving."



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About the University of Maryland's Robert H. Smith School of Business

The Robert H. Smith School of Business is an internationally recognized leader in management education and research. One of 12 colleges and schools at the University of Maryland, College Park, the Smith School offers undergraduate, full-time and flex MBA, executive MBA, online MBA, business master’s, PhD and executive education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs in learning locations in North America and Asia.

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