How Uber’s Autonomous Cars Will Destroy 10 Million Jobs And Reshape The Economy by 2025
Industry experts think that consumers will be slow to purchase autonomous cars – while this may be true, it is a mistake to assume that this will impede the transition. Morgan Stanley’s research shows that cars are driven just 4% of the time,5 which is an astonishing waste considering that the average cost of car ownership is nearly $9,000 per year.6 Next to a house, an automobile is the second most expensive asset that most people will ever buy – it is no surprise that ride sharing services like Uber and car sharing services like Zipcar are quickly gaining popularity as an alternative to car ownership. It is now more economical to use a ride sharing service if you live in a city and drive less than 10,000 miles per year.7 The impact on private car ownership is enormous: a UC-Berkeley study showed that vehicle ownership among car sharing users was cut in half.8 The car purchasers of the future will not be you and me – cars will be purchased and operated by ride sharing and car sharing companies.
A Columbia University study suggested that with a fleet of just 9,000 autonomous cars, Uber could replace every taxi cab in New York City – passengers would wait an average of 36 seconds for a ride that costs about $0.50 per mile.14 Such convenience and low cost will make car ownership inconceivable, and autonomous, on-demand taxis – the ‘transportation cloud’ – will quickly become dominant form of transportation – displacing far more than just car ownership, it will take the majority of users away from public transportation as well. With their $41 billion valuation,15 replacing all 171,000 taxis16 in the United States is well within the realm of feasibility – at a cost of $25,000 per car, the rollout would cost a mere $4.3 billion.
Morgan Stanley estimates that a 90% reduction in crashes would save nearly 30,000 lives and prevent 2.12 million injuries annually.23 Driverless cars do not need to park – vehicles cruising the street looking for parking spots account for an astounding 30% of city traffic,24 not to mention that eliminating curbside parking adds two extra lanes of capacity to many city streets. Traffic will become nonexistent, saving each US commuter 38 hours every year – nearly a full work week.25 As parking lots and garages, car dealerships, and bus stations become obsolete, tens of millions of square feet of available prime real estate will spur explosive metropolitan development.
The transition to such disruptive technology can be painful for some. But federal policy that hinders startups and job creation will only make it worse and longer lasting.