Self-Driving Vehicles and the Failure to Understand Capitalism


Despite accelerating progress towards fully autonomous cars and trucks, many people still do not accept the obvious fact it’s going to happen soon.

by Mish

For example, in response to Death Spiral for Car Ownership? End of Fuel-Powered Cars by 2024? one reader suggested it will not happen because of capitalism.

Failure to Understand Capitalism

People who believe in this utopia do not understand capitalism. We own cars because consumers chose what they wanted and backed that up with their hard earned cash.
It is already far cheaper to ride the bus or carpool. Few choose that because sharing has its downsides. Fleets of driverless cars are really just a more modular bus service. Some will use this, but most will prefer ownership.

As Backwards

The above line of thinking is ass backwards.

Capitalism is precisely why driverless is coming. Corporations are betting their money and resources. The government is not resisting. The trucking industry will save hundreds of millions of dollars. People who believe driverless is not coming are the ones who do not understand capitalism!

Fully autonomous vehicles are not some pie in the sky prediction by Al Gore. Real companies (hundreds of them) all working on driverless. A bet against them is a foolish bet against capitalism.

Comparing current carpooling with what’s going to happen is like comparing ancient stone huts to modern houses. Carpooling requires a number of people to get together, on the same route, for rides at the same time every day.

On-demand scheduling, point-to-point, is needed, and in the works. I rather doubt that fuel-based cars disappear by 2024, but widespread (not total) disappearance of privately owned vehicles by 2030 seems reasonable.

Lyft and Waymo Reach Deal to Collaborate on Self-Driving Cars

The New York Times reports Lyft and Waymo Reach Deal to Collaborate on Self-Driving Cars.

As the race to bring self-driving vehicles to the public intensifies, two of Silicon Valley’s most prominent players are teaming up.
The deal was confirmed by Lyft and Waymo.

Capitalism at its Finest

Competition is intense. Corporations are investing hundreds of billions of dollars of their own money on technology. Deals, mergers, alliances, and lawsuits (Google vs Uber) are all in play, on a massive scale.

This is capitalism at its finest.

Some point to how few autonomous cars are on the roads. It all starts somewhere. In 1900, in New York City, there was not a car on the road. By 1920, there was not a horse in sight.

Others say they will never accept the technology. Perhaps they will when their insurance costs go through the roof. Regardless, the technology is perfect for people who live in major urban areas. Busses are not flexible enough, and taxis are neither fast enough or cheap enough.

Waymo, Lyft, Uber (if it survives), and other players will easily solve the on-demand nature. The result will be widespread acceptance.

Long-haul trucks will be first of course. Those drivers will vanish soon. A death spiral for car ownership will follow. The only thing in question is the timeline.

Disruption will be massive. Insurance companies and service stations are in for radical changes. For discussion, please consider Second-Order Consequences of Self-Driving Vehicles.

Mike “Mish” Shedlock


Global Economics