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So much has been written about autonomous self-driving cars (automated
vehicles or AV) and all of it is simply fascinating. The technology is evolving
quickly and the research in this field will affect each and every one of us in unforeseen
ways. Looking back just 7-8 years ago, smartphones were being adopted by the
masses. My, how our lives have changed – generally for the better, but with
some definite downsides.
How will our lives look 10 years from now with substantial
numbers of AVs on the street?
For years, auto manufacturers have been selling us cars
based on performance, safety and the personal relationship we have with our
vehicle. This focus will necessarily change, and virtually overnight, when cars
become more like robots and safety is paramount to performance and convenience.
The public will become accustomed to a chauffeur mentality. We will be able to
get from Point A to Point B without thinking about the best route, the time it
will take or road conditions.
I recall a time in the early 80s when Chrysler was selling
basic metal boxes on four wheels (i.e., K cars). They sold like hotcakes
because the market changed overnight when OPEC put oil production quotas into
place and gasoline prices shot up dramatically. Consumers needed vehicles that
had better gas mileage, and they willingly traded in their old behemoth gas
guzzlers for something more practical.
What’s going on with driverless cars is different, but not
entirely. The demand for AVs may be driven by cost savings, convenience and a
complete change in the way the public views transportation in general. In urban
environments, there are numerous alternatives to driving to work. But in small
cities and rural areas, options are limited.
Interestingly, driverless cars may perform best in uncrowded
venues outside of cities. In urban areas, the challenges are more than I can
count. But consider:
Congestion in urban areas and algorithms that
dictate that autonomous vehicles obey traffic laws may result in massive
traffic jams. Consider the impact of pedestrians and bicyclists that share city
crosswalks and roadways. Do you think human beings will simply wait to allow a
driverless car to turn through an intersection? Or will they recognize the car
for what it is and assume it must stop or yield to them before crossing?
What will keep someone from driving aggressively
around autonomous vehicles because they know the software inside the vehicle
will tell the car to yield to a potential obstruction?
In the real world, human beings adjust their behavior when
dealing with new technologies and safety features in their cars. Consider the anti-lock
brakes (ABS) experience of the 80s and 90s. The reduction in crashes for
vehicles equipped with ABS wasn’t nearly as remarkable as predicted. Drivers
felt more comfortable operating their vehicles at higher speeds in more
hazardous conditions because they knew they were equipped with this safety
feature. Following the risk compensation theory, drivers adapted to the safety
benefit by driving more aggressively.
Human nature being what it is, I suspect something very
comparable will happen when the driving population is sharing the road with
Consider another very real element of human nature – putting
things off until the last minute. We see drivers in a hurry at all hours of the
day and night. The algorithms in a self-driving car will likely not respond to
a person’s instruction to “Speed it up!” Running errands around town will take
longer because each segment of the day’s driving will most certainly take
Individuals will need to plan ahead to avoid being late for
appointments, meetings, school, church or the hundreds of other commitments we
make to be somewhere at a given point in time. We all have friends and family
that are chronically late, and this will only get worse if they are traveling
via self-driving car.
There is little doubt that autonomous vehicles will
significantly reduce the number of accidents and injuries associated with car
crashes. What concerns me most are the unintended consequences of these new
technologies and how they will change future human behavior. More time will be
spent in the car, and we will be unencumbered during that time… which means
more time for us all to check our e-mails and social media postings.
Joe Herbers is Pinnacle’s
Managing Principal and a Consulting Actuary with over 30 years’
experience. His practice focuses on providing loss reserving and funding
studies for a wide variety of entities – both traditional insurers and
alternative markets. Joe’s specialties include policyholder-owned group
captives, large-deductible and/or self-insured entities, lawyers’ professional
liability carriers, Florida property writers and non-standard auto writers in
the state of Illinois. Joe is an Associate of the Casualty Actuarial
Society, a Member of the American Academy of Actuaries and a Chartered
Enterprise Risk Analyst. He served as long-time member and Chair of the
American Academy of Actuaries Committee on Property Liability Financial
Reporting (COPLFR) as well as several other professional committees. He
is a regular speaker at industry events.
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