Report Claims Self-driving Cars Will Make So Much Money, No One Will Care About Employment Losses

Matt Posky
by Matt Posky

There’s been plenty of discussion about how autonomous vehicles will effectively annihilate the trucking and taxi industries. We’ve certainly discussed it — in addition to concerns that self-driving vehicles may not reduce pollution and traffic congestion as promised.

Fear not, claims a recent report sponsored by Securing America’s Future Energy. The problem of self-driving cars displacing huge numbers workers is apparently overblown when compared to the economic impact as a whole. According to the study — “America’s Workforce and the Self-Driving Future” — the loss in employment opportunities should be offset by the potential advantages in safety, cheaper transportation, mobility, air quality, and individual productivity.

The report says that by 2050, AVs will contribute between $3 and $6 trillion in cumulative consumer and societal benefits to the U.S. economy. While it’s not clear how much of that will go into the pockets of people who’ve lost their jobs, it sure sounds great in theory.

But is this really the future of autonomous transportation? And who are these wizards of analysis who tell us the future looks so damn bright?

Let’s start with the claims made. The lengthy study breaks down the financial benefits of autonomous vehicles in several, largely hypothetical, ways — primarily congestion, safety, value of time, and oil consumption.

Beginning with the congestion claim, we’re already seeing issues. While some have speculated that AVs will help streamline transit and get unnecessary cars off the road, nobody has really explained how that would work with our current infrastructure. In fact, a few studies have come out claiming the inverse. Earlier this year, Paul Priestman, a leading transportation designer currently working on Elon Musk’s Hyperloop, said autonomous vehicles will probably only gum up the works further.

“There’s a lot of talk about autonomous vehicles, but my view is that until they all start communicating seamlessly together, you’re just going to get traffic jams full of autonomous vehicles with nobody in them as they go to pick up other people,” he said in January. “It’s going to exacerbate the situation rather than improve it.”

Alright, so what about safety? Securing America’s Future Energy suggests we would save over $500 billion annually by 2050 thanks to accident reductions resulting from autonomous vehicles. This one is a little harder to unpack. A large portion of the study claims the money will come as a result of “quality of life improvements” — which is as broad as it is confusing. It encompasses everything from people gaining new employment opportunities stemming from the technology to the elderly and disabled having new mobility options.

While we’d presume these changes will be brought on by autonomous technology, the numbers presented are speculative. The tech industry will no doubt continue creating high-paying jobs, but these won’t be as widely accessible as getting a delivery route or owning a taxi. Likewise, automakers haven’t shown how the disabled will make use of AVs, despite claiming they’re in their best interests. In the long term, these problems will undoubtedly be solved. But few manufacturers have shown prototypes offering functions that allow the blind to navigate an autonomous interface and there are already mass transit and taxi services that cater to the sightless and wheelchair-bound populace. Even with autonomous capabilities, vehicles will have to be modified to effectively accommodate the disabled.

We’re not convinced of the quality of life aspects, though autonomous vehicles will surely become safer once automakers figure out how to make them foolproof. Assuming the industry overcomes the hurdles of the testing phase, a perfectly operating fleet of AVs should eventually reduce the number of roadway accidents to a negligible amount. But that’s only when we decide to give up on driving ourselves entirely.

Value of time was another aspect the research said would rake in big bucks by 2050. By making it so individuals don’t have to engage with the act of driving, Securing America’s Future Energy claims people will become more productive. We can’t poke too many holes in this one, as passengers can spend more time working when they aren’t driving (as if we needed longer hours). But there are hidden opportunities here, as well. Presumably, most commuters won’t spend all of their time going over office documents. Instead, they might spend time watching television or getting in some e-commerce before they arrive at the office — both of which will make someone money.

The report also suggests people will be more willing to take on longer commute distances when they didn’t have to drive. SAFE created a model that takes into consideration increased traffic speeds from AV adoption. This, plus a greater willingness to travel, could impact the number of quality jobs within a reasonable commuting time while improving people’s willingness to shop at retail outlet. It used several struggling cities as examples. Again, the data here is pretty “what if,” but the general idea is plausible.

However, what about all of those jobs that will be lost as America shifts away from driving itself? Securing America’s Future Energy says there will be nothing to worry about. The study is convinced that the jobs lost will have nothing on the Great Recession.

From America’s Workforce and the Self-Driving Future:

Using the scenarios SAFE provided for the adoption of AVs, the Groshen employment report modeled the technology’s impact on the workforce. The study concluded that AVs would not lead to the long-term loss of jobs, although some number of workers could experience unemployment and wage losses. As there are far more professionally employed truck drivers than professionally-employed car drivers, impacts would be tied more closely to the adoption of very high automation in trucks (defined as no driver “in the loop” for most of operation). In contrast, partial automation or teleoperation of trucks is not likely to have significant negative impacts on the workforce.

Relative to a baseline of full employment, the advent of AVs are projected to increase the unemployment rate to a small degree in the 2030s and to a somewhat larger degree in the late 2040s, with a peak, temporary addition to [national] unemployment rates of 0.06–0.13 percentage points.

It also mentions e-commerce and automated teller machines in reference to how AVs might impact the labor force. Both eliminated employment upon their implementation, but ATMs eventually allowed for new teller job to open up after cost savings helped banks rationalize opening new branches. Meanwhile, online sales have crippled the retail industry while gradually creating new jobs for delivery persons, product managers, and software developers.

Honestly, the scariest thing here is the claim that we’ll really start reaping the rewards of self-driving cars once traditional vehicles disappear from roadways. Once AVs have 100 percent penetration of the market, they can close the following distances and pick up speed. But it only works at maximum efficiency when we stop driving completely and the machines don’t have to account for driver error (giving serious credence to the driving dystopia envisioned by Bob Lutz).

The entire report really pushes the agenda, even going as far as saying “in the absence of concrete estimates, the public has a tendency to concentrate on the worst possible outcome.” Maybe we’re guilty of that, but we also know when someone’s trying to sell something — and America’s Workforce and the Self-Driving Future reeks of it.

This is clearly an attempt on behalf of big business to push AV adoption onto policymakers, and we’re a little dismayed to see outlets like Automotive News publicize the report without making that caveat.

According to the group’s website, Securing America’s Future Energy aims to “lead the conversation on energy and transportation policy with the goal of bolstering America’s economic and national security.”

By it’s own admission, “SAFE unites prominent military and business leaders to develop and advocate for policies that improve America’s energy security by significantly curtailing our dependence on oil and promoting responsible use of our domestic energy resources. SAFE relies on the knowledge and experience of four-star retired military officers, Fortune 500 CEOs, and its expert staff to produce high-quality, fact based analysis and policy recommendations for lawmakers, regulatory agencies, and the public.”

It didn’t take too much digging to realize SAFE is an economic group seeking to protect the U.S.’s economic interests, rather than some environmental lobby hoping to abolish oil for the sake of the environment or a consumer advocacy group. And that’s fine, the U.S. economy needs someone looking out for it. But it’s somewhat disingenuous to present everything in this report as gospel; most of it is highly speculative and it cites sources interested exclusively in helping big businesses. It’s also difficult to effectively quantify things like “quality of life” in dollars.

Autonomous vehicles will likely be a big part of our future, whether we want it or not. So the best thing we can do is keep tabs on how the discussion progresses between businesses and the government, and do our best to make sure the technology isn’t implemented at our own expense. We love driving and all the freedoms and risk associated with it. Perhaps we should push our own a agenda every once in a while.

[Images: Securing America’s Future Energy]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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2 of 16 comments
  • TomLU86 TomLU86 on Jun 14, 2018

    Namesake and Sub-600 have it right. The economic benefits will accrue to the elite. The masses will give up their freedom of mobility. As far as longer commutes, I don't see it. I bet AVs will eventually be dialed back to 55mph, in the name of 'safety'. Also, if AVs did take over, we would have gridlock. The only way to 'unjam' it will be to raise the price, which will benefit AV operators (I don't see ordinary people spending the equivalent of $400-500k, or even $100k if the prices come down to buy an AV.

  • Mike Beranek Mike Beranek on Jun 14, 2018

    It's not about cars, there isn't much money in driving people around, and there never has been. That's why cab drivers are always broke. It's all about the trucks, baby. So what happens when you eliminate about 3.5 million truck-driving jobs? Well, most of those truck drivers are from rural parts of America. In fact, truck driver salaries account for almost all personal income in rural areas- the farms and mines are all corporate-owned, and there's nothing else left that isn't in the hands of some oligarch. There simply is no other way to earn a living if you reside far from the urban centers. So how will these jobs be replaced? These folks don't have college degrees and many will be unwilling or unable to learn "new" tech skills that might make them employable in other sectors. But they would almost certainly have to move to an urban center to find that work. Mark my words, the day trucking goes fully autonomous is the day rural America dies. The people living there will be forced to move to where the work is. Of course, this a great thing for the oligarchs, since there will be no one around to complain about fracking.

  • Mike Some Evs are hitting their 3 year lease residual values in 6 months.
  • Tassos Jong-iL I am just here for the beer! (did I say it right?)
  • El scotto Tim, to be tactful I think a great many of us would like a transcript of TTAC's podcast. 90 minutes is just too long for most of us to listen. -evil El Scotto kicking in- The blog at best provides amusement, 90 minutes is just too much. Way too much.
  • TooManyCars VoGhost; I was referring more to the Canadian context, but the same graft is occurring in the US of A and Europe. Political affiliation appears to be irrelevant.
  • The Oracle Going to see a lot of corporations migrating out of Delaware as the state of incorporation. Musk sets trends, he doesn’t follow them.