By Hod Lipson & Melba Kurman
In 2014, Google fired a shot heard all the way to Detroit. Google’s newest driverless car prototype had no steering wheel and no brakes. The message was clear: Cars of the future will be born fully autonomous, with no human driver needed or desired. Even more jarring, rather than retroﬁt a Prius or a Lexus as Google did to build its previous two generations of driverless cars, the company custom-built the body of its youngest driverless car with a team of subcontracted automotive suppliers. Best of all, the car emerged from the womb already an expert driver, with roughly 700,000 miles of experience culled from the brains of previous prototypes. Now that Google’s self-driving cars have had another few more years of practice, the fleet’s collective drive-time equals more than 1.3 million miles, the equivalent of a human logging 15,000 miles a year behind the wheel for 90 years.
In response, car companies are pouring billions of dollars into software development and the epicenter of automotive innovation has moved from Detroit to Silicon Valley. If the car companies had the power to deﬁne the transition to driverless cars, they’d favor a very gradual process. Stage 1 would involve reﬁning driver-assist technologies. Stage 2 would involve implementing a few high-end models with limited autonomous capability in specific situations, most likely on highways. In stage 3, limited autonomous capacity would trickle down to cheaper car models.
Consulting firm Deloitte describes such a gradual approach as one that’s incremental, “in which automakers invest in new technologies—e.g., antilock brakes, electronic stability control, backup cameras, and telematics—across higher-end vehicle lines and then move down market as scale economics take hold.” Such a cautious approach, although appealing to an industry incumbent, may actually be unwise. For car companies, inching closer toward autonomy by gradually adding computer-guided safety technologies to help human drivers steer, brake, and accelerate could prove to be an unsafe strategy in the long run, both in terms of human life and for car industry bottom lines.
One reason car companies favor an incremental approach is that it prolongs their control over the automotive industry. Driverless cars need an intelligent on-board operating system that can perceive the car’s surroundings, make sense of the data that’s flowing in, and then act appropriately. Software capable of artificial intelligence—especially artificial perception—requires skilled personnel and a certain depth of intellectual capital to create. Car companies, while extraordinarily adept at creating complex mechanical systems, lack the staff, culture, and operational experience to effectively delve into the thorny thickets of artificial-intelligence research. Google, on the other hand, is already there.
Driverless cars introduce uncertainty into the automotive industry. For the past century, selling cars directly to consumers has been a good business. However, if driverless cars enable consumers to pay per ride rather than buy their own car, the business of selling generic car bodies to transportation companies that lease out driverless taxis might not be as lucrative. If car companies are someday forced to partner with a software company to build driverless cars, such a partnership could result in car companies taking home a smaller slice of the final profits.
Like a growing kitty in the middle of an all-night poker game, there’s a lot of money sitting on the table. Former University of Michigan professor and GM executive Larry Burns explains that there’s a gold mine tucked into the 3 trillion miles a year that people drive each year (in the United States). He said, “If a first-mover captures a 10 percent share of the 3 trillion miles per year and makes 10 cents per mile, then the annual proﬁt is $30 billion, which is on par with Apple and ExxonMobil in good years.”
Car companies and Google are like gigantic tankers on a collision course, both slowly cruising toward a common destination: to wring the most profits from the next generation of automated cars. Car companies favor an evolutionary approach, to develop driver-assist modules to the point where they can take over the wheel for extended periods of time. In contrast, Google’s strategy aims to dive directly into full autonomy.
Picture: By David Castor (user:dcastor). Images by David Castor or a subcategory thereof.) (Own work) [CC0], via Wikimedia Commons.