New insights from McKinsey & Company demonstrate one common theme: the more autonomous vehicles take over the world, the more money saved and the more revenue earned by almost everyone. McKinsey interviewed over 30 industry experts around the world and came up with Ten Ways Autonomous Driving Could Redefine the Automotive World. Interestingly, they are all cash positive.
How will we all make money? Here is just a partial list according to McKinsey:
- Labor cost savings. These are already being seen in mining and farming applications today. In those areas, autonomous vehicles can work in closed, private environments without the general safety concerns of the open road. As McKinsey notes, look for construction and warehousing sectors to adopt next.
- Uber has disrupted the taxi business. Investors just might salivate at the chance to back a similar company – with no concerns about drivers at all.
- Auto insurance may be totally different. If everyone owns an autonomous vehicle, traditional coverage for liability for accidents will no longer need to be a primary concern. Manufacturers of autonomous vehicles though will need significantly more coverage. Who bears this cost, and who gets the cost savings on insurance will be an interesting question.
- Supply chain logistics will surely be more efficient with autonomous vehicles. This will also lead to flexibility, which surely will lead to cost savings.
- Productivity. What is your commute time? Do you drive? For all people that drive to/from work, autonomous vehicles will free up substantial time during the day. During this time, more work can be done. Of course, for those who do not work, digital media revenues could explode as people seek ever more entertainment on their phones. How much time? McKinsey put the global number of saved commuting time at over one billion (billion!) hours. One billion hours of work, or, watching cat videos.
- Decreased accidents = decreased costs. McKinsey cites that roadway crashes cost the US economy $212 billion in 2012. Cutting that even in half is a huge savings.
Autonomous vehicles are coming. Their impact is still speculative. But there is no doubt that when they do finally arrive, one generation will suddenly find itself thinking that the idea of driving your own car is impossible to fathom.