Businesses beware? Autonomous vehicles will ‘change everything’


Beginning April 2, California will allow autonomous vehicles – without safety drivers – to test on all public roadways.

The state’s first driverless bus rolled onto the streets inside a nearly 600-acre business park near San Ramon last month.

“The future of driverless vehicles is here in California,” Dr. Mark Schniepp told the crowd of about 400 business professionals gathered at the SCVEDC’s annual Economic Outlook on March 8.

It’s a technological advance that Schniepp boldly predicted would “change everything” – from the way we travel to the way we build our homes to the way we spend our money.

How we make our money will undoubtedly change, too, Schniepp warned, posing a potentially significant disruption to the United States’ recent economic roll, threatening the infrastructure of many long-established businesses and resulting in the loss of millions in revenue for state and city governments.

“Computers are safer than humans. They don’t get tired. They don’t need caffeine (to stay awake). They don’t get distracted by cell phones. They don’t get distracted. They don’t daydream. They don’t feel anxiety. They don’t get emotional. They just go.” – Dr. Mark Schniepp

And here we thought the scariest element of autonomous vehicles would be the fact that a human wasn’t in the driver’s seat.

“The implications of autonomous vehicles are huge,” said Schniepp, director of the California Economic Forecast. “We’re now very close to the tipping point. Closer than you think.”

In detailing a timeline that he projected would eliminate human drivers by 2035 and eradicate all accidents and personal vehicle ownership by 2050, Schniepp listed insurance professionals, lawyers, doctors and nurses, maintenance technicians and car salesmen as especially vulnerable to the changing economic tide that will be created by AVs.

He also hinted at a dramatic landscape change that would, eventually, wipe away the need for parking lots and structures – “The seas of parking around shopping centers, around airports, around stadiums. Gone. We won’t need it,” he said – and used examples of newer parking facilities in Los Angeles and Cupertino that were built to be converted to office space or housing “when AVs take over.”

With AVs set to operate as part of “a network of (subscription-based) car companies,” and not for personal ownership, Schniepp questioned the long-term health of auto dealerships and city and state governments.

“No dealers in the cities, because the fleet owners will buy their cars direct from the manufacturers. So, eliminate all the car dealers,” he said. “That means all the sales taxes for the cities will be in jeopardy. That’s the biggest tax revenue item for cities. Car licensing and registration, toll roads, toll lanes can be largely eliminated.”

As an example, Schniepp told the crowd that some 41 million people are ticketed for traffic infractions every year, with the average speeding ticket being $250.

“Do the math,” he said. “It’s $10.3 billion that goes to the states and municipalities. Erased!”

He continued, “Court fees and fines. No more DUIs. No more driver education classes. No more sobriety checkpoints. A lot fewer judges. A lot fewer lawyers.”

While some attendees cheered that prospect, John Shaffery, managing partner of Poole & Shaffery, one of the region’s most prominent law firms, could be seen offering a thumbs-down response from his table near the front of the room.

Schniepp’s dark timeline for the future of auto dealerships drew a similar response from Chris Paz, general manager of Mercedes Benz of Valencia.

“Autonomous vehicles do not signal an end to dealerships; they signal the next step in the evolution of the automotive industry,” Paz wrote in an email to the SCVBJ. “Mercedes Benz, in particular, is a pioneer in autonomous technology and due to their existing franchise body they already have an established distribution network in place.”

He added, “Dr. Schniepp’s theory that the roads will exist of nothing but fully autonomous vehicles by 2035 is a mathematic impossibility. It takes 15 years for a manufacturer to completely turn over a fleet. This would mean that by 2020 factories would only be producing autonomous vehicles in order to eliminate all driver-controlled cars from the roads by 2035, and we know this is not a current reality.”

Auto dealers and law firms weren’t Schniepp’s only targets.

“What about hospitals?” he said. “Forty-thousand people are killed and 4.6 million are injured in U.S. auto accidents (every year). That largely can be eliminated. What will hospitals do?”

On the future of insurance, Schniepp said, “With human error eliminated, there will be hardly any accidents. No citations. Insurance premiums should drop like a rock and those savings will be passed on to the subscription (service).”

Of maintenance and preventative services that provide oil changes, tire repair and car washes, Schniepp declared, “Eliminated. Gone.”

While he painted a dark picture for some businesses, Schniepp offered a brighter outlook for commuters.

“Autonomous vehicles don’t make wrong turns. There be a lot fewer accidents. They don’t get fatigued. They don’t rubberneck,” Schniepp said.

He added, “Computers are safer than humans. They don’t get tired. They don’t need caffeine (to stay awake). They don’t get distracted by cell phones. They don’t get distracted. They don’t daydream. They don’t feel anxiety. They don’t get emotional. They just go.”

AVs, however, aren’t infallible. A self-driving Uber struck and killed a pedestrian on March 17 near Phoenix – less than 10 days after Schniepp presented at the SCVEDC’s marquee annual event. Immediately, Uber halted driverless testing efforts, and Toyota did the same a few days later.

The California Department of Motor Vehicles was set to begin issuing three different AV permits – for testing with a safety driver, driverless testing and deployment – on April 2.

“This is a major step forward for autonomous technology in California,” DMV Director Jean Shiomoto said in a February statement. “Safety is our top concern and we are ready to begin working with manufacturers that are prepared to test fully driverless vehicles in California.”

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