Self Driving Cars and Car Ownership

There are predictions forming that the combination of autonomous cars, self-driving cars, and companies like Uber are beginning to, at an increasing rate, impact car ownership.

The theory is if cars can be shared you won't need to buy one. They say it will be cheaper to use a service for your transportation needs instead of owning your own vehicles. While this may be true on a small scale, I doubt if it will exceed a few percentage points in automobile sales in the near future. Lets consider the market potential, and the barriers.

How much money can be saved by not owning your own car will be a major factor. According to AAA.

"Due to declines in gas prices and finance charges, the annual cost to own and operate a vehicle has fallen to $8,698, a nearly 2 percent drop from last year, according to AAA's 2015 Your Driving Costs study."

That's a lot of money to work with. Save on insurance, repairs, registration, fuel, maintenance, etc. Who wouldn't want that. And you don't even have to wash your car. Those companies who provide the autonomous cars so you don't have to own a car will bear those costs, they'll just spread it over many passengers. But is that the end of the story?

Sharing vehicles is ideal for someone who lives in a big city where parking is expensive and hard to find. Then you find an overnight parking space only to wake up to a car buried in snow. Using a service like Uber, or some other type of car sharing organization, could certainly be faster and cheaper than owning your own car. In fact I believe this is already true of many people. If you live in New York City it is quite possible you don't own a car, you take taxis/Uber or the subway everywhere, and occasionally you rent a car for excursions. It is possible that this segment of the population will grow in terms of not owning a car, but ever so slightly.

Taxis have been available for decades but haven't replaced privately owned cars yet. Uber is cheaper which changes the equation some, if that will persist. Autonomous cars may be even cheaper than today's Uber because there is no driver to pay.

The cities with a far less dense population as New York, say Albany or St Paul, may actually somewhat fulfill the promise of the autonomous vehicle and reduced car ownership. Here people have a choice to buy a car or take Uber or some other future service that offers autonomous pick-up and delivery of humans. They haven't yet become a society of non-car-owners so there is room for change. Some of the impetus to give up owning a car or not depends on driving patterns.

If you live many miles from work the cost of a daily car service may kill the idea of giving up your car. In other words it may be cheaper to own the car than to use a service. Also if you have complex driving patterns such as dropping the kids off at two different schools on the way to work that can easily add to the miles you have to drive. In our house just driving our son to school and picking him up is 11,000 miles a year. I rather doubt that our family could save money by giving up the family car. Plus my wife shops on the way home. How much do you have to pay the Uber driver to wait while you fill his/her trunk with groceries, and empty the trunk at home?

Perhaps you own a boat and need a vehicle to. You may have owned two cars and could give one up, just keeping the tow vehicle. So you keep the most expensive vehicle and give up the small efficient gas sipper. Remember the AAA average cost of ownership is an average. Your costs could be less if you own an efficient car such as a Honda Civic or Prius.

Rural homes are the least likely to give up their vehicles. They may not even have other services available, and if they do the wait for an Uber driver to show up could be long. True autonomous vehicles would be better here because they may be more distributed than Uber cars. Once an autonomous car finishes it's delivery does it return to some starting location, or does it stay in the area waiting for another call close by.

I attempted to use Uber exactly once and it didn't work out. I had a plan to get to the Orlando Airport about 8am one morning. I called Uber from Disney World but I was informed that there would be a multiplier on the promised cost due to a shortage of drivers. I ended up taking a taxi which was cheaper.

Lets say you have an Uber driver take you to work and back home every day. That's like having a private car, and chauffeur, for perhaps 2 to 4 hours a day. Could that really be cheaper than owning your own car?

Then there is the personal side. What if you go golfing after work. Yes you could use a hired car and take your clubs into the office, if that's an option. But the ease of keeping your clubs, or other personal items, in your own car may be worth a lot.

Here is my biggest issue. I love to drive. I'm 69 years old and I've always loved driving. Driving is like a game to me. How to brake, how to merge, how to avoid accidents, what route to take, how to handle traffic, enjoying the open road, cruising over mountain passes with roads that curve and twist. These are things I won't easily give up. Sure I'd like a self-driving car for very long trips so I can kick back and not have to be fixated on the road for hours at a time. But what I'd want is a car with lane assist and automatic breaking that really works; there are already cars of this capability today. I still want a steering wheel, and pedals so I can drive when I want to.

Someday autonomous cars may actually fill the dream of sending the car to pick someone up and bring them home, without mom or dad having to go with the car. But I think that day is far off. Why? Because we aren't perfect. Air bags have been in cars for decades but today millions of them have to be replaced because they are killing passengers. Designers make mistakes. Mechanics and electronics fail. Software has bugs. Imagine some of the scenarios where non-accident related problems can and will arise.

In the year 2016 the state of GPS, digitized maps, and up-to-date information about roads and road conditions are simply not up to the task of directing autonomous cars. Sure they will get to the end point most of the time. But what about those other times. Imagine being in a car with no steering wheel or pedals and the car drives down a dead end, then three other autonomous cars pull up behind you blocking your way out. How do you get out of that mess. And even if you could get out of that mess what if the only passenger is a young child? let's see you could have a service like the Ford Sync so you could get help from a central source. All of these things will be corrected over time, but there will be this gap from when autonomous cars hit the road and all of these issues are minimized.

Are you in construction or some other job that requires a truck? Forget giving up that truck for Uber.

The adaption rate will likely be much slower than some think. The Toyota Prius hybrid came out almost 20 years ago. Since then Toyota has sold millions, including many more models which have had hybrid versions. Yet adaptation rates of hybrid cars is quite small, even after almost 20 years.

In 2014 in California, the peak market for hybrid cars, hybrid sales totaled 452,152 units, down 8.8% from the previous year. The hybrid market share was 2.75% of new car sales, down from 3.19% in 2013, and the lowest since 2011. 

Of course that market share reduction was due to cheaper fuel, but even the 2013 figure of 3.19% is very low in terms of adaptation rate. People simply don't change quickly. Some resist the whole idea of a hybrid car. Just think of the resistance of adapting to a driver-less car. 

So while I don't disagree that sometime in the future a significant percentage of the cars on the road will not be owned by individuals I see that day as at least two decades off. Not because the technology won't be there, but the myriad of individual situations are simply too big a barrier. Personally if I lived long enough I would be quite reluctant to give up my own car.