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The Future of Driving and Its Impact on the Labour Market

Over the last year or so, there have been numerous news items regarding the introduction of driverless cars. The consensus view appears to be that the technology for driverless cars will be in place and ready by 2017 or 2018 and that regulatory approval will take a few more years; meaning these cars will be commercially available and on the road by 2020 or soon thereafter. Already many features of self-driving cars are finding their way into the marketplace: automatic parallel parking, automatic breaking systems, blind spot detector sensors, and lane-departure warning systems.
 
There has been much speculation about what a driverless future might look like and how it might affect the labour market. The most obvious impact has to do with the person who, until now, has been sitting behind the wheel. Consider some of the employment numbers from the 2011 National Household Survey. Among Peel and Halton residents, the following were employed as drivers:
  • 18,315 transport truck drivers
  • 4,735 delivery and courier service drivers
  • 4,100 taxi and limousine drivers
These numbers represented 3% of the entire employed workforce living in Peel and Halton. More strikingly, among employed males aged 25 to 44 years of age living in Brampton, 9.9% were working as truck drivers in 2011.
 
But the articles emerging about the driverless future point out a number of possible impacts, some of them quite speculative. For example:
  • Will automated driving result in fewer accidents, meaning less need for emergency services (police, firefighters and ambulance attendants)?
  • Will automated driving reduce reliance on short-haul flights between cities as people seek to avoid the hassle of security checks and long, pre-boarding waits at airports?
  • Indeed, why even own a car when all one needs to do is dial up an automated car for each trip? How will that affect the demand for cars themselves, for parking lots, even for drive-through fast-food windows and roadside motels?
Recently, the consulting firm Deloitte issued a report examining the potential consequences of a driverless future.[i] The value of this study rests in the analytical framework in which it was developed; to help assess the likely direction of this evolving disruption. This edition of the Peel Halton Insights Report will present some of this study’s thinking, as a guide for how to anticipate what the near future might hold.
 
Framing the thinking about the future of driving

The Deloitte report identifies four trends that will have an impact on the near future of personal transportation:
  • Evolving technologies are resulting in cars that have higher energy efficiency and lower emissions and with more light-weight vehicles that maintain passenger safety.
  • Communications technology will allow vehicle-to-vehicle and vehicle-to-infrastructure communications, meaning each car will know what every other car on the road is doing, as well as what is happening on the road ahead, which can inform driving choices such as speed, direction and route selection.
  • A growing preference on the part of younger people to choose pay-per-use mobility as opposed to purchasing a car (this is likely as much an economic choice as a lifestyle choice); as a side issue, the percentage of U.S. teenagers expressing an interest in getting a driver’s license has dropped from 85% to 73% between and 1996 and 2010.[ii]
  • The inevitability of automated driving systems and how quickly and widespread will be its adoption. 
The report claims there are two competing views of how the future of driving will unfold:
  1. The incremental view, whereby innovations will be attached onto the existing ways of doing things and with advancement occurring in an orderly and more or less linear fashion (the report actually calls this the “insider” view because it is the opinion among many of the existing players in personal transportation, for example, auto manufacturers).
  2. The disruptive view, which holds that these four trends will soon result in a tipping point which will overturn current practices and bring in a new approach to personal mobility (this is a view held by new entrants to the field, such as Google, Uber and Apple).
In trying to assess these competing views, the report proposes four alternative futures, each of which responds to choices made in relation to two factors:
  • The issue of driver control (will cars be controlled by a human driver, will technology work in tandem with a human driver, or will technology completely take over the driving function).
  • The issue of car ownership (will cars continue to be owned as a personal asset or will they increasingly be accessed on a pay-per-use basis, that is, shared among many users).
Diagram 1 illustrates the four future outcomes, derived from different combinations of driver control (from driver to autonomous) and of car ownership (from personal to shared). These outcomes are as follows:
  • Incremental change: This assumes a future rather similar to the past with occasional improvements. Individuals will wish to maintain both personal ownership as well as personal control over their vehicles which will benefit from step-by-step technological advancements in warning systems and driver-supervised automatic control (advanced versions of cruise control).
  • A world of car-sharing: Greater reliance will come to be placed on both ridesharing and car-sharing as a way to get from one place to another, resulting in lower personal car ownership and greater accessibility to ride services from non-drivers (the rise of ZipCars and Uber are simply the early wave of this scenario).
  • The driverless revolution: The third outcome sees private car ownership continue, but cars driving themselves, the easy-to-imagine vision that emerges every time one sees a report on a driverless car test. Like many other technologies, the need for human intervention diminishes to the point of zero, but this scenario eventually would change the design of cars as well; if there is no need for the driver’s seat, the interior configuration of the car can change as well.
  • A new age of accessible autonomy: The most radical change would take place where the cars are driverless and are rarely privately owned. Fleets of autonomous and shared vehicles would be summoned as needed and immediately dispatched again once the drive was completed. Traffic would be coordinated via data collection from each vehicle and sensors on the road, producing the optimal routing and speed, eliminating not only accidents, but also traffic jams, and the need to find a parking space.
 
The report proposes that change will happen unevenly across the world and across different population groups, so that these four scenarios may well exist simultaneously, although in a different mix. It is probably also safe to say that there has to be an eventual tipping point out of #1 (incremental change) to either #2 (a world of car-sharing), #3 (the driverless revolution) and/or #4 (a new age of accessible autonomy).
 
One interesting calculation which the report undertakes is to estimate the per-mile cost of each scenario (these figures are in U.S. dollars). Each scenario poses a different mix of the following costs: the driver’s time; cost of the hired driver; ridesharing profit; fuel; insurance; vehicle maintenance; vehicle financing; vehicle depreciation. The estimate total cost per mile is listed in Table 1.
 
Table 1: Estimated cost per mile for each future scenario (U.S. dollars)
Scenario Cost
#1 Incremental change $0.97
#2 A world of car-sharing $0.63
#3 The driverless revolution $0.46
#4 A new age of accessible autonomy $0.31
 
Change will depend on many factors, including how policymakers will respond to the prospect of vehicles without drivers and to the impact of changing technology on employment; consider the kind of reaction that Uber is already causing. But this cost estimate suggests that price may have a considerable role to play in addition to regulatory policy and social attitudes.
 
The future of driving and the impact on jobs
The four scenarios which the Deloitte study paints suggest far more potential disruption than simply replacing drivers with robots:
  • A movement to more car-sharing and possibly more autonomous driving means a changed auto manufacturing industry; a need for fewer cars but the emergence of a need for different kinds of cars.
  • Such a change would have effects for a whole range of industries. Fewer cars mean fewer auto mechanics and gas stations (gas stations themselves are likely to be reduced with greater reliance on electric cars where some of the re-charging would occur at home – if one still owns a car!). Fewer cars would result in less traffic, fewer accidents, lower insurance and financing costs, even reduced government revenues from license fees and fuel taxes.
  • Such a disruption would favour emerging start-ups, companies that might package personal mobility services, likely relying on technological platforms; as is already the case, various IT and programming skills and web-based marketing and service delivery skills will be in demand.
  • It may be that the retail sector would benefit because of the increased mobility of individuals, including those who previously were more restricted (for example, seniors); on the other hand, the entire transformation of the delivery system will affect how we shop (never mind driverless vans, there are also robotic deliveries and drones being contemplated).
  • It is hard to conceive of a future without truck drivers, yet it appears we need to start contemplating that possibility; in which case, one really has to wonder whether the largest single skills training program approved by the Second Career program for the province will continue to be Transport Truck Driver, as it has been by a considerable margin for several years.
  • The Deloitte report suggests that with more leisure time spent in vehicles, there will be that much more demand for web-based content as well as faster and more reliable connectivity, meaning more jobs among content providers and in telecommunications.

[i] Deloitte, The future of mobility: How transportation technology and social trends are creating a new business ecosystem, 2015 <http://www2.deloitte.com/content/dam/Deloitte/ru/Documents/manufacturing/dup-future-of-mobility.pdf>.
[ii] Matt Kwong, CBC in Detroit: Driverless cars may save lives, but will they kill driving? January 17, 2016, CBC Website (accessed February 3, 2016) <http://www.cbc.ca/news/technology/naias-detroit-auto-show-driverless-autonomous-vehicles-1.3406532>.
WHY IT MATTERS
What this information means for job seekers and career choices
  • The old saying, “It is hard to make predictions, especially about the future” truly applies in the case of driving. But it does help to think through the underlying trends (the emergence of more autonomous vehicles and of more car-sharing) and how those trends might play out in the future, either separately or together.
  • Drivers will still be required over the next few years, but for how long after that is an open question. There will certainly be jobs in the personal transportation field; marketing and facilitating access to the services, not unlike the customer service functions associated with Internet, TV cable or cell phone services. But it is likely that over time, the driving function will become more and more autonomous, probably with a transition phase where humans will supervise the auto-drive function.
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