Autonomous cars are coming, and we generally think that’s pretty great. It’ll reserve the driving for the enthusiasts, much the same way cars reserved horses for enthusiasts. But Zack Kanter over at Quartz thinks driverless vehicles will kill millions of jobs, all within ten years. And he’s wrong.
Take a second and read the article now. Here’s the link. I’ll wait.
Ok, ready? I should probably start out by saying I have a few pre-existing biases. The first is that I normally love Quartz and what they do, and the second is that I don’t have an enormous amount of respect for people who generally try to predict what will happen a decade from now, if not further out. Mostly because if they’re wrong, no one will remember, so no one will call them out on it, and if they’re right (which they rarely are), the one doing the predicting will be the one doing the trumpeting. And even if they are wrong, most people tend to remember the prediction nostalgically as if it was a big joke, like the flying cars of Back to the Future Part II, or the guy who dismissed the Internet as a bunch of hooey in Newsweek.
But I will boldly dismiss the prediction that autonomous cars will completely change our world in just 10 short years as a bunch of hooey.
Kanter’s mostly unsupported claims that autonomous cars will destroy the livelihoods of millions and change the economy as we know it is predicated on two bases. One, that autonomous cars will be widely put into production, and two, that they will see widespread adoption by fleets. And while that all sounds well and good, when you read the rest of the piece on Quartz, it all sort of falls apart. Yes, autonomous cars are being tested right now, and yes, most estimates place the first models on sale around 2020, but there are significant hurdles to widespread adoption, such as the fact that the prototypes currently running around aren’t very good at avoiding potholes, or driving in rain and snow, or making ethical decisions.
Ten years is a ways away, however, so let’s just assume that all those pesky problems will be eliminated by 2025, as that sort of thing is definitely plausible. But Kanter’s main premise, buried way down in the 12th paragraph of the post, is where things start to fly off the rails:
The US Bureau of Labor Statistics lists that 915,000 people are employed in motor vehicles and parts manufacturing. Truck, bus, delivery, and taxi drivers account for nearly 6 million professional driving jobs. Virtually all of these jobs will be eliminated within 10-15 years, and this list is by no means exhaustive.
Nearly six million driving jobs, and 915,000 manufacturing jobs, will be lost in the next 10 to 15 years, right off the bat. That’s a strong claim, to use some understatement. But the supposed evidence that’s presented to support the assertion is more just a series of assumptions and suppositions, a virtual gutted Jenga tower of logic just waiting for one brick to be taken out.
And that one brick is a basic understanding of the automotive industry.
Let’s be generous towards Kanter and Quartz, and assume for a second that yes, everyone will be riding in autonomous cars in 2025, no one will want to even glance upon the ghastly sight of a steering wheel ever again. Even then, however, the 915,000 manufacturing jobs claim is a bold one. At the very least, it seems to be based on the thought that autonomous cars will come from nowhere. The sky, maybe, I don’t know. We’ll all just be humming along one day, in our archaic days we dare to call “modern times,” and driverless vehicles will just appear.
It’ll be a great day, I’m sure.
But in all seriousness, someone, somewhere must be around to manufacture all these cars. They won’t just appear from the sky. Someone will have to make them, in a factory.
I understand where Kanter’s coming from then, at least if his other main assumption, which is that with driverless vehicles we’ll all switch over to Uber and ride-sharing services like Zipcar, actually made any sense. Because if it did make sense, then we’d all be buying fewer cars, because we’d all be sharing from an existing pool. Fewer cars on the roads means fewer jobs making said cars, and thus many of them could be eliminated.
Unfortunately, that doesn’t mean zero cars on the road. So at best the 915,000 eliminated jobs figure is grossly overinflated. But with my own super-future-predicting hat on, I’m going to go ahead and make a bold claim of my own.
We won’t be all using nothing but Zipcar and Uber in 2025.
Especially not Uber.
Uber, let’s be honest, is not much more than a glorified taxi service with some shipping and delivery ambitions. Sure, you can hail a cab using an application on your phone, which is much better than standing on a corner desperately waving your arm in the air while all the cars are full or all the drivers ignore you. But as a mass transit system fit to replace personal vehicles altogether it’s deeply flawed, thanks to its surge pricing. Sit back and imagine what it would cost you to commute in an Uber, every day, during the peak demand times of rush hour, and then gather all of your money into a big pile. Lay down on top of it, pour some gasoline upon the both of you, and then light that sucker up.
(The sucker in this scenario is you and your money.)
But Kanter thinks that adoption will actually be a lot more widespread than we think, in large part because of the rate at which we drive cars now:
Morgan Stanley’s research shows that cars are driven just 4% of the year, which is an astonishing waste considering that the average cost of car ownership is nearly $9,000 per year. Next to a house, an automobile is the second-most expensive asset that most people will ever buy—it is no surprise that ride sharing services like Uber and car sharing services like Zipcar are quickly gaining popularity as an alternative to car ownership.
Morgan Stanley’s research is all well and good, but calling our 4 percent average usage of cars an “astonishing waste” is really just forgetting what we actually use cars for. The majority of people use cars to get somewhere, because they need to be in those places. If we judged our astonishing waste by how much time we spend in a year using an item, then we’d all get rid of our toothbrush. Sure, we might only end up spending .002 percent of our time each year brushing our teeth, but that doesn’t mean it’s an unnecessary waste.
But even then, even if we could just get rid of our cars and Uber and Zipcar everywhere, we’re still missing a fundamental problem that’s inherent to living in the United States. Most people who drive cars simply to get to their occupations every day do so not because they’re completely enthralled with the concept of sitting in creeping, bumper-to-bumper traffic every day and night, or really just like to hear the radio stations fade away as they drive hundreds of miles to the exurbs where they live just to get home, but because they have to.
There’s no alternative.
As we’ve already established, something like hailing an autonomous Uber could end up being prohibitively expensive. Another alternative, such as a model like Zipcar for autonomous vehicles, wouldn’t make much sense either, because Zipcars are usually subject to availability. At peak times, that availability would naturally go down, leaving you stranded at either your home or your job.
It’s not that you’re only driving a car 4 percent of the time because you really like the way your particular Toyota Corolla sits in your job’s parking lot. It’s because that 4 percent of the time you need to be driving your car, you really, really need it. If you don’t live in a big city, thus allowing this sort of thing to work, you’re screwed.
But then the Quartz piece goes onto say that it won’t just be the initial manufacturing jobs lost, but others, too:
Ancillary industries such as the $198 billion automobile insurance market, $98 billion automotive finance market, $100 billion parking industry, and the $300 billion automotive aftermarket will collapse as demand for their services evaporates. We will see the obsolescence of rental car companies, public transportation systems, and, good riddance, parking, and speeding tickets.
I’m not really sure how the automotive insurance market will collapse, as driverless cars still crash; the finance market won’t collapse as we’ve just established personal vehicles will still be a necessity; the parking industry will still exist because hell, all these cars still need to be parked, they don’t just cease to exist once someone steps out of them; and just because a car is autonomous doesn’t mean it won’t need basic things like brake pads, so the aftermarket should still be around as well.
As for whether or not the six million jobs Quartz also speaks of being eliminated, I could see it happening. Definitely not by 2025, but I could see it happening further out. There’s no specific reason why you can’t have a driverless city bus, or a driverless truck, or the basic concept of a driverless taxi, that wouldn’t eliminate all of those jobs.
But overnight, which is what 2025 virtually is?
There are massive upfront costs associated with replacing entire fleets, upfront costs that large business like trucking companies and large bus buyers like cities don’t exactly like massive upfront costs.
But my biggest problem with this article isn’t the technology involved, the demographics necessary, the economics underlying it, the numbers of the jobs lost, or the timescale in which it would happen. It’s this paragraph right here that sticks out like the Skyline chili on a delicious dinner spread:
Disruptive innovation does not take kindly to entrenched competitors—like Blockbuster, Barnes and Noble, and Polaroid, it is unlikely that major automakers like General Motors, Ford, and Toyota will survive the leap. They are geared to produce millions of cars in dozens of different varieties to cater to individual taste and have far too much overhead to sustain such a dramatic decrease in sales. I think that most will be bankrupt by 2030, while startup automakers like Tesla will thrive on a smaller number of fleet sales to operators like Uber by offering standardized models with fewer options.
That’s complete bullcrap. Blockbuster, Barnes and Noble, and Polaroid didn’t go out of business because they just happened to be the old guys that were there, or because someone newer came along. They went out of business because they refused to innovate, they refused to adapt, and they refused to acknowledge new ideas.
Kanter’s assertion that GM, Ford, and Toyota will face bankruptcy in the wake of autonomous vehicles ignores some basic, fundamental facts.
GM, Ford, and Toyota, like Tesla, have all been developing their own driverless vehicle systems for years now. Same goes for Mercedes, BMW, and Volkswagen, through its Audi subdivision. Virtually every major manufacturer has its own autonomous car program, if for no other reason that yes, they too looked at Blockbuster, Barnes and Noble, and Polaroid, saw how they died, saw the writing on the wall for the future of vehicle technology, and said, “no, we don’t want to be like them.”
The only way Kanter’s argument would make sense would be if all of those companies collectively saw this technology, put their fingers in their ears, and said “LA LA LA LA LA LA LA NEVER GONNA HAPPEN NOPE NOT WAY,” much like Kodak did when it invented the digital camera in 1975.
But they haven’t.
And we haven’t even gotten to the still-silly notion that Ford would go bankrupt before Tesla, despite the fact that Tesla still doesn’t anticipate turning an annual profit for years, and will only do so if the sunniest projections all come to fruition. And who knows what an Apple Car would do to Tesla. And we’re all operating on the big assumption that the regulatory environment will be conducive to driverless vehicles, but expecting that all to change very quickly in the current political climate is awfully ambitious.
At the end of the day, however, Kanter’s missing the biggest point of all. A lot of the reason why people own cars is because we like driving cars. And if the only car we can get into, by the hour, by the day, by the app, is one that won’t let me touch the pedals no matter what, then we don’t want one.
UPDATE: This post originally spelled Kanter’s name as Zach, not Zack. It has been amended.
Photo credit: AP