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Written by: Natalie Bernier, PMBA class of 2018; Kasey Chen, PMBA class of 2020; Chris Graff, PMBA class of 2018

 

Standardization, the ability for the critical components of Autonomous Vehicles (AV) to communicate over a common protocol, is essential to improving safety, reducing costs and resources, and making this innovative technology a success. Communication among systems is the key component of interoperability that is necessary for a safer, more convenient, and enjoyable future in transportation.

  • Improve Safety - Innovation in the AV space is accelerating at a breakneck pace. While this helps ensure that some level of AV technology will be available to consumers by 2025, the variations in technology being developed could create proprietary silos of components that do not communicate effectively. Without a standardized platform, safety risks and costs will increase in the long term. Open source development of key critical systems is imperative to ensuring the consumer safety. Interoperability allows instantaneous communication among vehicles, alerting one another of roadside hazards and increasing sight distance between them.

  • Reduce Cost - In order to collaboratively aggregate the best technologies, while continually fostering innovation, interoperability must exist.1 Variation in AV may be concerning for consumers. A survey by AAA shows that 81 percent of Americans feel that AV systems should work consistently and seamlessly across all auto manufacturers.2 Through the ecosystem of partnerships and alliances, cost avoidance opportunities can be realized through the exchange of information. The budget for R&D efforts are wasted in developing competing technologies for the same goal.
  • Enable Innovation - Common platforms spur innovation by creating a connected ecosystem which simplifies development efforts. Standardization in many countries is not an option, giving the United States the opportunity to take a lead in global innovation. To do so, it is imperative that the United States initiates these efforts to avoid reverse engineering.

AV stakeholders must commit to sharing resources and expertise if American consumers are to benefit from this innovative technology.

 

This blog is part of a series created under the direction of Bonnie Pierce, Lecturer in Strategic Management and Public Policy, for the GW Business School class “Business and Society: Autonomous Vehicles.”

 

1 Leigh, Bob “Standards-vs-Standardization” March 7, 2017

2 AAA American Drivers Conflicted About Self-Driving Cars” March 7, 2017

Written By: D’Antione Copeland, Lee Fauteux, Bobby Peddireddy and Gina Romero, Global MBA Class of 2018

 

Among the many benefits of Mobility as a Service (MaaS), the most tangible benefit will be a more affordable and robust transportation ecosystem. Currently, commuters in Los Angeles spend an average of $2,600 annually or an average of $10 per day on a round-trip commute to the office. For tomorrow's MaaS, autonomous vehicles (AV), could soon be the lifeblood of tomorrow’s Smart Cities. As urban populations grow and as Smart Cities emerge, city leaders face a growing challenge: offering Mobility as a Service and investing in adequate transportation infrastructure that will serve the needs of the public and provide an economic boost.

The emerging technology of AV and MaaS business models have introduced an array of business ventures beyond traditional ride hailing service providers, such as Lyft and Uber. General Motors and Waymo are now joining the race to provide autonomous vehicles, related technology, and fleets. These new business models hold out the prospect of an improved transportation ecosystem that can reshape the urban landscape of tomorrow’s Smart Cities. More importantly, the rise of the MaaS network will significantly decrease consumer cost and timeliness of point-to-point mobility.

According to an ARK Investment Report, autonomous taxis will cost commuters a mere $.35 per mile, approximately a 90% savings over today’s average.1 The economic savings is predicted to drive national adoption of an autonomous taxi network. Analysts predict that by 2035, autonomous taxis will be the dominant MaaS for door-to-door mobility.

Total Cost Per Mile of Vehicle Service graph

 

Research shows that autonomous taxis will add $2 trillion to the U.S. GDP alone and exceed $10 trillion in gross revenue by 2035, while the costs associated in implementing the necessary infrastructure is estimated to be $2 trillion over the next 10 years, a small, yet smart investment for a big return.2 City planners and leaders need to now proactively invest in smart infrastructure, robust 5G networks, fully autonomous inductive charging stations (Vehicle to Electric Grid) and curbside pickup/drop-off locations for AVs, to make these savings a reality.

 

This blog is part of a series created under the direction of Bonnie Pierce, Lecturer in Strategic Management and Public Policy, for the GW Business School class “Business and Society: Autonomous Vehicles.”

 

1 ARK Investment Management LLC, "Mobility-as-a-Service: Why Self-Driving Cars Could Change Everything", October 2017

2 Uber Fare Estimator, as of January 13th, 2018

Written by: Ana Caceres-Silva, Professional MBA Class of 2018; James Dennany, Professional MBA Class of 2018; Katia Kobayashi Avanzini, Professional MBA Class of 2018

 

For today’s vehicle owners in the United States, buying auto insurance is not just a legal requirement; it is an expensive requirement. Drivers understand their auto insurance obligations. Auto insurance companies understand how to price their risks --after all, they have more than a century of experience with this model, along with historic data for underwriting traditional auto-insurance plans. But how will this change in the coming decades, as vehicles become more autonomous and perhaps become the norm?

As AV technology advances, traffic accidents will decrease. As accidents decrease so goes lower insurance premiums. It is an oft-cited statistic: more than 90%of all car accidents are caused by human error1. As AV becomes widely available and safety features are added, the human error factor will be reduced and the number of car accidents will dramatically decrease2. In fact, experts predict the reduction in accidents to be close to 81%. With fewer accidents, individuals will see a reduction in annual premiums3. It is estimated that premiums will drop 20% by 2035 and potentially more than 40% by 2050. Individual policyholders can expect this reduction to directly benefit them as average premiums decline.

Automous Vehicules Impact on insurance premiums graph

Although this change will come with tangible savings for individuals, many issues regarding question of liability will need to be resolved. Accidents will still happen in the age of AV — caused by human error, hardware or software defects, or external conditions—and the resulting liability questions will gain complexity. We expect individual vehicle owners, product developers, and network providers will buy insurance accordingly. AV technology has the potential to allow insurers to easily identify causes of accidents and assign liability. Ultimately, questions of liability will still be decided by the courts, but we believe the benefits of reduced premiums will greatly outweigh the growing pains of liability considerations.

Despite the added complexity, savings on auto insurance premiums is certainly an attractive benefit of a future with Autonomous Vehicles and will be a part of a more affordable and robust transportation ecosystem available to us through this technology.

 

This blog is part of a series created under the direction of Bonnie Pierce, Lecturer in Strategic Management and Public Policy, for the GW Business School class “Business and Society: Autonomous Vehicles.”

 

1 U.S Department of Transportation. (2017). AUTOMATED DRIVING SYSTEMS 2.0. NHTSA. U.S Department of Transportation.

2 AON Empower results. (2016). Global Insurance Market Opportunities. AON Benfield.

3 Ibid.

Written By: Jubin Arora, GMBA Class of 2019, Crystal Martinson MBA Class of 2018, Michael Steinberg MPP Class of 2018, Aditya Sharma MBA Class of 2018

 

The elderly and disabled communities often face significant mobility challenges when undertaking everyday tasks and running simple errands. Often, it is difficult for these individuals to get to work, visit the doctor, and attend social activities. Thankfully help is on the way. In the very near future autonomous vehicles could provide a way for these individuals to become mobile, independent, and play an even more active role in the workforce and society.
According to the American Automobile Association, by 2030, there will be 70 million Americans older than 65 with driver’s licenses—a sharp increase from the 40 million registered in 2015. The increase in the number of elderly drivers on the road, due to the aging Baby Boomer generation, will present increasing challenges. Many elderly individuals live in suburbs or rural areas with limited or costly transportation options, which further compounds their mobility issues1. Accidents and declining health will likely cause these elderly individuals to lose their licenses and thus their independence2; however, mobility is essential for continued participation in social and community activities, which provide necessary human interactions that boost health and well-being3. Those with vehicle access better utilize health and regular care options4. The availability of autonomous vehicles will be critical to improve safety while driving, transportation options, and quality of life with our aging population.

Autonomous vehicles will also expand mobility options for the more than 47 million Americans5 with disabilities, particularly the 6 million people who have difficulty accessing transportation. Although there are a wide range of disabilities that impact a person’s ability to drive, such as blindness, physical limitations, or deafness, highly or fully automated self-driving cars will allow most anyone to drive safely and independently. Paratransit, the tax payer-provided transportation services for disabled persons, can cost up to four times as much as mass transit options6 — where mass transit is even available. While there are distinct differences between the elderly population and the disabled community, both groups lack freedom and independence when they lack mobility.

When auto manufacturers, technology companies, and policymakers develop and evolve vehicles, software, and regulations, they must all accommodate the needs and concerns of the elderly and disabled communities. Empowering these large groups, by improving their mobility and allowing them to better integrate into the workforce and the community will benefit not just these populations, but society as a whole.

 

This blog is part of a series created under the direction of Bonnie Pierce, Lecturer in Strategic Management and Public Policy, for the GW Business School class “Business and Society: Autonomous Vehicles.”

 

1Rosenbloom S., “Transportation needs of the elderly population.” Clin Geriatr Med. 1993 May; 9(2): 297-310.

2Lawrence, Eric. “When Should Elderly People Stop Driving,” January 20, 2014.

3Dickerson AE, Molnar LJ, Eby DW, Adler G, Bédard M, Berg-Weger M, Classen S, Foley D, Horowitz A, Kerschner H, Page O, Silverstein NM, Staplin L, Trujillo L. “Transportation and aging: a research agenda for advancing safe mobility,” Gerontologist. 2007 Oct; 47(5):578-90.

4Syed, S. T., Gerber, B. S., & Sharp, L. K. (2013). Traveling Towards Disease: Transportation Barriers to Health Care Access. Journal of Community Health, 38(5), 976–993.

5Auto Alliance, “Conference on Autonomous Vehicles and the Disability Community,” October 27, 2017.

6Saripalli Srikanth, “Are Self-Driving Cars the Future of Mobility for Disabled People?” October 11, 2017.