On March 18, 2018, a self-driving Uber killed a pedestrian in Tempe, Arizona. The event was a popular topic of discussion, making people doubt the safety of autonomous transport for mass adoption. The latter was not the first casualty associated with autonomous driving. In May 2016, a Tesla driver was killed while driving his Model S in autonomous mode on a Florida highway. Although the occurrences lead people to doubt the reliability of self-driving vehicles, experts suggest that it is a weak premise based on research by ASIRT that suggests that nearly 1.3 million people die in road crashes each year. This means that conventional transport causes an average of 3,287 deaths a day, which account for 2.2% of all deaths globally and 4% of deaths in the US. According to a press release by Tesla, the tragic accident that occurred in Florida was the first fatality in 130 million miles of Autopilot driving. The company compared that to regular driving, which incurs one fatality per 94 million miles in the US.
Self-driving or autonomous driving means the vehicle uses algorithms and AI to sense its surroundings, map and identify routes and navigate through real traffic without the intervention of a human driver. The evolution of autonomous driving as defined by experts consists of five levels, each level describes the extent to which a car takes over tasks and responsibilities from its driver:
How is global autonomous transportation adoption?
While the risk of casualties associated with autonomous driving are frequently discussed, it is expected that this technology will save up to 600,000 lives by 2045. The dystopian view, however, holds that all those vehicles will put some 5 million drivers out of work.
According to research by Intel and Strategy Analytics, the autonomous transport system is set to boost the global economy by up to USD 7 trillion by 2050. In addition, the robocar sector could add as much as $2 trillion to the US economy alone by 2050. Strategy Analytics expects that the shift towards complete vehicle autonomy will enable mobility-as-a-Service to open doors to an emerging new market that will be referred to as "Passenger Economy." The latter represents the value of products and services derived from the use of fully autonomous, pilotless vehicles - including indirect savings in both time and resources that are generated through using pilotless vehicles. Boston Consulting Group expects that the driverless car market will be worth $42 billion by 2025 and $77 billion by 2035, and IHS suggests driverless car ubiquity will hit around 2050.
In terms of the other economic and social impacts of Passenger Economy, Strategy Analytics expects that:
- Conservatively, 585,000 lives can be saved due to pilotless vehicles in the era of the Passenger Economy from 2035 to 2045. This is nearly as many people that live in the city of Dusseldorf and fill the Melbourne Cricket Grounds nearly six times over.
- Pilotless vehicles will free more than 250 million hours of consumers’ commuting time per year in the most congested cities in the world.
- Reductions in public safety costs related to traffic accidents will amount to more than US$234 billion over the Passenger Economy era from 2035-2045.
Due to the advantages of autonomous driving, the transportation industry has begun to incorporate autonomous driving functionalities in their array of products and services. Manufacturers such as BMW, Mercedes, Volvo, and automobile industry disrupter Tesla have gone in full throttle to effectively roll out a full range of autonomous vehicles. Tesla, Mercedes, and BMW vehicles already display plenty of these features. Google’s self-driving car project Waymo has already logged the equivalent of 300 years of driving experience on city streets since 2009 and promises to free up time, lower stress, make roadways safer and improve transportation.
Autonomous driving disruption is not just limited to passenger cars, automakers have been quick to offer the same in other modes of transportation such as trucks, aviation, and ships. Daimler Trucks recently launched an autonomous truck that can take over its driver’s role. It can also maintain consistent speed and keep a safe distance from other vehicles. Swedish start-up “Einride” is working on a self-driving truck that requires no human intervention. Similarly, Uber is testing a self-driving truck that recently made its first delivery of 50,000 beverages.
Amazon is also working towards autonomous delivery through “Prime Air” – an unmanned aerial vehicle that allows delivery within 30 minutes. Rolls-Royce, on the other hand, is working on autonomous cargo ships that do not require humans on board. The ships would be controlled via a land-based control hub, leading to significant savings.
How is autonomous transportation in the Middle East?
The Middle East has been at the forefront of autonomous transport adoption, with UAE leading the way. The Dubai Future Foundation in conjunction with Dubai Roads and Transport Authority (RTA) launched the ‘Dubai Autonomous Transportation Strategy.’ The latter is set to make 25% of Dubai transportation autonomous by 2030, saving USD 6 billion annually. The strategy also includes “Dubai World Autonomous Transportation Challenge” which would reward companies, academic institutions and research centres that contribute realistic transportation solutions catered to the Dubai market. As part of the strategy, RTA has also announced the signing of an MoU with the Sustainable City project for the operation of autonomous vehicles within the facilities of the project situated in Dubai Land, starting in February 2018.
Dubai Metro is already part of the Autonomous driving strategy as the driverless system transports millions of passengers every year. Dubai’s RTA recently tested a pair of driverless transport pods coupled to each other. Capable of ferrying six passengers per pod, these autonomous vehicles are part of Dubai's efforts to promote futuristic transport tech. Built in Italy by the U.S.-based company Next Future Transportation, the cube-shaped autonomous pods run on electricity, with a top speed of 80km/h (roughly 50 mph). In order to accelerate the development of these pods, RTA is expected to spend USD 410,000 on R&D.
Studies show that the UAE ranks eighth globally for its readiness to accept driverless vehicles. According to the KPMG study, UAE ranks ahead of South Korea and New Zealand on their Vehicles Readiness Index (AVRI). The index looks at global best practices aiming to help countries expedite autonomous transport adoption, as well as their capacity to adapt to autonomous driving and their current progress towards driverless transport. Dubai’s ranking comes as no surprise with initiatives such as a potential drone air taxi, built in collaboration with Volocopter.
Dubai is earmarked as a testing ground for UberAir - an arm of ride hailing company Uber dealing in flying taxis. UberAir is said to have partnered with NASA to develop the necessary air traffic software. UberAir has set itself a deadline of 2020 for initial launch and 2023 for a full-scale operation.
A key development towards Dubai’s driverless transport vision and autonomous transport strategy is Virgin Hyperloop One, which aims to use magnetic levitation technology to transport pods along vacuum-sealed tubes at 700 mph. The emirate has long been linked with the technology, with discussions of one route to Fujairah and another to Abu Dhabi. The latter would cut the 102-mile journey to just 12 minutes. Contained to the UAE, a roll out would improve inter-emirate travel, but if expanded, the effects could be profound. For example, Hyperloop could enable Dubai travellers to skip the world's third busiest airport and reach Riyadh, Saudi Arabia in a mere 62 minutes.
Dubai’s RTA chief Al Tayer mentioned that the city’s economy has seen savings of USD 34 billion (AED 124.7 billion) in the last decade with people spending less time in traffic and more people using public transport. He added that the introduction of Dubai Metro has over the years helped sustain the economy, transporting 9 percent of the population daily.
“Dubai Metro is a lifeline of Dubai and plays a crucial role in moving the city. According to our studies it is 6.4 percent better in punctuality compared to train systems in other cities, while the metro’s operation cost is also 7 per cent lesser than other systems that are operated by drivers,” said Al Tayer.
He added that RTA’s smart systems save four million litres in fuel per year, while reducing 8,000 tonnes of Co2 annually.
How will autonomous driving affect the transportation sector?
The transport system is expected to face challenges globally, including increased congestion and greater road fatalities. This would result in increased economic costs. According to a report by KPMG, 90 percent of road accidents are caused due to human error. As the number of vehicles on the road is expected to increase from 1.2 billion to 2 billion by 2035, accidents may increase.
Autonomous driving is expected to disrupt the transportation sector in several ways:
Overcoming driver shortage:
The global trucking industry has witnessed a truck driver shortage over the years, creating a challenge for transportation companies.
According to reports by IRU (an international organisation for road transportation), it’s estimated that:
- Over the next 10-15 years, there will be a shortfall of 150,000 drivers in Germany
- The US will be required to hire one million drivers in the next 15 years
- Over the next 10 years, transportation and logistics companies in India will need to find 17 million more workers Around 10% of the Indian truck fleet is currently unused because of a driver shortage
- In South Africa, it was estimated in 2015 that an extra 15,000 truck drivers are required each year, but the supply has fallen short of this target
Labour is among the logistics industry’s largest costs. Cutting drivers out of the shipping equation therefore promises significant cost savings. According to the American Transportation Research Institute's 2016 analysis of trucking operational costs, driver wages and benefits run 63 cents per mile and represent 40 percent of the $1.59 average cost per mile of trucking.
Moreover, this labour crunch means there are not enough trucks to meet cargo-transportation demands - a real supply-chain challenge for even the biggest companies. North America relies heavily on freight transportation. The American trucking industry’s revenues totalled $676 billion in 2016. Major players including Waymo, Uber, Tesla, Volvo, and Daimler Trucks are therefore working to bring self-driving trucks to market.
Automation will not create unemployment for truck drivers. The nature of their job will change, and they will be required to manage technology. They will also assist in areas where technology faces challenges. Industry experts also suggest that automated vehicles will still require drivers inside in case of errors.
Efficient supply chain
Autonomous long-haul trucks (ALHTs) are expected to play a role in the future. They will be guided by sensors that will map out the road and have computers in place of typical drivers. The technology is, however, expected to be expensive. The current estimate for a truck of this sort is approximately USD 200,000. Expected savings are around USD 100,000 annually per truck.
The cost savings are due to reduced labour requirements as well as lower fuel costs, as technology optimises acceleration and braking. Additionally, accident-related expenses also decline as the trucks are programmed to maximise safety.
According to Morgan Stanley, the US freight transport industry would save USD 168 billion annually from improved fuel consumption, reduced labour costs, improved productivity, and reduced accidents. Experts predict that autonomous and semi-autonomous driving technology will be adopted far faster in freight markets than passenger markets.
Productivity improvements are also expected as transportation would no longer have to rely on driver working hours. Human drivers require rest, technology does not. This would allow faster and cheaper delivery.
Cynics sometimes fail to understand the true market force for autonomous driving: safety and reliability. Transportation companies lose money every time a shipment is delayed or gets delivered to the wrong address. Their bottom line also suffers any time an accident puts a driver and/or a vehicle out of commission.
Automation has the potential to significantly reduce the element of human error, therefore driving down production costs for the businesses and user costs for the consumer, not to mention saving lives. The safety upside for the general driving public—who, let’s face it, would rather keep their eyes glued to their cell phones instead of the road—promises to be even greater.Related Services: Transport & Logistics Consulting