Illustration of driverless cars making the union jack
A million drivers out of work. Public transport collapsing. Migration down as delivery jobs dry up. A property market upended as desirable spots near railway stations lose value and remote spots boom.
The potential upheaval from the arrival of driverless cars knows few limits.
Self-driving vehicles are a science fiction staple, but their arrival in the real world finally appears imminent. Google’s Waymo – famous for its driverless cabs in San Francisco – and rival Wayve are both trialling models in London this year.
Ultimately, they want to launch autonomous vehicles (AVs) for hire: robotaxis. The technology could prove to be truly seismic.
“It could be 20 years from now that driving will be like horseback-riding – people who are fans of a certain type of transport that used to be the predominant type of transport will do it for fun,” Dara Khosrowshahi, the chief executive of Uber, told the World Economic Forum in Davos this month.
Uber drivers have been protesting against the possibility that they will have to compete with robots. There is a certain irony in this: a decade ago, it was black cab drivers who were on the streets protesting the arrival of Uber.
The ride-hailing app’s impact on the black cab market is indicative of what may be to come. The number of licenced taxis in England and Wales peaked at 58,800 in 2017, falling by more than one fifth to 45,800 today as competition ate away at their market.
At the same time, the total number of private hire and taxi drivers surged from below 300,000 a decade ago to 381,000 licenced in England today.
Disruption from driverless cars promises to be far greater, sweeping through not only the market for cabs but also logistics and public transport.
Around one million people in Britain make their living driving, representing around 3pc of the employed workforce.
Around 280,000 drive heavy goods vehicles (HGVs), according to the Office for National Statistics, while almost 275,000 work as delivery drivers and couriers. A further 100,000 drive buses and coaches.
Khosrowshahi expects a large share of those jobs to be lost. “Obviously, there will be job displacement,” he said.
If nobody were to drive any more, the future would look bleak for the nation’s 29,000 driving instructors too.
While job destruction sounds damaging, self-driving cars may create economic benefits elsewhere. Most commuters – 67pc – travel by car. Their journeys take an average of almost half an hour.
If those commutes took place in robotaxis, the best part of an hour a day could be spent doing something other than clutching a steering wheel and keeping one’s eyes on the road.
Office staff may choose to use that time to clear through emails or to open their laptop and crack on with the day’s work, benefiting productivity.
But Kallum Pickering, chief economist at Peel Hunt, suspects the bigger boost will come for streaming services, phone apps and advertisers.
“Where do these angels live that are going to work on their commute?” he says. “People will sit in their cars and buy stuff online. They are going to text their friends, and they are going to watch video content. They will be doing the same stuff they do on the trains.”
Driverless cars also open up the possibility that workers may be willing to take a longer commute to a better job, or move house to an area previously seen as inconvenient.
“It would shift property demand potentially away from rail stations to be more evenly spread across the commuter belts – though an even greater issue than now would be congestion,” says Andrew Wishart, economist at Berenberg Bank, noting the impact of trainloads of workers taking the cars instead.
Such speculation is more than just academic. A similar thing happened during the pandemic. Freed from the need to commute, families sought bigger homes further from their places of work.
The “race for space” pushed up prices in the countryside and trashed the value of city centre flats.
At the same time, Britain’s public transport networks were devastated as people stayed home.
There were more than 1.7 billion rail journeys in the UK in 2019-20, but that dropped by more than three quarters to fewer than 390 million during the pandemic. Public transport needed multibillion-pound bailouts and passenger numbers have still not quite recovered to pre-Covid levels. Driverless cars offer new competition.
If cars replace buses and trains, it could mean busier roads. Yet interestingly, these driverless vehicles would not need to park up near the office when they drop off their charges.
That means space currently used for car parks in town centres, or outside offices and homes, could also be freed up for productive use as robotaxis drive off elsewhere.
“They could reduce the need for parking in prime locations,” says Larissa Marioni at the National Institute of Economic and Social Research.
“It could free up land for housing, parks, commercial use, which all sounds great. But if these AVs are incentivised to remain in circulation rather than park, congestion could increase.”
Perhaps the biggest impact will be on the business of moving goods around the country by lorry. No human means no rest breaks, toilet trips or stops to sleep, saving time and money.
The Society of Motor Manufacturers and Traders estimates the market for automated and connected HGVs could hit £3.5bn per year by 2040.
Self-driving lorries would not behave like the vehicles we see on the road today. Jamie Hamilton at Deloitte predicts they would instead move in huge convoys, like a stream of motorised ants taking over motorways.
“‘Platooning’ is where you get one van or lorry right behind the other. That gives you massive aerodynamic efficiencies,” he says.
The fuel savings could be enormous.
“You can save up to 20pc on fuel. It is a material cost. You have got much smoother acceleration and braking, which can save up to, say, 5pc. A lot of the costs of logistics and freight are also labour costs.”
Elsewhere, the army of drivers working for Amazon and other online shops could plausibly be replaced by robots too, reversing an extraordinary burst of job creation in retail.
Small delivery robots, as trialled in locations including Milton Keynes, might replace the fleets of takeaway delivery bikes. That has knock-on effects for a relatively new industry accused of relying heavily on new migrants of uncertain legal status.
Removing an easy and quick route into work – a goal of successive governments – could even undermine one reason for migrants to come to Britain, unless alternative jobs pop up fast.
If it works, Britons can prepare to save a lot of money and time thanks to the self-driving revolution. That might be little comfort to the one million drivers seeking a new career.
Yet Steve McNamara, general secretary of the Licensed Taxi Drivers Association, is sceptical. He notes that Waymo is incurring significant losses on its AV programme in America despite typically charging customers more than traditional cabs.
“The economics of it just don’t add up; there is absolutely no money to be made out of it whatsoever. It is another dotcom bubble,” he says.
Cars will still need refuelling or recharging. Flat tyres will need to be changed. Dirty vehicles will need to be cleaned, inside and out. Those jobs, currently done by drivers, cannot be replaced with a smart navigation system and an app.
McNamara argues robotaxis are little more than “a novelty, a tourist attraction” in Los Angeles, and would struggle with London’s small, clogged roads.
Yet technology has a remorseless logic of its own and the allure of the driverless car may prove difficult to resist.
As Uber’s Khosrowshahi pointed out at Davos: “It doesn’t get tired, it doesn’t get distracted, it doesn’t text, it can work all day and all night with no problem whatsoever, and is constantly getting better.”
