system will be made up entirely of autonomous vehicles in the foreseeable future. The question is when will the transformation occur. And that question cannot be addressed without understanding the pervasive role of government in the adoption process.
In any case, recent testing has moved beyond operating the vehicle in good weather and in a low-risk environment to identifying and overcoming atypical but challenging conditions that could arise in practice, such as driving in blinding snow and combating terrorists’ efforts to cause a vehicle to crash into other vehicles or to run over pedestrians. In addition, automobile and technology companies are developing the capacity to promptly fix any technical problems in their autonomous-vehicle fleets, and they are increasingly aware of the liability issues that surround autonomous vehicles.
The Role of Government
Government policymakers do not simply need to stay out of the way to facilitate autonomous vehicle transportation. They must take a number of important steps, which include establishing a framework for vehicle testing and conditions for adoption, making appropriate investments in highway-network technology to facilitate communication between autonomous vehicles and between such vehicles and highway infrastructure and operators, and reforming pricing and investment policies to enable the safe and efficient operation of autonomous vehicles.
Accordingly, policymakers pose a greater risk than industry participants regarding when, if ever, U.S. society realizes the huge potential benefits of autonomous vehicles. They could delay implementing guidelines for testing of autonomous vehicles and ensuring their timely adoption. They could put off the costly investments in technology that facilitate communications between vehicles and from vehicle to infrastructure and network, some of which public authorities will have to install and manage effectively to facilitate mass use of autonomous vehicles on the U.S. road system. And they could fail to remedy inefficiencies in highway-infrastructure pricing, investment, and production policy, which have compromised nonautonomous-vehicle travel for decades and must be reformed to enable autonomous vehicles to operate efficiently and to raise revenue from highway users to help finance the investments in new infrastructure technology.11
A Brief Roadmap
The main purpose of this book is to present an overview of the potential benefits of autonomous vehicles, providing empirical estimates wherever possible, and to assess the current technological challenges and public-policy concerns. Its goal is to encourage industry participants and policymakers to make constructive use of the time between the current period, when autonomous vehicles are being tested in selected locales, and the transition period, when the public starts to adopt autonomous vehicles for their actual travel, to significantly address the potential problems. Although the book focuses primarily on the United States, the substantive and policy issues raised here are relevant for all countries that seek to adopt autonomous vehicles expeditiously and successfully.
This book draws three primary conclusions.
The potential benefits from autonomous vehicles are extensive and enormous. In particular, the benefits to the economy from reducing congestion could raise annual economic growth by at least 1 percentage point. In addition, the gains from virtually eliminating fatalities, injuries, and collision damage would be very large. Finally, the alleged costs of autonomous vehicles in terms of land use, employment, other modes of transportation, and public finance are likely to be overstated. In fact, they could be turned into positive effects through plausible adjustments by the public (for example, in housing and labor markets) and through the implementation of efficient public policies by transportation officials.
The major obstacles to realizing most of the potential benefits are primarily policy related, rather than technological. The federal government has already delayed vehicle testing and adoption, and it seems unable to understand that current inefficiencies in highway policy pose a serious threat to the success of autonomous vehicles. Some local and state governments have shown an interest in upgrading their infrastructure technology so that their roads could be used efficiently by autonomous vehicles, but they have not turned their attention to reforming inefficient highway policies.
In the long run, despite the failure of policymakers to implement efficient highway infrastructure policies in the past, competitive forces at the city, state, and even country level may spur policymakers to reform their highway policies to enhance autonomous vehicle operations. Given that policymakers have time to adjust their policies, cautious optimism that trillion-dollar bills will not be left on the sidewalk in the coming decades is warranted.
As this book went to press, a global pandemic had broken out, caused by a coronavirus (COVID-19) that was first detected in Wuhan, China. The outbreak quickly manifested an unforeseen benefit of autonomous vehicles by spurring China to expedite production and adoption of autonomous delivery services provided by small vans. Autonomous delivery services enabled medical providers and consumers to reduce their human exposure and address labor shortages caused by quarantines. As the coronavirus spread to the United States and other countries, public health professionals stressed the importance of “social distancing”—maintaining physical distance from others—to curb the virus’s spread and to “flatten the curve,” meaning that people would become infected more gradually, thus preventing surges in the need for medical services that would overwhelm hospitals. In the short run, autonomous vehicle companies are likely to focus more of their efforts on autonomous deliveries. In a post-coronavirus world, autonomous vehicles carrying passengers and cargo will gain significant attention as a vital way to flatten the curve associated with future viruses and to reduce the disruption of economic and other activities. Accordingly, the book’s focus on governments taking actions to expedite the adoption and efficient use of autonomous vehicles has even greater urgency and importance.
Part 1 of this book discusses autonomous vehicle operations and the process of vehicle adoption. The various potential effects of autonomous vehicles on travel conditions and the economic environment are addressed in part 2. Given autonomous vehicles’ potential to reduce congestion, and the difficulty of establishing a causal relationship between congestion and various economic performance measures, we devote considerable attention to developing and executing an approach to provide a rough estimate of the effect that autonomous vehicles could have on economic growth by reducing congestion. Congestion is an important example of a negative effect of traditional or nonautonomous vehicles that autonomous vehicles could reduce. We also discuss the other negative effects of automobiles that autonomous vehicles could reduce, including threats to travelers’ health and safety, and examine how autonomous vehicles could affect accessibility, land use, the overall U.S. transportation system, employment, and public finance. Fi nally, in part 3 we assess the technological and public-policy issues that could impede the success of autonomous vehicles and draw preliminary conclusions about whether competition among cities, states, and countries to enable consumers to realize the benefits of autonomous vehicles could influence policymakers to address those issues adequately.
2
Autonomous-Vehicle Operations and the Process of Adoption
The Society of Automotive Engineers has created a widely accepted scale of vehicle autonomy, which ranges from level 0 (no autonomy) to level 5 (cars that do not need a steering wheel or pedals because they can perform the entire trip without human input). Motorists have already grown accustomed to some level of independence from their cars. Many vehicles, for instance, have collision-avoidance systems or self-parking features that place them at a level 1 on the scale.
To take just one example, the 2018 Mercedes-Benz S-Class advertises its vehicles as having a suite of safety and driver-assistive technologies, including a detection system that autonomously brakes if a pedestrian or bicyclist gets in front of the
