With Self-Driving Cars Coming, What Happens To Millions Of Jobs In The ‘Crash’ Economy?

If you’ve been paying attention to the buzz surrounding autonomous and self-driving vehicles  over the past couple years, you’ve likely heard the arguments about whether they might one day take the wheel from us. While enthusiasts wring their hands over losing control, and others worry about security and privacy, advocates tout the potentially huge advantages of a fleet of vehicles which almost never crash.  

A 2012 study by KPMG and the Center for Automotive Research (CAR) predicts that a self-driving fleet could eliminate 93 percent of crashes attributed to human error. The savings in lives, injuries, insurance claims, delays, lost productivity and more would be substantial (so much so that a few prognosticators have imagined a world where non self-driving cars would be banned in the name of public safety.)

But if the technologists, business-government interests, and early adopters pushing for autonomous driving are right, there’s one thing that’s been left out of the conversation: If cars and trucks don’t crash, what happens to the millions of jobs supported by driving today? 

Call it the crash economy — not just because of how it’s grown, but where it may be heading.

“That’s an extremely good question,” David Alexander, a senior transportation research analyst with Navigant Research, acknowledges.

“All the studies popped out over the last couple of years have looked at the huge potential savings of reduced accidents, productivity improvements. But there is another set of consequences waiting for us depending on how [autonomous vehicles] roll out.”

While the first true self-driving vehicles are expected before the end of the decade, most experts agree a fleet won’t be a reality for 20 years. But given that advocates expect AVs to be shared far more than cars today, fewer vehicles and their associated infrastructure will be needed. CAR’s David Wallace said the Center may soon have a study on the potential downsides; though he’s more optimistic, Wallace cites a recent study by Barclays analyst Brian Johnson, which forecast a 40 percent drop in new-vehicle sales over the next 25 years.

The potential decline in new car sales has been discussed but a Texas car restorer by the name of Melvin Benzaquen recently reeled off some of the other consequences of AVs in a blog post. If self-driving cars don’t crash as much, demand for body shops declines. It’s easy to start following that logic through many other lines of work:

Emergency services/equipment
Highway safety equipment
Towing/recovery services/equipment
Traffic enforcement services/equipment
Used vehicles
Compliance professionals/investigators
Court system infrastructure/processing
Lawyers/legal services
Insurers/insurance
Construction  

Auto manufacturing – one of the last bastions of organized labor – would contract (Johnson, at Barclays, estimates GM and Ford would need to cut North American output up to 68 percent). Autonomy also implies less demand for professional drivers. The potential decline in employment suggests diminished income tax revenue as well as sales tax revenue, traffic enforcement and vehicle registration revenues among others.

A fall in auto ecosystem demand also has second-order impacts. We may need fewer commodities like steel, aluminum, precious metals, oil, chemicals. The federal, state and municipal bureaucracies that exist to serve the automobile would also likely get smaller.