THE BLOG

Driverless cars will reshape the economy, but these three hurdles will make it a slow process

06/22/2015 05:34 pm ET | Updated Jun 19, 2016

In the past decade, the idea of cars driving themselves has quickly gone from sci-fi dream to impending reality. Tesla Motors is planning to include limited driver-assist functions in a software update this summer, the same time Google plans to unleash its prototype pod-like vehicle on public roads (with a steering wheel and backup driver onboard for emergencies). As I wrote last week, once matured, this will revolutionize the transportation industry and replace millions of jobs, from taxi drivers to truckers. Of course, these professions' looming obsolescence has many people worried, with some warning of a massive spike in unemployment or even a permanent underclass of dislocated drivers unable to find new work. But while they're legitimate to consider, these fears are overstated. Due to some major technological, legal, and business hurdles, the driverless revolution will not happen overnight. Instead, it will be more of a glacier than a tidal wave: a nearly unstoppable force, but one that replaces jobs gradually and gives drivers ample warning so they can find new work.

In fact, the driverless revolution has already begun, but has started so incrementally as to go nearly unnoticed. In the mining industry, gargantuan trucks are used to haul ore out of the mines to be refined and processed nearby. Multinational mining company Rio Tinto, as part of its "Mine of the Future" initiative, has completely automated its trucks at a site in Australia, and Canadian oil company Suncor Energy announced this month that it is following suit. It is only possible to implement fully automated vehicles in this sector due to a perfect storm of conditions: these trucks drive very slowly on a fixed route, in a remote environment that does not include any public roads. Hazardous working conditions and the ensuing high salaries for drivers, averaging $200,000 a year, also gives mining outfits a much greater incentive to innovate than taxi companies or others that pay much lower wages and involve less danger.

Complete automation has only been adopted in a very limited set of applications because, despite all the media attention it's received, driverless technology is still in its infancy. Google's vehicles, arguably the most advanced out there, are actually safer than human drivers on city streets -- but only in ideal conditions, as these same vehicles flounder in bad weather or when faced with potholes or other obstacles. Tesla and Daimler are testing out systems that can handle themselves on an open stretch of highway, yet both still need a human driver behind the wheel in case anything unexpected happens. Requiring a human operator in case of emergencies will probably be standard procedure for quite some time, making things much easier for drivers without replacing them. If autonomous vehicles remain technologically confined to clear weather days for many years, it may be the case that taxi drivers in places like San Francisco will be made obsolete while their peers in rainy Seattle or snowy Boston hold onto the status quo much longer. People who always work in bad conditions, such as plow drivers who must clear streets of snow while avoiding parked cars and other obstacles, have the most job security and probably won't be replaced in the foreseeable future.

Of course, there will almost surely come a time when autonomous vehicles are comparable or better than human drivers in all conditions, and could reliably transport even a drunk or blind passenger who wouldn't be able to take over in an emergency. But even when all technological barriers are overcome, perhaps even more daunting political obstacles will remain. Regulations on driverless cars are handled primarily at the state level, with states like California and Nevada leading the way on allowing the testing of such vehicles as a first step towards their commercial use. If laws continue to differ substantially from state to state, local services such as taxis or package deliveries will be automated much earlier than interstate ones like trucking or long-distance busing. If an eighteen-wheeler can only drive itself through half of the states on its route and needs a human to control it the rest of the time, it wouldn't make sense to automate it at all since the driver would need to be on board for the entire duration anyway. If the FAA's laughable pace in regulating commercial drones is any guide, national standards allowing for driverless cars will likely lag far behind technological progress.

At both the state and national level, it's almost certain that unions will fight against driverless vehicles tooth and nail. After all, their core purpose is to protect their members' jobs, which would clearly be threatened by automation. As is typical of special interest groups resisting change, unions will try to delay adoption by demanding endless studies on various concerns. They and other opponents will also devote resources to highlighting any negative stories about self-driving vehicles while stoking fears over their safety and the economic effects of their legalization. This could slow things down significantly, but as people get more comfortable with the technology in other states and countries, it will only be a matter of time until proponents of progress win out.

Yet even when all technological and legal barriers are overcome, there still remain many business reasons that people currently employed as drivers will keep their jobs. Some drivers, like truckers or package delivery people, deal almost exclusively with transporting goods and will be the first to be made obsolete. But many others have aspects of their jobs that can only be done by humans, like school bus drivers who chaperone children and must be available to respond to emergencies. They will likely stay employed, with automation allowing them to devote more of their attention to these other duties. And even if a human is not necessarily required, they may still be preferred by some customers, like those who enjoy talking with taxi drivers while they travel to their destination.

Even when driverless vehicles are technologically advanced and completely legal, there may be a surprising number of people still working as professional drivers. They'll share the roads with driverless commercial vehicles, privately owned autonomous cars, and people who still drive out of a distrust of technology or the simple enjoyment of it. This early on, it's impossible to tell exactly how this will play out, but it's unlikely we'll see a fully autonomous transportation system -- whether it's purely voluntary or the result of a ban on human drivers -- for many decades to come.