Will self-driving cars be as transformative as smartphones?

By Jeff Cockrell

The momentum behind driverless cars has been so strong that it may feel as though a robotic takeover of the roads is imminent. A study by the Brookings Institution pegged investment in autonomous vehicles from August 2014 to June 2017 at $80 billion—and acknowledged that this figure is likely far from comprehensive. A 2016 McKinsey report projected that up to 15 percent of new cars sold in 2030 will be fully autonomous.

There are clear potential benefits to be derived from cars whose operation doesn’t depend on human judgment and attention: greater safety, less traffic congestion, more-efficient fuel usage, a boost in free time, and relief from the stress of driving, among others. But there are still big technological and regulatory hurdles standing in the way of mass adoption of fully autonomous vehicles. And along with news of engineering breakthroughs and big investments, there’s also news of setbacks for self-driving cars, most recently a high-profile accident in Arizona that killed a pedestrian.

Are self-driving cars on the verge of dramatically improving our lives? Perhaps not, according to economists polled by Chicago Booth’s Initiative on Global Markets. A third of the IGM’s US Economic Experts Panel disagreed with the statement that “Over the next decade, autonomous cars will raise average welfare in the US by at least as much as smartphones have over the past decade,” and 40 percent expressed uncertainty. Only 14 percent of the panel agreed.

Daron Acemoglu, MIT
“Great potential, but it is uncertain both when they can be used in large-scale and how much they can reduce costs and increase productivity.”
Response: Uncertain

Oliver Hart, Harvard
“I don’t think they will be as transformative. There are too many potential safety issues, and they will not solve congestion problems.”
Response: Disagree

Larry Samuelson, Yale
“A decade may be optimistic, but autonomous vehicles promise productivity gains, and (alas) perhaps also serious implications for inequality.”
Response: Agree

This article was originally published in Chicago Booth Review, a publication of the University of Chicago Booth School of Business.