{I first talked about this back in 2016 so I thought it would be interesting to revisit this almost 6 years later to see how much has actually come true.}
First, full disclosure, Hot Tub Time Machine Part 2 is in my top 5 funniest movies of all time.
Having said that, I’m referring to it because I read a very interesting article about how our lives will change with self-driving cars (the movie has a very funny self-driving car in it). And I’m not talking about decades from now. It’s starting now. If you want to read the original article, written by Venky Ganesan, managing director of Menlo Ventures, a venture capitalist firm, click here: http://www.cnbc.com/2016/08/29/heres-what-the-future-looks-like-in-a-world-of-self-driving-cars-commentary.html
The writer cites a bunch of areas that will be affected immensely by this paradigm shift in how we will be using cars in the near future. Here’s a quick look at 3 sectors of our society that will be affected greatly:
Health and safety: Every year in the U.S., over 37,000 people die and 2.35 million more are disabled in auto accidents. Besides the body count, these accidents cost $230 billion annually. Self-driving cars will substantially reduce these numbers because they are much, much safer than human drivers. This will hurt health care companies and auto insurance companies no doubt, but lives saved, and injuries avoided would be incredible.
Auto industry: Did you know that the average car is used only 5 percent of the time (95 percent of the time it’s parked). Self-driving cars will change why people buy cars. When self-driving cars become commonplace, will people need their second vehicle? Or will they need a vehicle at all? This would turn the auto industry on its head. Actually, many car manufacturers are already preparing for this monster shift. Not so far off, huh?
Real estate: This is great insight by the writer. As mentioned before, since cars are parked 95 percent of the time, we spend a substantial amount of our real estate acreage on parking. Whether it’s garages at homes (estimated to be 15 percent of your total square footage) or parking lots at offices and cities, there is significant economics tied to the notion that you need space for parking. In a world of self-driving cars, office parks need not set aside a meaningful portion of their real estate for parking. City zoning laws will be changed to not require parking slots and houses can reclaim their garage space and reuse it for living space.
Other areas, such as the auto loan industry, auto insurance, gas stations, etc. will see huge changes as well and it’s going to happen fast. In fact, the writer believes that over 5% of all vehicles in our major cities will be self-driving by 2020!
Now, go pull up HTTM2 to watch how it’s going to work and have some great laughs at the same time.
{Well, we aren’t quite there yet as far as self-driving vehicles swarming the roads go, but I think by the end of this decade we could see a significant percentage of driverless cars in major cities taxiing us around to our favorite places.}
Joe Baker, CFP®
Baker Asset Management, LLC
joebaker@bakerassetmanagement.com
