Jobs vs. The Driverless Car

MARCON Mobility Newsletter

Montreal, QC (May 7, 2014) – Large-scale upheaval has been a regular societal phenomenon since the beginning of the industrial revolution, and in the ongoing technological arms race, change occurs with increasing frequency. On the one hand, people in businesses are always looking for greater efficiency, which drives innovation, which in turn typically decreases labour and associated costs. On the other hand, people decry change because of the loss of the very jobs involved. At the end of the day, our standard of living is generally as high as it has ever been; most would agree that the changes have been worth it.

The dilemma between automation and loss of jobs looks set to continue as a hot topic. One area of particular and significant interest with respect to employment and human resources is the burgeoning autonomous vehicle category.

In 2008, I took a ride in an autonomous tractor on a visit to a farm. It was not truly driverless, as the operator was still in the cab, but the point was the ‘driver’ could now pay full attention to the other machinery instead of focusing on driving. The autonomous tractor could drive more precisely, bringing a number of cost savings – hence the return on investment – and the rest of the machinery was better minded, probably generating improvements there too. Driverless is not a brand-new concept, then, but has been in production for some time.

Other uses are moving from development to production, an example being Rio Tinto, which is operating some huge trucks without drivers in each of three open pit mines. Autonomous vehicles are here; the evolution continues.

Two areas are attracting extensive media attention today, and each relates to a significant element of the “productivity vs. jobs” discussion:

  • The emergence of ride-sharing in its many different forms is a threat to the taxi industry and its investments;
  • The self-driving or autonomous vehicle is happening, possibly faster than many anticipated; its ramifications for everything, from car manufacturing to public transit, are coming fast. For example, in the Swedish City of Gothenberg, the first vehicles are on the street in a pilot project of a hundred cars organized by several participants, including Volvo.

Jobs, cars, people and innovation – all of these will have some impact on insurance, whether that impact in each case is smaller or larger. Even the Oracle of Omaha, Warren Buffett, whose company owns GEICO, calls self-driving cars a real threat to the auto insurance industry, GEICO’s mainstay product.

Read the newsletter (PDF).

About MARCON

MARCON Management Consultants Inc. is a specialized market research, strategy and management consulting firm based in Montreal. For more information, visit www.marcon.qc.ca.

Source: MARCON