11/9/17

I first had a similar thought when I considered taking a local toll highway that would significantly reduce my commute time to work. I could spend less time in traffic, be more productive, and therefore further my career - but it came at a cost (literally).

Now with driverless cars visible on the horizon, according to this article , this same idea applies even more. Those wealthy enough to afford the feature can spend even more time being productive. This should cause the wealth gap to grow at a quicker rate.

Now looking from an employer's perspective - is this something that will become included as a form of "compensation" with the not so secret hope that employees will spend this extra time not driving working instead?

What do you guys see as the economic impact of driverless vehicles when it comes to workplace productivity? Will there be a big push from overachieving employees? Or will employers try to capitalize on the opportunity? Perhaps a mix of both? Will the standard workday be extended from 9-5 to 8-6 instead since there is no need to be busy "commuting" anymore?

Comments (21)

11/7/17

Early adopters will have a few advantages (more productive time, safer driving environment, time savings, overall efficiencies, ..) but also challenges (adoption of new technology into society, how do human-driven cars and events create inefficiencies, overall issues with traffic, liability principles for insurances, ..). Even a fully autonomous car would still be driving around humans and other vehicles operated by humans.

When it comes to workplace productivity I see efficiencies when the employee would use the new, free time for actual work (telco, reading, emails). This requires a car that is either fully autonomous ("Level 5") or an environment that creates this set of advantages (i.e. something like an autonomous driving lane). However, even a simple solution like commuting via train would also entail many of these advantages.

From a workplace point of view, I forecast that 5-10 years from now even more employees will telecommute unless there is an actual reason to be somewhere physically. Automation and machine learning are bigger driving forces for efficiencies than people commuting (since the overall issues of traffic surely won't disappear quickly anyway). With sophisticated mobile VR systems rushing into the market, there are fewer and fewer reasons to constrict employees in specific buildings.

Quick feature guide to levels of autonomy in a vehicular environment:
https://www.caranddriver.com/features/path-to-auto...

Financial Modeling
11/7/17

First of all, affording a fully autonomous car will be trivial after a certain point. Even very cheap cars these days come with a ton of active safety hardware, such as radar, sonar, multiple cameras, other things. Even entry-level cars in the US can be had with a whole suite of active safety features such as lane-change assist, or lane-change collision avoidance, collision avoidance in multiple directions, pedestrian detection, auto-braking, cruise control that can vary the speed of the car fully from stop-and-go to freeway speeds, and all the rest. Autonomous cars are not necessarily expensive to build...they're expensive to develop. The hardware is not very expensive. It's using the hardware to produce the intended result that's the hard part. It's mostly a software/firmware issue. There is some improvement that's needed in hardware, but we're getting close and that's still not the expensive part. Given that the costs are mostly back-end and not variable production costs, it's going to be in the best interest of manufacturers to spread these R&D expenses over as many vehicles as possible, which I'm sure they will do. So, the period of time where the only autonomous vehicles are six-figure full-size luxury cars will be very short.

The iteration in this area is happening very quickly, Mercedes-Benz was able to introduce the new E-Class with a ton of new driving assists only a couple years after the S-Class was released with what was at the time an unprecedented level of driving assistance. And once again with the S-Class facelift this year, they've upped it again. And with specialized hardware that will be coming from Nvidia, AMD and Intel, along with direct cooperation from these manufacturers as well in terms of developing the programing and algorithms needed to make this all work, we're going to have even faster progress than we've had for the last few years. So, again, there's not going to be some massive epoch of peons driving "poor people" manual cars. Maybe for a decade, at the most. Hardly a thing to think about in the grand scheme of human kind, not even a rounding error.

But, also - why does it matter if that was indeed the case? Why is the answer to wealth inequality (which cannot and will not ever be eradicated, for good reason) always to hold back those who are hard-working, gifted or both in their success instead of trying to increase the success percentage of those who are less gifted, less lucky, less hard-working? Should we artificially kneecap our society just because it "feels good" to make sure that Jeff Bezos is only worth 90 billion instead of 100 billion? Is that really a reasonable viewpoint to take? I don't think so. You want to narrow the margins? Then create a society that allows for great upward mobility.

Put another way, this to me is like arguing that due to rampant disease in certain developing nations, the reasonable thing to do is to introduce these diseases into the West to ensure that the "health gap" stays "fair" among the population. Does this seem like a reasonable thing to do? I doubt anyone would say so. So why do we treat poverty like the thing that we must spread equally? I'd rather figure out how to make as many people as successful as possible. Luckily, for a long time now, we've known what the answer is for that.

"When you stop striving for perfection, you might as well be dead."

11/7/17

To your point, I drive a nearly fully loaded 2014 Audi A5, with price around $48,000 at time of purchase. Now, a $25,000 2017 VW Passat is more loaded with technology and safety features than my antiquated Audi.

11/7/17

Right. It's happening very quickly now. I drive an '08 M5, and it has none of that stuff...doesn't even have the optional auto-high beams. To be fair, the standard 5 series of that generation was available with radar cruise and auto-braking, but the M5 didn't get that. in fact the outgoing M5 didn't have it either, on purpose...I suppose BMW thinks M drivers don't want that, and they might be right but I would love that feature once in a while. It cost me about the same as a decently-optioned Civic, which has far more of those types of features, but I'd rather have the power and the handling of my car. However, the average person won't make that choice, cars are powerful and good enough that the average person doesn't really care about any of that anymore. And to be honest, every single day I am more and more eager for the average person to give up control of their car to a neural network inside the dashboard...the average American is a terrible, terrible driver.

"When you stop striving for perfection, you might as well be dead."

11/8/17

Fuck yeah my first car was an 09 M5 and it was an absolute beast. They just don't build cars like that anymore with screaming naturally aspirated V10s and a tight hydraulic steering rack. Such a shame, looked at the recent M5s and they're just not half as fun as the E60 generation of M5s

11/10/17

It's lots of fun, minus the incredible appetite it has for money in terms of repair costs, fluids, etc. It's left me stranded on the road twice now in a year of ownership, but I'm still not getting rid of it. There's definitely not going to be another sedan like this ever again. The F10 is definitely a lot heavier, more insulated. A better car in every way, but less fun.

"When you stop striving for perfection, you might as well be dead."

11/10/17

Don't ever sell it! When it's time to get something new, keep it in a warehouse somewhere for posterity's sake. Mine was actually super reliable and would still have it but unfortunately it got totaled when I got T-boned by a drunk driver and the replacement parts would've been more than the car was worth. The hardest part was the lack of recent tech though- like mine didn't have BT audio streaming, etc. Ended up getting some sound guys to jig up something custom but still was a pain haha.

Financial Modeling
11/7/17

Elon Musk thinks an electric autonomous vehicle fleet could be run for a cost of 20 cents per mile. When I ran the numbers, I got to about 15 cents per mile when using an electric autonomous vehicle in a fleet. Over the next decade, as the fleets become ubiquitous, it will be exceedingly affordable to catch a ride--think 40-50 cents per mile. In fact, rides might even be free if they are paid for by advertising (e.g. a restaurant picks up your $1.50 ride if you go to the restaurant for dinner).

Edit: for the record, about 3.2 trillion miles are driven in the U.S. each year. In 20-30 years when virtually all miles are autonomously driven, there is potential annual PROFIT in the AV industry of more than $1 trillion in 2017 dollars. This will be such a profitable industry that the owners will make the Saudi royal family look like paupers.

11/7/17

Good points, cost-per-mile due to humans is still a major factor of transportation cost for trucks and even transporting other humans. I'm guessing Uber's only hope for long-term solvency is to stop paying human drivers.

"When you stop striving for perfection, you might as well be dead."

Best Response
11/7/17

The vast, vast majority of people don't understand what all of this means. Autonomous vehicles will literally be the most disruptive technology of the last 100 years. The iPhone was disruptive, but it will pale in comparison to AVs. If people understood what you and I understand this to mean there would be mass elation and anticipation--instead, only a tiny subsector of us nerds follow this stuff.

Upon full adoption, you're talking about (and I'm preaching to the choir here):

  • Eliminating, in the United States alone, 30,000+ vehicular deaths and--perhaps more importantly for the country--4+ million serious vehicular injuries each year
  • Eliminating $100-200 billion of annual car accident costs
  • All but eliminating traffic jams, at least on the highways (largely as a result of eliminating the "phantom traffic jam")
  • Saving countless amounts of oil/energy through efficiently driven automated cars
  • Freeing up the space of most of the 800 MILLION parking spaces in the United States
  • Eliminating the stress of suburban/urban driving
  • Bringing a luxury to the masses (chauferred driving) that was, for 100 years, the element of the rich (or super-rich)
  • Completely and utterly disrupting urban planning and real estate development
  • Freeing up ~200+ square feet in each house in America that has a garage
  • Eliminating most car ownership and the costs
  • Making interstate travel a breeze (think about hopping into an autonomous RV at 10 pm, going to sleep, and waking up at your destination at 8 am)
  • Totally disrupting public transportation (perhaps ultimately destroying the concept of mass transit as we know it)
  • Nearly doubling the road capacity of current roads
  • Eliminating the concept of a "designated driver"
  • Seeing the opening of race tracks all over the country where future generations can enjoy a hobby of driving fun cars in a fun manner on closed tracks
  • The electric component, combined with no honking drivers, could clear up noise pollution and actual air pollution in cities throughout the land.

And the list goes on and on and on and on.

The potential disruption to our society (mostly in a good way) is so breathtaking that I can't believe there isn't a frontpage story on the WSJ or NYT every day about this stuff.

11/8/17
Dances with Dachshunds:

The vast, vast majority of people don't understand what all of this means. Autonomous vehicles will literally be the most disruptive technology of the last 100 years. The iPhone was disruptive, but it will pale in comparison to AVs. If people understood what you and I understand this to mean there would be mass elation and anticipation--instead, only a tiny subsector of us nerds follow this stuff.

Upon full adoption, you're talking about (and I'm preaching to the choir here):

  • Eliminating, in the United States alone, 30,000+ vehicular deaths and--perhaps more importantly for the country--4+ million serious vehicular injuries each year
  • Eliminating $100-200 billion of annual car accident costs
  • All but eliminating traffic jams, at least on the highways (largely as a result of eliminating the "phantom traffic jam")
  • Saving countless amounts of oil/energy through efficiently driven automated cars
  • Freeing up the space of most of the 800 MILLION parking spaces in the United States
  • Eliminating the stress of suburban/urban driving
  • Bringing a luxury to the masses (chauferred driving) that was, for 100 years, the element of the rich (or super-rich)
  • Completely and utterly disrupting urban planning and real estate development
  • Freeing up ~200+ square feet in each house in America that has a garage
  • Eliminating most car ownership and the costs
  • Making interstate travel a breeze (think about hopping into an autonomous RV at 10 pm, going to sleep, and waking up at your destination at 8 am)
  • Totally disrupting public transportation (perhaps ultimately destroying the concept of mass transit as we know it)
  • Nearly doubling the road capacity of current roads
  • Eliminating the concept of a "designated driver"
  • Seeing the opening of race tracks all over the country where future generations can enjoy a hobby of driving fun cars in a fun manner on closed tracks
  • The electric component, combined with no honking drivers, could clear up noise pollution and actual air pollution in cities throughout the land.

And the list goes on and on and on and on.

The potential disruption to our society (mostly in a good way) is so breathtaking that I can't believe there isn't a frontpage story on the WSJ or NYT every day about this stuff.

Out of curiosity, and since you're a RE professional, how do you think this will affect residential RE prices? Specifically, how do you think the prices of residential RE that is in close proximity to cities will change, compared to those that are in farther suburbs? Since the commute will no longer be a significant hindrance to productivity, wouldn't we see people abandoning the smaller, expensive residential RE that is characteristic of cities and their surrounding suburbs, in favour of suburbs that are farther out and offer residential RE that is tremendously more spacious and less expensive?

11/8/17
lwmg:

Out of curiosity, and since you're a RE professional, how do you think this will affect residential RE prices? Specifically, how do you think the prices of residential RE that is in close proximity to cities will change, compared to those that are in farther suburbs? Since the commute will no longer be a significant hindrance to productivity, wouldn't we see people abandoning the smaller, expensive residential RE that is characteristic of cities and their surrounding suburbs, in favour of suburbs that are farther out and offer residential RE that is tremendously more spacious and less expensive?

That's certainly a plausible prediction and one that has much weight for someone like me who would strongly consider moving further out to a bigger place if my commute were lovely and relaxed. On the other hand, city life will likely be markedly better compared to today--quieter (electric vehicles are nearly silent, no honking by drivers), less air pollution, no more issues with the "last mile" problem, and no issues with parking (which is just a plague on all of us urban dwellers). Transportation is just such a drag in most big cities today, so perhaps having an affordable private car service (which Uber and Lyft are not--not affordable for routine, daily use, that is) will make city living ah-mazing.

So for me it's really, really hard to predict how real estate will be impacted by AVs.

11/9/17

All true, but you neglect one of the largest impacts. I don't recall where I read it, but "driver" is the #1 occupation in all 50 states. There is going to be a serious employment shift coming up that will be MUCH larger than offshoring or automating manufacturing jobs.

11/9/17

That is a large impact, but autonomous vehicles will replace drivers over years or decades. I would be more concerned if on, say, January 1, 2020 all driving was illegal. That really would put a lot of people out of work. Hopefully (and I'm no oracle), the long-term implementation of AVs will smooth out the transition.

11/10/17

Most obvious impact on commercial real estate will be the reduction of the need for parking.

11/9/17

As a car enthusiast, I am excited for AV technology but also selfishly sad.

As with the disappearance of the manual transmission for paddle shifters and dual clutch transmissions, the era of feeling & driving experience is slowly (and ever increasingly) being shrouded by computer technology.

I was raised by enthusiasts, and driving was not a A to B form of transportation but was an enjoyable activity / hobby. Something about running a manual transmission through a winding road and pushing the mechanics of a car to it's theoretical limit, will always put a smile on my face. The audacity of owning a completely ridiculous and over-engineered vehicle built for the sole purpose of move a human body about in a more fastidious manner, seriously inspires me to work hard. I love cars, and fast cars are damn expensive haha. With AV goes my passion... without it, I'll have to find other cheap thrills.

I suppose we will still have recreational race tracks. Regardless, I will enjoy the work commute while I still control it!

"A man can convince anyone he's somebody else, but never himself."

11/9/17

I've already got plans in the works to open a race track for hobbyists; the tracks will spring up all over the county and they'll be ubiquitous, and AVs will be the best thing to ever happen to driving enthusiasts. We'll be able to push cars to their true limits without fear of legal reprisal.

11/9/17

I don't really buy that autonomous vehicles will be any more transformative than the personal computer. The personal computer upended everything. AVs affect things pertaining to driving/commuting/etc. Not sure I see autonomous vehicles being particularly cancerous for economic inequality versus other technology revolutions.

11/9/17

I think personal computers have, on net, degraded quality of life for humanity (improved business but degraded our personal lives). But AVs will be an unqualified positive for quality of life.

11/10/17

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11/9/17
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