You can’t browse the internet without seeing a sensational headlines announcing the imminent ascendency of the driverless car.
“Fully driverless cars could run on UK roads by end of year”, “Britain’s driverless revolution will be a car crash as safety rules are recklessly scrapped” and “Driverless Car! It’s about to happen on UK roads” – to name but a few.
But is it? Or are these all cases of not letting the facts get in the way of a good headline?
Take the report of safety rules being “recklessly scrapped”.
Current guidelines mandate human supervision in the vehicle being tested. The “scrapping” refers to an announcement from the Department for Transport that doesn’t actually commit to removing this requirement, but rather to developing a process that may lead to removing the need for on-board human supervision during testing.
We are certainly moving forwards, but slower than the media might lead you to believe. So here’s a dose of reality to help to separate fact from fiction.
First, when will we see driverless cars on the road?
Obviously there is uncertainty here, as this relies on a host of technological and regulatory factors. Significant penetration is not expected to occur until 2035, although aggressive projections suggest 2025, while conservative projections say 2060 (or perhaps never).
Much of the optimism regarding this timeframe is either driven by organisations involved in the manufacture of autonomous vehicles, or based on clumsy comparisons with other disruptive technologies such as computers, digital cameras, and smartphones.
But there are crucial differences. Vehicles typically take much longer to design, test, and develop, are more expensive, and rely more on public infrastructure than personal gadgets do.
Nonetheless, progress is clearly underway, meaning that politicians, businesses, and drivers all need to be considering the impact of autonomous vehicles on our roads. And that includes the insurance industry.
Driverless cars will significantly change how vehicles are insured, but not necessarily in the way that you think. One figure floating around is that, because algorithms are so much safer at driving cars than humans, widespread adoption will see a 90 per cent decrease in insurance claims.
This, however, is a fantasy.
While the reduction in accident frequency due to cutting out human error may lower average premiums, there are likely to be many factors that will offset this fall, not least the increased risks associated with the introduction of new technology using different standards, in different regulatory regimes, while sharing the roads with manual vehicles for the foreseeable future.
New risks will also appear in relation to cyber security, software and technology malfunctions, connectivity and infrastructure glitches, and the failure of owners and users to maintain their vehicle in an adequate condition (for example, not downloading the latest software updates).
In addition, some conventional risks will continue, such as weather, malicious damage, and possibly theft.
So for motorists hoping that this will drive down their premiums, don’t get too excited. Premiums will eventually fall, but not for some time, probably not until 2030.
And in terms of liability, this will partially shift from the driver to the manufacturer as the control of cars moves from human input to computer.
However, evidence suggests that most regulators will still require owners of driverless cars to continue purchasing dedicated motor insurance in some form. In short, autonomous vehicles will transform but not eliminate car insurance.
Driverless cars are no longer a pipedream. The direction the technology is headed in is clear for all to see. But rather than taking our hands off the wheel and hoping we coast into a driverless utopia, we need to consider the facts of what this futuristic universe will actually look like.