NEW YORK (TheStreet) -- As I read, I can't help but recognize how much information is popping up on autonomous driving.
Who would have thought that this Jetson-like idea was even a possibility, let alone likely in our lifetime?
But that likelihood continues to grow, just as mass acceptance of it continues to grow -- albeit, slowly.
In the Wall Street Journal article "The Driverless Road Ahead" by Dan Neil, he excitedly described just how close we might be, detailed in a few excerpts below:
Seven years ago, Nissan did a study describing to consumers over-the-horizon features of autonomous cars. "Then it was...'Oh, you mean the car is going to take control, I'm not comfortable with that," said Nissan's Ms. Nguyen. "Now it's almost a complete 180 in attitude. They have a personal alliance with their smartphone, and the car is the last place where the Internet is not part of their lives."
A fully autonomous vehicle, something you'd put your mom in, is "maybe more than a decade" away, said Dr. Herrtwich [of Mercedes Benz's autonomous-research program] with a touch of regret. That's one way to look at it. The other is, Holy Cow!
Brace yourself. In a few years, your car will be able to drop you off at the door of a shopping center or airport terminal, and return when summoned with a smartphone app. Audi demonstrated such a system at this year's Consumer Electronics Show.
This is just a glimpse at what Neil covered in his piece. While I'm excited at the prospects of fully-autonomous driving, I tried to absorb what the impact might be like to the economy.
While at first it seems like it would have a positive affect on automakers, couldn't it hurt names like Ford(F) - Get Report and GeneralMotors(GM) - Get Report? Perhaps not, assuming they are selling the vehicles, but it seems like more people would abandon the role of vehicle ownership and adapt to car services such as Uber or Avis's(CAR) - Get ReportZipcar.
Of course, if you drive to work everyday, this may not be a negotiable situation. But for city dwellers and those who work remotely, it might very well be a viable alternative if they're only forced to drive once or twice per week.
What about the taxi drivers who are replaced by these cars? What about the insurance companies that suffer as a result of the drastically lowered risk of driving? Not that they don't turn the screws to us anyways, but theoretically, the lowered risk should pummel insurance premiums, if not completely eliminate them.
These are just some of the economic impacts fully automated cars could have, which appear to be more a when, not if, type of scenario.
Or could it have the opposite affect on the economy? In the U.S. alone, over $300 billion per year is lost due to the repercussions of auto accidents.
While we routinely throw around numbers in the trillions because of our national debt, $300 billion is no sneeze. Consider that Google(GOOG) - Get Report -- which coincidently, is one of the industry leaders for autonomous driving -- has a market cap of roughly $345 billion and is the third largest company in the U.S. $300 billion is roughly equivalent to the combined market caps of Disney(DIS) - Get Report, Starbucks(SBUX) - Get Report, and Facebook(FB) - Get Report. Losing that much money would be like eliminating this combination, every year.
But as public accepts seems to become more tolerant to same-sex marriage, recreational pot smoking, and overall, less discriminatory and more accepting, I think eventually autonomous car driving will eventually rule the road.
I'll admit, at first I'd be a little leery about approaching a busy intersection in a car that I'm not controlling. But I could quickly get used to hopping on the freeway -- even I have to drive myself to that point -- and then letting the car take over the more mundane task of driving on the highway, where fatigue is the biggest risk.
The technology is here, although not completely figured out yet, while public approval is slowly playing catchup and appears to be the steepest obstacle. I'd be willing to go out on a limb and guess that the younger generation would be more willing and excited to see automated driving than the baby boomers and old timers. Just a hunch.
However, the organization on how it would function is missing. Each car could operate independently, reacting to events that happen as they go, just like standard driving is today, only robotically. Or it could function as part of an infrastructure, with each car working together and communicating on a mass scale of efficiency.
With a central hub or intelligence center, it could communicate with all the cars. If there was an accident or backup, your vehicle-to-infrastructure car would already know 20 minutes before you got there, thus alternating the route and avoiding the situation altogether.
But using the infrastructure method could be rather difficult to implement. For starters, nearly all the cars in the country would need to be on the system for it work efficiently. Obviously, that's not likely, as there will be many people unwilling or unable to buy an autonomous vehicle. That makes the singular operating autonomous vehicle the most likely.
Also, the security issues are quite evident. What if we had a plethora of the country's autonomous cars running from a singular source or network, that was compromised? I would hope that we would create some level of security that could be deemed "unhackable," but in reality, it's unlikely.
However, this and other challenges have not prevented autonomous cars from coming to market. Slowly, they've been implemented into our society. The industry has been very careful with the introduction of these vehicle modifications. The leaders know they cannot simply plunk such a car right into our little, anti-change world. So they have to take it slow.
First, the self-parking car was introduced, solving the problem for the drivers who circle the block 50 times in an attempt to avoid that tricky parallel park. Adaptive cruise control and lane assist are other ways the autonomous car is slowly creeping into our lives.
But why is the public so hesitant to this change? I think Jayne O'Donnell summed it perfectly when she wrote, "No one would question a cure for cancer that could eliminate as many as 80% of the deaths, [Michael Toscano, CEO of the Association for Unmanned Vehicles Systems International] says, and that's what he believes eliminating the driver could accomplish."
Approximately 90% of road accidents are attributed to human error, making the argument for autonomous cars quite easy. Aside from being slightly uncomfortable with the idea, it's hard to argue that we wouldn't greatly benefit from autonomous vehicles.
I can just see the headlines now, Autonomous Car Kills Family of Four or Robotic Car Responsible For Fatal Weekend Accident. It reminds me of the Tesla Model S fires. There's now been two fire in total, neither spontaneous, that were caused by roadway accidents. Yet these continually fill the headlines, while there's a regular car fire 513 times per day.
Like Tuscano said, we wouldn't question a cure for cancer that saved most, but not all, of the vicious disease's victims, right? Even if it required releasing a little robot inside our bodies, I bet most of would be okay with it. So why this? Why fight something that, granted won't prevent every accident, but a majority of them? My guess would be control issues.
People, and even more so, Americans, who completely overestimate their driving skills, are just not comfortable with sacrificing control of their car to a lifeless being. But like all the other change we've been encountering, autonomous vehicles will definitely be in the mix as well.
The idea certainly has its challenges cut out for it, such as the infrastructure that it will run on, public acceptance, and deciphering traffic lights of all things. The industry leaders know they have to slowly win over the public with features like hands-free highway driving and self-park maneuvers before they ultimately cheer autonomous vehicles.
But cheer they will. One day.
DISCLOSURE: At the time of publication, the author was long shares of F, SBUX and DIS.
-- Written by Bret Kenwell in Petoskey, Mich.
Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter. Focuses on short-to-intermediate-term trading opportunities that can be exposed via options. He prefers to use debit trades on momentum setups and credit trades on support/resistance setups. He also focuses on building long-term wealth by searching for consistent, quality dividend paying companies and long-term growth companies. He considers himself the surfer, not the wave, in relation to the market and himself. He has no allegiance to either the bull side or the bear side.