Automotive

Self-Driving Trucks are Here – What are the Economic Consequences?

Trucks

Despite all the advantages of self-driving technology in the cargo industry, its widespread adoption is not as close as many people would like it to be.

Uber has been testing unmanned delivery on Arizona’s highways for several months now. However, it is still too early for drivers to worry. Even Uber, in such a sensitive matter, points out that they hope to increase the number of jobs by maintaining the trucks and increasing the number of local transports. However, there are of course more factors.

In early 2016, former Google employees founded Otto in San Francisco to create a self-driving truck. In just six months, it was bought by Uber for $680 million. It was the reason for the hype around the unmanned driving technology. In addition to Uber, this goal is pursued by several other startups with the IoT engineer team: TuSimple, Embark, Drive.ai, Starsky Robotics.

The use of unmanned trucks really has huge potential. 

  • First, in the USA and China, more than 40% of transportation costs are the truck drivers’ salaries. 
  • Second, unmanned control technology should improve road safety. 
  • Third, with increased disposal of assets and lower operating costs, productivity will increase. 

Today, U.S. law allows truckers to drive for only 11 hours a day — unmanned trucks do not need to sleep and rest, they can be on the road the whole day. Do not forget about and keep in mind the multiplier effect — positive changes in cargo shipping will also affect other sectors of the economy.

Despite the significant advantages of this technology, it threatens to leave millions of drivers unemployed. In the U.S., about 2 million truckers, and in China — up to 16 million. However, in the next 10-15 years, there will be no widespread unemployment. In order to better understand why the introduction of unmanned trucks will take a long time, it is necessary to consider the critical path to technology impact on employment, which consists of three stages:

  1. Technology development
  2. Changes in legislation
  3. Distribution and impact on employment

Development of unmanned truck technology will take at least 5 years

There are 5 common levels of self-driving technology, from Level 1 which assumes minimal participation of artificial intelligence, for example, cruise control, and to Level 5, when the car is driven not worse than a man on an unknown road. To make the use of the technology among trucks widespread, Level 4 which means using the detailed maps, is enough. Since the roads where the trucks are allowed to drive are marked in most developed countries, the problem of detailed maps has a clear range of problems to be solved. Therefore, it is logical to discuss the implementation of Level 4.

There is a consensus among the developers of unmanned technology that before Level 4 to be common among typical cars, there are still 3-5 years. For example, the CEO of NVIDIA recently announced that fully autonomous vehicles will be on the U.S. roads by 2022, Uber started working with trucks only in 2016, and keeping in mind that the management of the truck is more complex and carries more security risks, it can be assumed that self-driving trucks will appear after cars, that is, not less than in 5 years.

Laws will be passed slowly and step by step

Auto manufacturers are already working closely with regulators and even conducting experiments. Because of safety concerns, regulators are passing laws step by step and only allow technology testing in certain regions and under certain conditions. For example, now only half of the states in the USA have legislation regarding unmanned vehicles. We are not talking about trucks yet, and this area is much more regulated.

No matter how fast the developers and car manufacturers are, the regulators will slow down the process. It is worth noting that, for example, in the U.S., truckers have quite a strong lobby, which can resist the introduction of self-driving trucks. Thus, the regulatory implementation will take some more time, at best a couple of years.

The car park won’t change quickly

Let’s assume that the technology is developed and the laws come into force. The only thing left to do is to replace the current car park with the unmanned trucks.

Let’s consider the USA. Over the past few years, 200,000-250,000 trucks were sold annually. Today, there are about 2 million trucks on the roads in the USA. According to American Trucking Associations, the tonnage carried by trucks will grow by 30% by 2027. That is, about 2.6 million trucks will be needed. Self-driving trucks can be used twice as efficiently, so we can assume that in 2025, about 1.5 million unmanned trucks will be needed. Then, provided that only unmanned trucks are produced, it will take at least 6 years to fully replace them.

However, the assumption that the entire production will consist of self-driving trucks is quite ambitious. It is possible to draw a parallel with electric vehicles. Since the announcement of the Tesla S model, which more than other popularized electric cars, it has been 5 years. In 2016, about 700,000 Tesla cars were sold worldwide, which is less than 1% of all 80 million sold cars. This trend confirms that the substitution of production will not happen immediately.

Global sales of electric vehicles

In addition, by 2022, the deficit of truckers in the United States will have reached 239,000. This deficit will be compensated by self-driving trucks, so the first few years of production will not affect the employment and will not change the economic climate drastically.

Conclusion

Thus, despite all the advantages of unmanned technology in the cargo industry, its widespread adoption is not as close as many people would like it to be. Even if everything goes according to plan, the impact on employment will not begin in the coming 10-15 years. The problem of unemployment in this field will indeed be more than noticeable. Structural unemployment caused by changes in technology is considered to be one of the most difficult to solve, so it is worth addressing right now. Truck drivers have time to prepare themselves because relying on the state is not the smartest strategy.

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