How Self-Driving Cars Will Change The Economy And Society

Self-driving cars aren’t on the road yet. But when they get there, you can be sure they will have a major impact on the economy and society as a whole.

That’s according to a new report from the consulting firm McKinsey. It projects that, in the future, the technology will free up huge amounts of parking space, reduce auto accidents, and give people more time to consume TV shows, movies, and digital media. Autonomous vehicles will also change how we insure ourselves and decimate jobs in the logistics industry.

The report, which was recently released for the Geneva Motor Show, gives ten predictions based on interviews with people in car manufacturing and beyond. It’s basic premise is that autonomous driving is going to be hugely disruptive by the middle of the century, both economically and socially speaking.

In the first phase of change, up to 2023, McKinsey expects to see autonomous vehicles (AVs) in controlled environments (like mines) and in some commercial transport. Manufacturers will be forced to take a clear position on the future of AVs or risk being left behind.

In the next phase, up to about 2037, we’ll start to see AVs fully adopted. That will have consequences for the insurance industry. “Insurers might be required to shift their main goal from covering private customers from risk tied to ‘human error’ to covering [manufacturers] and mobility providers against ‘technical failure,'” McKinsey says.

After that, things really start getting interesting. McKinsey says we’ll all have an extra 50 minutes per day for work or relaxing because we won’t have to drive ourselves somewhere (kind of like users of public transit mostly already have). We’ll have 61 billion extra square feet of parking space, partly because AVs will park consistently and closer together than now. And, automation will make for safer driving, with savings of up to $190 billion a year, mostly from reduced health care costs.

In turn, these changes will provide opportunities for other industries. For example, the new in-car media market will be worth more than $5 billion a year. And AVs will serve as platforms and precursors for all sorts of other robot technologies for end-consumers.

Things won’t be better for everyone. If you work for Fedex or DHL, watch out. It’s likely that a robot will take your job before long. McKinsey expects the complete automation of the supply chain. But most of the changes seem to be positive. We just have to work out how to use that extra 50 minutes productively.