Coming back from Ft. Wayne Indiana last week I drove for 1 ½ hours in my Subaru Outback without touching the accelerator or brake! I actually went for almost ½ mile with no hands on the steering wheel. That experiment ended when a red warning light started to flash a message on my navigation screen, “Please Put Your Hands Back on the Steering Wheel”. This is a Subaru, not a Mercedes or Lexus. It has a vision system with two cameras located at the top of your windshield on either side of the rear-view mirror. The salesman for Subaru claims that the vision system will stop the car if a collision is imminent. So far, I have not had the guts to check that promise.
The vision system called Eyesight calibrates an assured clear distance for the speed at which you are traveling. If I set the cruise control for 65 mph and someone pulls into my lane, the car will break down to an assured clear distance until the car in front of me moves out of my way. It will then speed up to 65 mph. The vision system also keeps my car from moving out of its lane without the blinker having first been engaged. This feature is a little clunky. If there is a curve in the road the car will lurch back toward the middle, sort of the way my daughters over steered when they had their temporary license.
The only apparent flaw in the Eyesight system is rain and snow. Moisture can block the cameras and the system will not operate. The other flaw is human override. There are times you forget you tapped the brakes which disconnects the cruise control. Those lanes get pretty hard to navigate with no hands on the wheel and no Eyesight when the system is not engaged.
The business implications of the driverless car are potentially devastating for the auto industry. Your car sits in a garage or parking lot for most of its life. If you take the cost of a car and divide it by the time you drive it versus the time you own it, the math for variable cost Uber or a car on demand is pretty compelling.
Take the case of an empty nester couple who both lease a car for 36 month that has a MSRP of $39,000, have a one hour round trip commute and drive to work and park in a garage. Assume they drive them an average of 15,000 miles each year. Assume the garage costs $100 per month. Also assume they can surrender their leased vehicle at the end of 36 months without any additional payments or credits. Assume insurance is $800 per car, the car gets 25 MPG and gas costs $2.50 per gallon. The couple gets an oil change for $40 every 3000 miles.
The leased car costs $8,248 per year and the Uber or driverless car at $0.15 per mile is $2,225 per year, entirely variable.
Here is how the leased versus driverless car might compare:
| Leased | Driverless | |
| Miles | 15,000 | 15,000 |
| Oil Change | $200 | 0 |
| Insurance | $800 | 0 |
| Parking | $1,200 | 0 |
| Gas | $1,500 | 0 |
| Lease Cost | $4,548 | 0 |
| Variable Cost | 0 | $2,225 |
| Total | $8,248 | $2,225 |
According to my research, the consumer price of Uber per mile is $0.12-$0.15 cents per mile depending on your city and time of day. When you consider how close we are to a driverless car, the cost per mile may only go down as you eliminate the driver.
I had never understood the disruptive effect of driverless cars until I had the Indiana driving experience. If these driverless cars can circulate without a driver and are available on demand, I may not own two cars.
Of course, when you have an athletic closet in your trunk and 75 pound chocolate lab, the driverless car is not an option. Soccer moms and multi-sport hackers like me will always default to the minivan and the SUV. However, we are likely to give up the car for commuting and that could be a big game changer for the auto industry.
Also, if you go to any car wash you realize that people love their cars and want to own great makes and models. The driverless car won’t stop auto enthusiasts or collectors. In fact, the capital freed up by the variable cost, driverless car may go for that Maserati, Ferrari or Tesla. I am looking forward to the “no hands” experience in my Maserati at full throttle in first and second gear!
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