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The streets of San Francisco will soon witness the presence of driverless cars operating 24/7. The California Public Utilities Commission has granted General Motors’ Cruise and Alphabet’s Waymo the ability to run fleets of autonomous taxis for public use. Both companies have plans for nationwide expansion. Experts estimate that by 2035, autonomous driving will generate annual revenue of up to $400 billion, according to McKinsey.
The main hurdle in achieving a driverless future lies in the lack of comprehensive regulations. The CPUC’s decision has no influence on other states and does not establish a new safety framework. The commission evaluates each case individually, scrutinizing safety documents submitted by companies seeking to provide their services.
As a result, expansion across the U.S. will be gradual and implemented on a localized basis. Cruise already operates in Austin and Phoenix, while Waymo has a ride-hailing service in Phoenix and plans further expansion in Los Angeles and Austin.
Unlike other forms of transportation, which have nationwide certifications, such as the Federal Aviation Administration certifying commercial pilots after they complete 1,500 hours of flying, driverless technology faces fragmented regulations.
Cruise and Waymo report that their vehicles have collectively covered over one million miles in autonomous mode without being involved in any accidents resulting in human fatalities. Cruise claims that its cars have been involved in half the number of collisions compared to human drivers in similar environments. The National Highway Traffic Safety Administration monitors all incidents, but national standards have not been established based on this data.
For companies to recover the costs associated with developing autonomous vehicle technology, expanding their paid services is crucial. General Motors has invested over $5 billion in its autonomous division, which has not yet turned a profit. In the previous quarter, revenue was only $26 million.
Proponents of autonomous vehicle technology argue that it will reduce collisions caused by human driver errors, thereby decreasing road fatalities, traffic congestion, and insurance rates.
However, without national regulations, the pace of expansion will remain slow.
The Lex team is eager to hear your thoughts. Please share your opinions on whether you believe we are on the verge of a driverless car revolution in the comments section below.
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