The AV revolution

From the MM&D January-February 2015 print edition

A new study from The Conference Board of Canada, in collaboration with the Van Horne Institute and Canadian Automated Vehicles Centre of Excellence (CAVCOE), Automated Vehicles: The Coming of the Next Disruptive Technology, estimates that self-driving cars could be on the roads by 2020-25 and economic benefits for Canada could total over $65 billion per year.

“The potential scope for impacts of automated vehicles on Canada is profound,” said Vijay Gill, director of policy research at The Conference Board of Canada.
“Self-driving cars could free up driving time, significantly reduce the number of car accidents, minimize road congestion and reduce the amount of fuel that we consume. However, these new vehicles will pose some economic and social challenges including possible job-displacement and required employment retraining.”

The impact of AVs is significant with total potential benefits for Canada estimated at $65 billion. The cumulative potential benefits from the above-mentioned factors are summarized as follows:
• Fewer collisions – $37.4 billion
• Saving drivers’ time – $20 billion
• Fuel cost savings – $2.6 billion
• Reduced traffic congestion – $5 billion

There will also be wider economic and technological effects including substantial changes in land values as AVs increase sprawl and urban intensification. There is a strong likelihood that people will be willing to tolerate longer commutes if they are able to be productive in the vehicle, especially if it means trading a longer commute for cheaper housing.

The study also suggests automated vehicles could play a significant role in preventing 1,600 of Canada’s current 2,000 annual road fatalities.

“The future impact of this technology on Canada’s transportation system should be carefully considered,” said Peter Wallis, president and CEO of the Van Horne Institute.

“Transportation in Canada is an enabler of our economy and future policy or legislative changes should encourage the deployment of this technology.”
On the effects on freight transportation, the report states:

“Road freight costs could be significantly reduced, while the efficiency of truck use could be greatly improved by removing driver working time restrictions.
We anticipate a transition from the human driver 100 per cent of the time, to an “operator/driver” role where the truck takes on more and more of the driving task. This would likely be followed by a “chaperone” phase where one driver is initially responsible for a single truck before a single chaperone becomes responsible for multiple trucks in a convoy. After this, we anticipate that trucks will be driving unmanned.

By far the biggest cost saving for trucking costs is the removal of the driver, as salary costs, expenses, health care, and insurance are removed or substantially reduced.
Secondary cost reductions will result from improved fuel efficiency from the robot driver and reduced maintenance and repair requirements. This is because the truck will consistently drive as carefully as the very best human drivers do when they are at their highest level of performance.

Overall, we estimate that 40 per cent of truck operational costs could be saved by automating the truck. In addition, it is possible that many truck operators will find that because the truck can work up to 20 hours a day, rather than being limited to 14 hours a day by a driver complying with working time regulations, an additional 43 per cent increase in vehicle efficiency can be achieved.”

Jobs and trades will change as direct and indirect employment displacement may also occur for courier services, taxi and bus drivers, auto insurance, driving instructors and parking attendants.

On the positive side, there will be new business opportunities for the auto and technological industries related to the design and manufacture of sensors, software, etc. for AVs.

While transit and transportation industries will be directly affected, AV roll out will also impact any business involved in freight or passenger transportation: car-sharing, car-rental companies, insurance companies, retail and commercial building management (who provide large parking spaces).

AVs will require active planning on the part of all levels of government and business. Leadership at the municipal, provincial and federal levels need to incorporate the impact of AVs into urban planning, transit and the design of infrastructure projects and encourage the harmonization rather than fragmentation of such a huge undertaking.

The report suggests five potential priorities for Canada in anticipation of AVs entering mainstream use:
• “Augment political leadership at the federal level, comparable with what we see in other countries, especially for the impact on vehicle standards, the technology sector, the auto industry, and the economy. Provincial and local governments are largely responsible for the delivery and operation of road infrastructure, but the federal government can play a coordinating role in order to encourage harmonization rather than fragmentation.”
• “Enhance political leadership at the provincial and territorial level for transportation systems and regulations. Transportation infrastructure investments are typically planned and implemented based on forecasts of travel demand of 30 years or longer. AVs will certainly be a reality well within that time frame.”
• “Boost leadership at the municipal level to incorporate the impact of AVs into urban planning, transit, and the design of infrastructure projects— and for the same reasons as above.”
• “Measure the potential impact of AVs on Canadian businesses. For many, AVs will provide an opportunity to reduce costs and do business more efficiently. Other businesses may be marginalized, unless they can adapt early enough to take advantage of the beneficial aspects of AVs.”
• “Encourage the creation of a Canadian ecosystem to compete for a share of the global market for AV software, parts, and components—or at least ensure that we are not erecting barriers to this happening organically.”

The study was funded and received in-kind support from The Conference Board of Canada’s Centre for Transportation and Infrastructure, The Van Horne Institute, and The Canadian Automated Vehicles Centre of Excellence (CAVCOE). The full report can be downloaded free of charge from the Conference Board’s e-Library.