How Google’s Self-Driving Car Will Change Everything

Reviewed by Ebony HowardFact checked by Vikki VelasquezReviewed by Ebony HowardFact checked by Vikki Velasquez

Imagine getting into your car, typing—or, better yet speaking—a location into your vehicle’s interface, then letting it drive you to your destination while you read a book, surf the web, or nap. Self-driving vehicles—the stuff of science fiction since the first roads were paved—are coming, and they’re going to radically change what it’s like to get from point A to point B.

In 2009, Google started the self-driving car project with the goal of driving autonomously over 10 uninterrupted 100-mile routes. In 2016, Waymo, an autonomous driving technology company, became a subsidiary of Alphabet, and Google’s self-driving project became Waymo.

Since then, Waymo has invited the public to join the first public trial of autonomous vehicles operated by the Waymo Driver and introduced its first fully autonomous vehicles operated by the Waymo Driver on public roads without anyone in the driver’s seat. Waymo One, its driverless ride-hailing service, now operates in Phoenix, San Francisco, and Los Angeles and is launching in Austin.

But there have been setbacks. In 2023 Waymo put its driverless trucks division on hold. And in May 2024, the National Highway Traffic Safety Administration (NHTSA) opened an investigation into Waymo’s self-driving vehicles after its robotaxis exhibited “driving behavior that potentially violated traffic safety laws.” This followed Waymo’s recall of 444 autonomous vehicles earlier in the year after two minor collisions in Arizona.

Key Takeaways

• The hype around driverless cars has grown rapidly over the past several years, with many big technology companies getting behind the concept.
• Google launched its Waymo division to develop and market consumer-ready driverless vehicles around the globe.
• The company, along with several others in the tech and auto industries, is betting that driverless cars will change the way we get around in a major way.
• Among the revolutionary changes could be safer roads, fewer fossil fuels, and lower transportation costs.

Basic Technology Already in Use

Advanced driver assistance technology includes front-crash prevention systems, blind-spot detection, lane departure prevention as well as rear-crash prevention systems. According to the Insurance Institute for Highway Safety, “systems with forward collision warning and automatic braking cut rear-end crashes in half, while forward collision warning alone reduces them by 27%. The auto-brake systems also greatly reduce rear-end crashes involving injury.”

These systems were quickly followed by technology that allows cars to self-park by sizing up a free spot and automatically steering into it, with the driver only controlling the accelerator and brake pedals. Mercedes-Benz took autonomous driving even further when they introduced Drive Pilot, which allows the driver to hand over direct control of steering and speed in certain circumstances, while still supervising the overall operation of the car.

In 2018, Waymo announced that they would be partnering with Jaguar to make self-driving cars available by 2020. Thanks to some extraordinary advancements, self-driving cars were rolled out in San Francisco in 2021. However, the current technology on the market is limited to cars that will automatically brake for you if they anticipate a collision, cars that help keep you in your lane, and cars that can mostly handle highway driving.

The idea behind self-driving cars is fairly simple: build a car with cameras that can track all the objects around it. The car should react if it’s about to steer into one. And once in-car computers know all driving rules, they should be able to navigate to their destination. In the end, you might say that the execution of these ideas has been more complicated than was anticipated.

Waymo’s cars, the leader in self-driving technology, use high-resolution cameras and lidar (light detection and ranging, which is a way of estimating the distance to another object by bouncing light and sound off things). This technology helps the self-driving car identify where other cars, cyclists, pedestrians, and obstacles are and where they’re moving.

A Drastic Change

With the adoption of any new revolutionary technology, it is predicted there will be problems for businesses that don’t adjust fast enough to future developments in self-driving car technology. Futurists estimate that hundreds of billions of dollars (if not trillions) will be lost by automakers, suppliers, dealers, insurers, parking companies, and many other car-related enterprises. And think of the lost revenue for governments via licensing fees, taxes, and tolls, and by personal injury lawyers.

Who needs a car made with heavier-gauge steel and eight airbags (not to mention a body shop) if accidents are so rare? Who needs a parking spot close to work if your car can drive you there, park itself miles away, only to pick you up later? Who needs to buy a flight from Boston to Cleveland when you can leave in the evening, sleep much of the way, and arrive in the morning?

Indeed, one of Google’s goals is to facilitate car-sharing. That means fewer cars on the road. Fewer cars, period. Who needs to own a car when you can just order a shared one and it’ll drive up minutes later, ready to take you wherever you want?

Automated ride-sharing is expected to dramatically reduce the number of cars on the road, especially considering 67.8% of people commute to work alone. Transportation was the second biggest household expense in 2022 (the most recent data available) at 16.9% —$12,295 a year—for an asset that they only drove for an hour a day, on average.

In 2050, self-driving cars are expected to create approximately $800 billion worth of opportunities for automakers and technology developers, according to a report by Securing America’s Future Energy (SAFE). Software developers stand to win big.

A Manufacturing Revolution

If you’re an autonomous vehicle maker, you could see an initial surge in the annual new and used car sales globally. But as soon as the technology takes hold, sales could fall off significantly as sharing popularizes.

Cars will always need steel, glass, an interior, a drivetrain, and some form of human interface (even if that interface is little more than a wireless connection to your smartphone). But much of everything else could change. As an example, take front-facing seats; they could become an option, not a requirement. Automakers that see the changes coming—such as how the big profits are secured downstream by car servicers, insurers, and more—are focusing on services as much as on what and how they manufacture.

Infrastructure Transformation

With fewer cars around, parking lots and spaces that cover roughly one-third of the land area of many U.S. cities can be repurposed. That could mean temporary downward pressure on real estate values as supply increases. It could also mean greener urban areas and revitalized suburbs if longer commutes become more palatable. And if fewer cars are on the road, federal, state, and local government agencies may be able to reallocate a good portion of the roughly $206 billion spent annually on highways and roads.

Changing Oil Demand

If you’re in the business of finding, extracting, refining, and marketing hydrocarbons, such as Exxon Mobil (XOM), Chevron (CVX), or BP (BP), you could see your business fluctuate as use changes.

“These vehicles should practice very efficient eco-driving practices, which is typically about 20% better than the average driver,” says Robin Chase, the founder and former CEO of Buzzcar, a peer-to-peer car-sharing service, and co-founder and former CEO of Zipcar, “the leading car-sharing network.” “On the other hand, if these cars are owned by individuals, I see a huge rise in the number of trips, and vehicle miles traveled. People will send out their cars to run errands they would never do if they had to be in the car and waste their own time. If the autonomous cars are shared vehicles and people pay for each trip, I think this will reduce demand, and thus (vehicle miles traveled).”

Safety Dividend

Autonomous vehicles are also expected to be safer. “These cars won’t get drunk or high, drive too fast, or take unnecessary risks—things people do all the time,” Chase says.

“Over 90% of accidents today are caused by driver error,” says Robert W. Peterson, professor emeritus at the Santa Clara University School of Law. “There is every reason to believe that self-driving cars will reduce the frequency and severity of accidents, so insurance costs should fall, perhaps dramatically.”

“Cars can still get flooded, damaged, or stolen,” notes Michael Barry, former chief communications officer at the Insurance Information Institute. “But this technology will have a dramatic impact on underwriting. A lot of traditional underwriting criteria will be upended.”

Barry said it’s too early to quantify exactly how self-driving vehicles will affect rates, but added that injured parties in a crash involving a self-driving car may choose to sue the vehicle’s manufacturer or the software company that designed the autonomous capability.

Initially, insurers such as State Farm Insurance, Allstate Corp. (ALL), Liberty Mutual Group, Berkshire Hathaway Inc.’s (BRK-A) GEICO, and Citigroup Inc.’s (C) Travelers Group could see a huge benefit from lower accident liabilities. But they may wind up losing a big portion of the over $362 billion in personal auto premiums they write every year as fewer cars take to the road.

Some experts have even speculated that mandatory insurance for cars could be dropped. And as long as we’re talking about financial services, what about the multitude of banks and creditors that lend buyers money for car purchases, a total of $1.51 trillion as of the third quarter of 2023, if sales volume falls?

According to a University of Texas report, if only 10% of the cars on U.S. roads were autonomous, approximately $25.3 billion of savings could be realized via less wasted time and fuel, as well as fewer injuries and deaths. At 90%, the benefit rises to $189 billion a year.

Closer to Home

Self-driving cars could have a substantial impact on the taxi and limousine industries and could potentially create new ones. Chase noted that they could be used to share specific trips, as a kind of pay-as-you-go, small-scale public transportation—for example, taking a disparate bunch of Manhattanites to the same beach in the Hamptons in one trip.

A 2018 study suggests a fleet of 7,000 driverless taxis serving Manhattan would only cost about $0.29-$0.61 per revenue mile compared to taxis that charge at least $8 for a mile. According to New York Motor Insurance, there are licenses for over 13,000 taxis in New York City.

Self-driving cars may also challenge train lines. “A self-driving car offers much of the convenience of rail service with the added convenience that the service is portal-to-portal rather than station-to-station,” Peterson says.

On the other hand, a fleet of self-driving cars available at the station may make rail service more palatable. “The technology has already been adopted in closed systems, such as campuses, air terminals, and mining,” Peterson noted. European countries are also experimenting with the platooning of automated trucks, though the prediction that driverless trucks would be hauling freight in the U.S. in 2021 hasn’t come to pass.

Risks and Hurdles

There are regulatory and legislative obstacles to the widespread use of self-driving cars and substantial concerns about privacy. (Who will have access to any driving information these vehicles store?) There’s also the question of security, as hackers could theoretically take control of these vehicles, and are not known for their restraint or civic-mindedness.

There are other challenges as well. According to a GlobalData report on autonomous vehicles, “Creating vehicles that can safely drive themselves with no oversight from humans has proven to be incredibly difficult.”

In May 2024, the NHTSA alerted Waymo that it was investigating incidents in its cars equipped with the company’s automated driving system following 22 reports of “unexpected driving behaviors leading to crashes and potential traffic safety law violations.” After the investigation was opened, the Office of Defects Investigation of the NHTSA identified an additional nine reports. This investigation is the first stage before the agency could demand a recall if it believes the vehicles pose an unreasonable risk to safety.

The Future of Waymo

In March 2018, Waymo officially launched Waymo Via, its trucking division. Since 2017, Waymo Driver has been learning to drive large Class 8 trucks in the same way that it had learned how to drive passenger vehicles. But in a July 2023 blog post, co-CEOs Dmitri Dolgov and Tekedra Mawakana announced that “Given the tremendous momentum and substantial commercial opportunity we’re seeing on the ride-hailing front, we’ve made the decision to focus our efforts and investment on ride-hailing” and to put the brakes on the trucking program.

Waymo One, Waymo’s robotaxi service, has made it possible for anyone with a credit card and the Waymo app to call up a ride in San Francisco as well as Phoenix and its suburbs, and limited rides are available in Los Angeles and Austin.

Is Google Making a Car?

Google has made it clear that it has no plans to build cars itself. Waymo is a self-driving technology company; it does not intend to manufacture and sell its own line of vehicles.

What Year Will There Be Self-Driving Cars?

Early estimates about self-driving cars being the norm by 2020 have turned into having a few research vehicles on the road by 2020. Even if the technology is not developing as fast as expected, computer-processing capabilities and sophisticated artificial intelligence systems are becoming more advanced and more affordable every year. It’s not clear when all the pieces will truly fall into place to allow for driverless technologies to safely navigate public roads among traditional cars. While experts agree that there will be a time in the future when this is true, they disagree on the timeline.

How Much Does the Google Car Cost?

Google does not manufacture or sell its own cars. However, many cars now come with semi-autonomous features, including models from Tesla, Mercedes-Benz, Nissan, Chevrolet, and others. For example, as of 2024, you can purchase a semi-autonomous Honda Civic Sport (starting MSRP: $26,250) that comes with advanced driver assistance systems (ADAS) that control the steering, lane changing, acceleration, and braking while the car is cruising on the highway. You can also purchase a Tesla Motors vehicle (Model 3, from $29,990) that comes equipped with its semi-autonomous Autopilot feature.

The Bottom Line

However it plays out, these vehicles are coming—though not as quickly as many had predicted. Their full adoption will take decades, but their convenience, cost, safety, and other factors will make them ubiquitous and indispensable. Such as with any technological revolution, the companies that plan ahead, adjust the fastest, and imagine the biggest will survive and thrive. And companies invested in old technology and practices will need to evolve or risk dying.

Read the original article on Investopedia.