Ford CEO Jim Hackett made a surprising public admission earlier this month: He's not yet comfortable with the self-driving car technology his company or any other company has built. Hackett's comments highlight one of biggest challenges for automakers and tech companies working to develop autonomous vehicles: Convincing the public driverless cars are safe. A recent AAA survey found that over three-quarters of respondents admitted to being afraid of riding in a self-driving car, and only 10 percent said they'd feel safer with driverless vehicles on the road. With highly publicized incidents like Tesla's fatal Autopilot accident and Uber's self-driving trial fail, those fears shouldn't come as a big surprise. SEE ALSO: Drive.ai is the hot new company on the self-driving car scene But for all the billions of dollars and time invested in developing autonomous driving systems, the companies responsible for the technology will have to convert consumer fears into enthusiasm.
In March 2015, an Audi SQ5 began its nine-day journey from the Golden Gate Bridge to midtown Manhattan. The 3400-mile drive involved the normal obstacles: construction, highways, city driving, lane-passing. Until recently, the concept of a driverless car seemed like the stuff of science fiction. But much has changed in just a few short years as the technology behind autonomous vehicles has taken huge strides. The cross-country driving Audi, powered by technology from Delphi, drove in autonomous mode 99 percent of the time. The US federal government has also begun to embrace autonomous vehicles as a coming reality. In February 2016, the US Department of Transportation (US DOT) announced that it considers the AI powering Google's driverless cars (which have already logged hundreds of thousands of self-driven miles) officially a "driver"--marking a groundbreaking moment in the history of transportation.
Nearly three-quarters of Americans are afraid to ride in self-driving cars, according to the latest survey by the American Automobile Association. There is bad news ahead for the many automobile and technology companies currently developing, and road-testing, self-driving cars: many people are too frightened to ride in driverless vehicles. The American Automobile Association (AAA) May consumer trust survey on autonomous vehicles (AVs) found that 73% of U.S. citizens now fear traveling in an AV, compared with 63% just six months before. In addition, the survey found that two-thirds of millennials--a supposedly tech-loving generation--are also too fearful to ride in self-driving cars. The AAA even has unwelcome news from pedestrians and cyclists, with nearly two-thirds saying they don't trust AVs enough to use roads and sidewalks alongside them.
Because of self-driving, KPMG predicts that auto insurance will shrink 60% by 2050 and an additional 10% over the following decade. While more than half of individuals surveyed by Pew Research express worry over the trend toward autonomous vehicles, and only 11% are very enthusiastic about a future of self-driving cars, lack of positive consumer sentiment hasn't stopped several industries from steering into the auto pilot lane. The general sentiment of proponents, such as Tesla and Volvo, is that consumers will flock toward driverless transportation once they understand the associated safety and time-saving benefits. Because of the self-driving trend, KPMG currently predicts that the auto insurance market will shrink 60% by the year 2050 and an additional 10% over the following decade. What this means for P&C insurers is change in the years ahead. A decline in individual drivers would directly correlate to a reduction in demand for the industry's largest segment of coverage.
Cars capable of driving themselves may be on the showroom floor sooner than you think, but whether they should come with all the current essentials -- including a steering wheel and pedals on the floor -- has the auto industry at a fork in the road. Ford sided with the pioneering engineers at Google last week in announcing plans to introduce limited-use vehicles without traditional controls within five years. Some other major automakers -- and virtually all of them are well along in their work on self-driving vehicles -- say they will introduce automated elements one step at a time, until drivers accept that they no longer need to control their cars. The different approaches are rooted in conflicting views of safety and what the public is willing to accept. "It's almost like asking people before they even really knew what an iPhone was, how the iPhone might change their lives," said Johanna Zmud, senior research scientist at the Texas A&M Transportation Institute.