We are excited to launch Author’s Corner, a new offering from Biznology that will feature excerpts from our contributors’ latest books. In honor of Earth Day, we are very pleased to feature this excerpt from The Great Pivot: Creating Meaningful Work to Build a Sustainable Future from our new contributor, Justine Burt.
Disruption is Coming
In April 2018, the former Vice Chairman of General Motors, Bob Lutz, spoke at the annual meeting of the Society of Automotive Engineers in Detroit with unwelcome news. “We are approaching the end of the automotive era,” he said. He predicted that vehicle autonomy will gradually take over more and more of the task of driving, and that “the end-state will be the fully autonomous module with no capacity for the driver to exercise command. You will call for it, it will arrive at your location, you’ll get in, input your destination and go to the freeway.” He continued that “people who like to drive, and car companies that rely on branding, have another 25 years at the most. After that, it’s all over.” Lutz admitted that this transition will bring “a vast improvement to national productivity.” Traffic jams and accidents will become rare events, and perhaps some 90% of the 40,000 annual traffic deaths in the U.S. will be eliminated.
The Big Three U.S. auto manufacturers anticipate an imminent shift in mobility. They know that the average personal vehicle sits unused 95% of the time, that Millennials buy vehicles less often than previous generations, and that internal combustion engines contribute to climate change. They understand these problems and are planning for a different future. As well, because the Big Three know that people want mobility but not necessarily to own a vehicle, they anticipate a post-ownership future. This is why automakers have been investing in Mobility-as-a-Service and self-driving vehicles like the ones Lutz describes: because they want to be part of the future of smart, low-carbon mobility. Ford invested in bike-sharing systems; GM runs a car-sharing service called Maven; and Waymo purchased 62,000 Chrysler minivans to test self-driving technologies. All three are hedging their bets in order to figure out how the smart mobility future will shake out.
How Big Oil Will Die
As auto manufacturers prepare for a shift to electric autonomous vehicles to maintain market share, people who care about climate change are pinning their hopes in part on autonomous vehicles as a means to shift away from fossil fuels. Many of us, frustrated by the slow pace of divestment from fossil fuels by institutional investors, gleefully read Seth Miller’s 2017 NewCo article “How Big Oil Will Die.” The crux of Miller’s convincing argument revolves around the potentially dramatic cost savings as society switches from internal combustion engines to electric vehicles, then automates the driving function.
Consider the following technical comparison of internal combustion engines and electric vehicles, according to Miller:
• An internal combustion engine drivetrain has about 2,000 parts
• An electric vehicle drivetrain has about 20 parts
• A system with fewer moving parts will be more reliable
• Internal combustion engines last about 150,000 miles, whereas current estimates of the lifetime of electric vehicles is 500,000 miles
Besides improved reliability and a longer lifespan, the total cost of owning an electric vehicle is a fraction of the cost (one-quarter to one-third) of a gasoline-powered vehicle. Miller cites Stanford University professor Tony Seba’s analysis comparing the 2017 rate of $0.535 per mile that the Internal Revenue Service (IRS) allowed businesses to write off their taxes, versus the $0.13 per-mile cost for a fleet electric vehicle.
Seba predicts the following roll-out of autonomous vehicles:
• Self-driving cars will launch around 2021
• A private ride will cost $0.16 per mile, eventually falling to $0.10
• A shared ride will cost $0.05 per mile, eventually falling to $0.03
• Oil use will peak by 2022
• Used car prices will crash by 2023 as people give up their vehicles; new car sales for individuals will drop to nearly zero
• Gasoline consumption by cars will drop to near zero by 2030, and total crude oil use will have dropped by 30% over current numbers
The aggressive timeframe in this scenario seems like wishful thinking for those who would like to see autonomous vehicles succeed and the oil industry descend into a death spiral. Even if this transition rolls out more slowly, the driving force behind it is the main assumption in Seba’s analysis: given a choice, people will select the cheaper option.
People adopt new technologies for many different reasons. As we think about what a low-carbon mobility future looks like and the work needed to build it, let’s consider the human benefits that will accrue: cost savings, improved health, improved quality of life, and a stable climate. At the same time, we need to plan for the disruptions that will happen to the working world as we transition from one dominant transportation method to several different options. Because in the next decade potentially millions of people who drive for a living could suffer the hardship of job loss, we need to draft a strategy for their transition into new lines of work.
A Giant Shift in Transportation Jobs
In 2016, 4,285,400 people in the U.S. derived their primary income from driving. According to the Bureau of Labor Statistics, the categories for professional drivers break down into the following numbers:
• Heavy truck and tractor trailer drivers—1,871,700
• Delivery truck drivers—1,421,400
• Bus drivers—687,200
• Material moving machine operators—682,000
• Taxi, ride-hailing drivers, and chauffeurs—305,100
In addition to the people who drive for a living, U.S. car and truck dealerships employed 1.1 million people in 2016, according to the National Automobile Dealers Association. This includes those who sell and service vehicles. Will a large number of these drivers and people who sell and service vehicles need to transition to other work? If so, what work will be available for them?
The jobs available in the transportation sector of the future will depend partly on two things: our vision for our future transportation system and how we invest in it over the next decade. Do we value having well-developed alternative transportation options that are safer, healthier, cleaner, cheaper, and better for the climate? This is a discussion worth having in our society. Engaging in civic discussions about the future of our transportation system and encouraging specific types of public and private investments will ensure we help steer the discussion, not get run over by it.
