If driverless cars are going to change the world, they have to be affordable

We have been taking a deep look at the economics of driverless technology. Our conclusion? So-called robocars are unlikely to produce the societal changes tech companies are promising not because they don’t work but because they will cost too much.

Affordability is something self-driving enthusiasts often take for granted. They promote a future where sharing is caring. In this future, society is served by robocabs – for-hire vehicles that operate much like taxis today. The key difference is that software algorithms, rather than humans, are now in control. Without a driver to pay, rides become cheap enough to compete with conventional car ownership. This prompts consumers to abandon car ownership in droves and road safety ultimately soars. At least, that’s the idea. However, the reality is very different.