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Our final runner-up submission for the 2018 AutoInsuranceEZ.com Scholarship Contest comes from Brodie Daugherty. This essay takes a very close and meticulous look at ride-sharing businesses like Uber and Lyft. The submission also discusses the debate between whether or not self-driving vehicles are a blessing or a curse when it comes to road congestion and driver safety.

Q: The car industry has experienced a lot of changes in the last decade. Between ride-sharing apps like Uber and the rise of semi-autonomous vehicles, the world of cars is changing. Write an essay about the future of the auto industry. How will the way we drive cars change in the next 10-20 years?

The Fate of Transportation

We live in a world of rapid social and technological change, a world in which many fear the eroding currents of globalization and automation. One of the main areas in which the push of changing social attitudes and technological innovation is felt is the way we move about. Transportation’s biggest trends will be the rise of electric cars, and the reduced ownership of personal cars.

During the initial development of automobiles in the late 1800s, electricity was considered the future of transportation, as exemplified by Captain Nemo’s ode to electricity in Jules Verne’s popular novel 20,000 Leagues Under the Sea: “There is a powerful agent, obedient, rapid, easy, which conforms to every use, and reigns supreme on board my vessel. Everything is done by means of it. It lights it, warms it, and is the soul of my mechanical apparatus. This agent is electricity.”

Electric cars were initially dominant due to their quietness, ease of operation, and low maintenance cost. But mass-produced gasoline-run vehicles replaced them in the early 1900s. As concerns about climate change and pollution began to sway the public mind, the electric car industry revived in the 1990s. Electric cars still only compose a tiny fraction of the cars sold in the world, primarily because of the high price of batteries, as well as the slow recharging times that every Tesla owner is all too familiar with. Additionally, the components of electric car batteries, such as lithium, are mined primarily in a few countries, such as China and Chile. Understandably, many fear that such countries will use these materials as leverage against the rest of the world, reminiscent of the 1970s Arab oil embargo against the United States. Finally, charging stations are few and far between, a fact made more problematic by the low mileage rates of the electric cars on the market.

But there is no reason to think that these will be permanent blockades to the electric car revolution. Batteries are getting cheaper by the year. A network of charging stations that the electric car driver can really depend upon is being slowly filled in. And the possibility of new mines for lithium is being explored, so perhaps the fears of economic dependence on China are unfounded. Then there’s the fact that countries such as the U.S., the U.K., and many EU nations make it government policy to reward electric car purchasing and research through subsidies and tax credits.

It would be wise to consider, though, the idea that the electric car revolution is not the most important development in the near future. The dynamics of how we view transportation in society stay largely the same whether the car in our garage is run by electricity or gasoline. The most important trends are those which speak of a future in which we don’t have a car in our garage, in which we depend on taxis, Uber, and public transportation to get around.

The same environmental motivations that are pushing the world toward electric cars are also pushing us towards public transportation, a thing which may become more popular as high-speed trains are developed. In the near future, we may see developments such as “Hyperloop” trains which use vacuum tubes to eliminate air resistance, as well as improved “maglev” (magnetic levitation) systems. A maglev system uses magnetic repulsion to “float” a train above the ground, as well as magnetic forces to swiftly sweep it along its way. Both the Hyperloop and maglev systems promise great speed by cutting down friction. Whether they can deliver that inexpensively is yet to be seen.

The development that has really shaken the world is, indisputably, ride-sharing services like Uber. Founded in 2009, Uber became popular around the world, especially in urban areas like New York City. Its system is based on an app which allows users to electronically hail drivers for rides. Uber drivers are allowed to use their personal car, as opposed to traditional taxi drivers who must rent a car from the taxi service. Other ride-sharing (or, more accurately, “ride-hailing”) services such as Lyft and Haxi soon developed as competition.

Uber’s rise has not been without opposition. Taxi cab services have protested the breaking of their monopolies, and many – including New York City mayor Bill de Blasio – fear that the service will increase urban congestion. However, Uber could reduce congestion by reducing use of personal cars. Additionally, Uber drivers are not allowed to respond to “street hails,” only requests through the Uber app, and thus might be better for traffic than traditional taxi cabs.

Despite its popularity, Uber has been surprisingly unprofitable, partly because it has to share its profits with the drivers who contract with it. This is leading Uber to invest in autonomous (driverless) cars as a replacement for human drivers. Within the next four years, it plans on buying a fleet of 24,000 Volvo cars and fitting them with autonomous systems. For several reasons, autonomous vehicles represent the most significant and fundamental change that is likely to occur in transportation in the near future.

By making ride-hailing services much more profitable than they are at present, autonomous vehicles will enable such services to replace taxis. They will also provide an incentive for many people to not spend money on their own personal cars, and just click an app for a cheap ride when they need one. Of course, we won’t see change overnight. Semi-autonomous vehicles – in which a human driver is at the wheel or brake pedals, ready to take over if the robot does something stupid – will become widespread in a transition before fully autonomous vehicles. Thus, the financial profitability of ride-hailing services will be delayed by over a decade. In addition, autonomous vehicles may be restricted at first to predetermined routes, and thus would be of little use for long trips.

Of course, there will be many who own their own driverless cars instead of depending on ride-sharing services. But it is likely that the number of cars people will need to own will be reduced, because autonomous vehicles will likely have a “return home” button that sends the car home after the person using it has arrived at their work or school. Either way, the trend seems to be set in the direction of less overall car ownership.

The one thing that could mitigate this pattern, though, is the fact that the types of people who can’t drive now may decide to buy driverless cars in the future. For instance, the elderly and disabled will be able to “drive” since they don’t have to turn a steering wheel or shift gears. Additionally, children may be able to be transported to school without their parents being in the car. This brings us to the problem of whether driverless cars will increase or decrease the number of cars in the road.

A reduction in average car ownership may help reduce congestion. But more cars could be on the road if more people are using vehicles and vehicles can return home by themselves without anybody in them. Ultimately, no one can predict what effect the end of human driving will have on urban congestion.

All this does not mean that a world – or an America – without personal cars is inevitable. It is possible that the individualism that, for better or worse, has been one of America’s defining characteristics may prove to be a social barrier that no economic incentives can mount. But it does seem that personal car ownership will start to decline soon.

In summary, it seems that, although electric cars may gain the advantage over gasoline cars in the next ten to twenty years, the most significant trends are those that undermine individual car ownership in favor of public transportation and increasingly cheaper ride-hailing services.

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