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Autonomous Vehicles: The Employment Outlook (Part 3 of 4)

Just as flesh-and-blood horse power was displaced by engine horsepower, human driving skills will transfer to the machine intelligence of driverless cars. Will new jobs be created or found to replace those displaced by self-driving vehicles?

• By Barry Devlin
• July 13, 2016

"Why this time is different: going from horses to cars was fine for people, but now we're in the position of the horses" Tweet by Ben Kinnard (@CaptainKinnard), 6 June 2016

Ben Kinnard's tweet was aimed at a common story used to dispute the potential employment impact of autonomous vehicles and automation in general. This story begins with the fear that early-20th-century city streets were about to disappear under the volume of manure being deposited by a rapidly growing horse population. The rise of the automobile swept away the horse dung but raised new fears about the livelihoods of stable boys, farriers, and coachmen. These fears also turned out to be unfounded; new jobs as valets, mechanics, and drivers easily took up the slack.

The Fourth Horseman of the Autonomous

Many economists and business leaders continue to claim that this time is no different: don't worry -- new jobs will be created or found to replace those displaced by self-driving vehicles. Unfortunately, as Charles Murray, W.H. Brady Scholar at the American Enterprise Institute, opines in a recent Wall Street Journal article: "It takes a better imagination than mine to come up with new blue-collar occupations that will replace more than a fraction of the jobs (now numbering 4 million [in the U.S.]) that taxi drivers and truck drivers will lose when driverless vehicles take over."

These drivers are indeed more closely positioned to Kinnard's horses rather than the coachmen of the previous transition. When cars became common, the need for horses disappeared and their numbers dropped dramatically. Coachmen became drivers and blacksmiths adapted their metalworking and mechanical skills to automobiles. Just as flesh-and-blood horse power was displaced by engine horsepower, human driving skills will transfer to the machine intelligence of autonomous vehicles.

In this transition, mechanics will still be needed, although the reduction in vehicle numbers would imply fewer of them. There is, however, no direct equivalent to a driver in the new autonomous world.

Fears of unemployment in transportation thus appear well founded. Autonomous vehicles should prove cheaper to operate than having professional drivers who, like all humans, cost money to employ, sometimes become ill, and often resist working 24/7, even as independent contractors! Uber's Travis Kalanick spoke openly about the financial incentive to replace all his drivers with autonomous vehicles as far back as May 2014.

Worries about job losses in ancillary industries seem similarly realistic, given the singular profit motive of most business. With safer roads and fewer accidents, what happens to auto body shops? Will we still need car insurance and claims personnel? With driverless cars predicting mechanical failures, will we still need automobile clubs and roadside assistance? Driverless cars don't need licensed drivers, so some government workers can be eliminated, as the role of the DMV becomes less important. Mario Herger, examining the rapid roll-out of autonomous vehicle technology, suggests that the last person to get a new driving license has already been born.

As automation effectively addresses ever-wider swathes of work activity, suggestions that displaced workers will find new, yet to be conceived jobs in sufficient numbers ring hollow.

Thinking Ahead

Planning for the impact of technological displacement throughout the entire economy is only now being given some belated consideration. The World Economic Forum is among the latest bodies to offer guidance on the likely levels of unemployment and the industries and geographies to be most affected.

I have been writing on this topic since 2014 and again last year, and am relieved to see some recognition at last of the extent of the problem on the international political and economic front. However, much remains to be done to come to a viable and widely accepted solution that would enable current economic models to continue to operate in a situation where unemployment is the norm.

Although the direct and indirect impact of autonomous vehicles on employment would certainly seem to be significant, this is but one part of a wider set of social and economic issues raised by driverless cars. I'll therefore refocus on the immediate and direct implications of data creation and use in autonomous vehicles as I wrap up this series in Part 4.