The standard story is that traffic deaths will dwindle, cities will spread out magnificently, and you’ll all be reading MR on your morning commute rather than fighting the traffic. Maybe so, but what other options are at least worth considering, if only out of contrarian orneriness?:
1. Driverless cars are not actually much better than the really good German streetcar systems. Those come closer to door-to-door service than many people realize, and of course they have lower energy and congestion costs.
2. The need for exact mapping of streets will restrict driverless vehicles to well-known, well-trodden paths, much like bus lines. There is nothing wrong with that, but ultimately it won’t do more than save the cost of the bus driver. Or worse yet — some automobile lanes may be turned over to municipal driverless vehicles in a way which makes traffic problems worse. It will end up as a way to push cars out of the picture, without building up the broader mass transit network very much.
3. Driverless cars will give governments a chance to “redo” the whole driving side of American life. Is this so great? (Imagine if we had to write a new Constitution today.) Just think, with driverless cars and laissez-faire there will be so many car trips, a city might collapse under the weight of its own congestion. So a quantity-rationed system will be introduced, and ultimately all of driving will end up more controlled and more regulated, based on licenses in fact and no I don’t mean drivers’ licenses.
Most generally, your predictions for driverless cars should depend heavily upon: a) will there be rational congestion pricing?, and b) how rapidly will cities rezone to take advantage of the new opportunities? I am not sure we should be especially optimistic about either a) or b).
Or put it this way: the absence of congestion pricing in most major urban centers means we are already bad at running roads, for whatever public choice reasons. So maybe we’ll get a bad version of driverless cars too.
For a conversation related to this post I am indebted to Alex Tabarrok and also Joe Bous.