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Driverless cars will mean the end of mass car ownership

A Google illustration shows the company's vision for the self-driving cars of the future.
A Google illustration shows the company's vision for the self-driving cars of the future.
Google

Self-driving cars have the potential to reduce accident rates, make commuting less stressful, save energy, and put a lot of truck and taxi drivers out of work. But it could also have an even bigger consequence: ending personal car ownership altogether. And that would be a good thing.

Right now most middle-class people own cars, in part because only rich people can afford to take a taxi everywhere they go. Self-driving cars will flip the relative costs of ownership and renting upside down, leading to a world where renting cars is the affordable norm and owning cars is the pricey exception.

We take consumer car ownership for granted because it's how things have always worked. That blinds us to how profoundly wasteful it is. Not only do our cars spend 90 percent of their lives sitting unused in driveways or parking lots, but we've designed our cities around this wasteful practice, setting aside several parking spaces for every car.

We do things this way because the alternative — taking a taxi — is extremely expensive. And it's expensive because the human driver is a lot more expensive, on a per-hour basis, than the car is. Because the US is a high-wage country, it's cheaper to own a car that sits idle 23 hours per day than to hire a human driver for one hour every day.

But as Uber CEO Travis Kalanick pointed in a tweet last year, that's going to change once cars can drive themselves:

Renting a car instead of owning one has a lot of advantages. People will be spared the hassle of buying gas, changing the oil, and taking the car in for repairs. Both workers and their employers will be spared the expense of finding somewhere to park our vehicles.

Driverless taxis will improve average fuel economies too. The driverless taxi company will always be able to send exactly the right car for the job. If you're traveling alone, you'll be able to do it in a small one-seat vehicle that gets excellent gas miles. Urban trips can occur in ultra-efficient electric vehicles with a top speed of 30 or 40 miles per hour. And of course people who need full-sized, long-range vehicles for big group trips will still have the option to rent those too.

You might think the parents of young children would be an exception thanks to the need to install custom carseats for each trip. But in a market of mass car rental, that wouldn't actually be a serious problem. Any good-sized city has thousands of parents who need vehicles with carseats in them. A self-driving car company could easily outfit an appropriate percentage of their cars with these seats and charge a modest premium to use them. When junior outgrows one carseat, his parents can simply order a new car with a seat the next size larger.

Driverless car companies will have their own reasons to discourage car ownership. They'll likely be liable for any accidents, so they'll have a strong incentive to keep them in good shape and to retire them before safety problems start to occur. That will be a lot easier to do when they own the vehicles and rent them out by the hour.

The result won't just be that car-sharing becomes more common. The very idea of widespread car ownership will come to be seen as a relic of the 20th century.

Of course, not everyone will go along with the car rental trend. Owning and customizing cars are a hobby for many people, and some of them will insist on continuing to do so even as the costs of taxis plummet. Others may need self-driving trucks or vans to help carry equipment around for their jobs.

But most of us will do the economically rational thing: we'll ditch our cars, go everywhere in taxis, and wonder how people in the 20th century lived any other way.

WATCH: 'Will cars every drive themselves? (The Big Future, from The Verge)