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Driver-less cars. I think this answer is pretty obvious, but it will take tremendous execution and luck to profit from these trends, since they are so broad and require so many supporting innovations. This is a simplistic answer, because the underlying trends and advances interweave in such complex ways that I'm only picking a few key (and easily predictable) mountaintops.I'm going to spend a lot of words below to convince you that no matter what you've thought about this, the effects are far greater than you think. This will change the face of society as significantly as the introduction of automobiles. This isn't just you being able to read a paper in the car on the way to work. There are multiple higher-order effects.Before I do, I need to define the term information horizon. This concept will be the most dominant reason why driver-less vehicles will change society, and enable traffic densities 10x of current capacities, which I think most experts would consider ridiculous. Information Horizon in this context means the visibility/range/extent of information a decision maker/algorithm has to predict the future environment and choose a responsive action.In the context of driving, the information horizon is how far, in space and time, one can see, and therefore react to, road conditions, obstructions, and alternatives. Today, in space that horizon is typically (95% of the time? 99%?) 1–3 car lengths in any direction. Depending on speed, that can vary in time between 30 seconds and 1 second.I expand on this at the bottom, but in the interest of getting to the social/economic impact of self-driving vehicles, here’s the TL;DR: future traffic will actually speed up when encountering an obstruction that constricts but does not block flow (accidents, construction, etc). This is because driver-less vehicles extend the information horizon of second-to-second driving decisions (“tactical” or real-time decisions) by hundreds of seconds and car lengths. In turn, this means that while vehicle traffic today acts like supersonic fluid flows, forming shock-waves at (inevitable) obstructions, future traffic behavior will fundamentally change, acting more like sub-sonic flows which maintain. In addition, even without static constrictions, the increased horizon will allow large-scale flow optimizations (to handle dynamic “constrictions” like heavy volume) that require short-term, highly distributed actions across thousands of vehicles.I believe the change in information horizon will be the dominant behavior effect of driver-less cars, giving anywhere from 3–6x increase in traffic volume/efficiency possible on existing infrastructure. This will combine with effects others have anticipated to yield a 10x improvement: decreased distances between vehicles at speed and congestion, due to faster response times and more consistent response; higher safe speeds for the same reasons; fewer accidents as a result; comfort with increasing speeds in construction zones, because workers will be secure in knowing a vehicle passing at 80 mph three feet away won’t swerve because the driver received a text or spilled coffee; and so on.OK, so understanding the fundamentals of how traffic flow will change, these are the social/economic impacts:Self-driving cars that reliably (ie legally and economically practical) maneuver and can go find their own parking spot. Drop in accidents? More productive transit time? The ability to work your transit time into your paid/productive workday, like some train or ferry riders do today.Transition to NETWORK SUBSCRIPTION MODEL of ownership. Why worry about parking or maintenance when the car can come pick you up? Uber on steroids, some (un)holy combination of cell phone subscriptions, Uber/Lyft/ZipCar, rental cars, and cab companies. The majority of households will cease to buy cars, instead buying a monthly subscription with all the old trappings of cell phones: peak minutes, nation-wide plans, service quality and availability. Instead of the discrete options of mass-transit, car-pooling, and individual transport, a continuous spectrum of options will appear.Multi-modal transportation. For a long time, I thought mass transit was the future. Cars just don't scale—or rather, human-operated vehicles with a the limited human information horizon discussed above. When I realized that driver-less cars radically increase the information horizon, I started to think that mass-transit would become an albatross around municipalities' necks--why take the train when you can take a car door to door? But of course, physics, throughput, and latency matter. Now I realize, based on 2. above, that the two will create a highly synergistic, multi-modal combination.Imagine the old 1950's model of the car to the train, but then a car on the other side taking you to work.Or a car to the airport to the train to a car.With absolutely minimal waits--you step to the curb at the airport and the car is pulling up like a cab, or the car is timed to get you to the train station within 5 minutes of departure.Complete reorganization of the transportation sector. Explore the implications of 2. and 3. above. All of the below is dependent on whether vertically or horizontally integrated markets appear, which I think is a toss up right now.For automakers, there are two countervailing effects, I don't know which will dominate. Personal vehicles today spend 80-90% of the time parked. What happens when they're rented vs owned? With 10–20 people sharing a vehicle over the course of a day, that means an order of magnitude lower demand for vehicles. However, that car will be in near-constant use. A parked car loses revenue for the operator--not only is it losing rental fees, but it has to pay for the real estate to park the vehicle and the capital costs of owning the vehicle. What happens when cars drive 50-100K miles/yr? Vehicles will have a much shorter lifespan, or they will have to built and maintained quite differently.For dealers, repair shops, gas stations, etc, likely game over for the vast majority. This is huge—auto dealers are cornerstones of local chambers of commerce and many municipal economies. The trend will be massive service centralization.Large car rental companies will likely buy their own vehicles directly from manufacturers; at best there will be market space for a very few intermediaries or purchase agents. The consolidation will look a lot like the travel agent industry at the beginning of web commerce.For repair shops, just look to airlines, buses, trains, or taxi-cabs. Most repair will likely be brought in-house and made extremely methodical, in an effort to eke out maximum revenue from a vehicle, while maintaining customer quality guarantees. It is possible a few 3rd party intermediary companies will appear or survive that market to all the companies. That will be highly dependent on local market circumstances, or government regulations.As for gas stations (or electric recharge stations?), I have no idea what will happen. I would assume operators will want to refuel at their own depots, but that depends on geographic coverage. Maybe outside dense, urban areas room will remain for 3rd party stations. I imagine inter-city transport will remain significant, with requisite refueling needs. Imagine chilling out with your family in a minivan playing games while the vehicle drives you from NYC to Boston, or Dallas to Houston.For cab companies, rental agencies, bus companies, and ride-sharing efforts, the results are obvious: a clear collision and merger of market segments.For trains and airlines, anyone's guess. Airlines (and/or airports?) are likely unaffected directly, simply needing to establish new commercial partnerships. Trains (light rail, etc) would be quite different if they were not all monopolies of one kind or another. Given they're not real commercial entities, they will likely act like the airlines; if they were, I could see Verizon/AT&T-like legal efforts (circa 1996 Telecommunications Act) to prevent, then co-opt competition.For Municipalities I: a fundamental reordering of transportation efforts. Major revenue sources like parking meters, parking/speeding tickets, etc will be gone. On the other hand, those car companies will need places to park vehicles during off-peak periods. Tolls, congestion pricing, various fees akin to your rental car contract or cell-phone subscription will likely substitute. For cities like NYC, cars could become a significant competitor to the Subway unless congestion pricing is put in place to at least force car-pooling. On the other hand, the simple cost of moving vehicles back out to the suburbs empty to pick up the next passenger might be sufficient to make driving into down-town cost prohibitive during rush hour.For Municipalities II: the curse of modern transportation has been traffic congestion . What happens when the information horizon of a vehicle operator expands an order of magnitude in range and consistency? Our current infrastructure will be able to support 5-10x more capacity. That means less construction, less environmental and economic impact, and less drain on various government highway budgets, although at the cost of stimulus. Today, more than 20-30% (rough guess) of theoretical capacity on a road means traffic jams. For decent speeds, 2-4 car lengths are required between each vehicle, and the safety implications of even that are ugly. But driver-less cars mean:safe, high-speed distances of a few feet;the capacity to communicate speed changes 10's or 100's of car lengths in milliseconds, allowing a long, high-speed stack of cars to slow/stop/speed-up nearly simultaneously;the sudden ability of information to propogate FORWARD in addition to backwards, allowing vehicles in front of a bottle-neck to speed up to assist in mitigating impact;…and the list goes on. Combine this with rented vehicles--the network has between 10-30 minutes warning on new vehicles joining the flow, as a nearby vehicle first transits to pickup, then takes the passenger(s) to destination.For municipalities III: dramatic changes in local roads.Automated vehicles mean no need for stop-lights; cars can negotiate over the shared real-estate of intersections.Factors in favor of round-abouts are likely to become even more dominant.Usable road surface and resulting vehicle thru-put (regardless of higher-order effects like information horizon or absence of stop-lights) will increase by 2–4x. Currently single- or two-lane roads with parallel parking on either side will become 3–4 lane thorough-fares, possibly with express/bus lanes carved out of one of those lanes (though this is less necessary with car-to-car right-of-way negotiation).Speed of traffic is likely to dramatically increase even as pedestrian safety improves, if only because the increased information horizon discussed above allows more efficient traffic flow and fewer stop and goes.For Teamsters and couriers (delivery, courier, and disposal companies). I don't know how the industry changes for FedEx/UPS or your intra-day courier, but it clearly does. The opposite applies too--no need for garbage truck operators. What happens to the economics of these industries when drivers are not required? How do you handle the curb-to-door gap (is there a Segway in the house?)? What about the gap between ground shipping and overnight air.? See the next item for more.Trucking and cargo-rail: a fundamental reordering of capacity, throughput, and costs. What prevents truck "trains?" Today it is safety and driver preferences. What happens when operators can place multiple tractor trailers in serial, each with it's own computer operator, steering, and braking? They may or may not be connected, depending on the engineering. I could see a "train" of physically separate vehicles, supervised by a single operator/engineer/trucker for legal reasons, each separately powered. Or maybe the engineering favors centralized power generation/storage, with electric cables between trailers, each trailer with its own axle motors. Or finally, but unlikely given the difference between roads and rail, something very analogous to trains today, with central motorization but local braking. Whatever the result, the effects will be felt in both cargo and passenger transport. Imagine NJ Transit operating bus trains into NYC. Or Wal-Mart using the same to more efficiently stock its stores. Or FedEx/Amazon to provide cheap over-night delivery at distances < 300 miles. This will likely drive traditional rail operators to long-distance, double-stacked, very high-throughput lines of operation (more of the same), or to high-speed rail for quick high-throughput delivery at > 300 miles (> 4-5 hrs at 60-80 mph)For auto insurance companies: how do you make money when human drivers aren't causing accidents? Or when operators are large enough they can self-insure for repairs? Never fear, they will find a way. No matter what, no technology is perfect. Liability will still be necessary, although the market dynamics will change dramatically. Early on, while the liability case law is still ambiguous and the software new (and therefore risky, regardless of the testing/QA regimen), insurers will provide critical lubrication to enabling rapid and large-scale adoption.Still more municipal implications. In rapidly growing cities like Austin, our suburban lifestyle is the despair of planners. They simply can't meet transportation demand. One planner said of Austin something like: "if we continue to grow like we have over the last 30 years, our simulations have shown that no amount of construction can meet the need. Instead, 40% of Austinites will need to leave their ill-country homes and move closer to work." But that statement's assumptions are false. Meanwhile, what about all that real-estate dedicated to parking? Well, some will be sold to the vehicle operators for buffering, but the overall need for parking will go down dramatically. A lot more parks, and a lot more development, with highly connected real-estate developers profiting.Homes. What happens to all those suburban garages? I imagine some will get rented to these new vehicle subscription companies for cheap localized parking until they build up their depot/parking network. Others will get converted to utility/storage rooms. Still others will become apartments, increasing housing availability and decreasing rental costs.Malls and retailers. Brick and mortar store retailers are at least somewhat in the real-estate market, either directly or through rents to landlords. Landlords "waste" 2/3 of their product on parking; just look at any mall. What happens when they realize customers don't need the parking anymore? High-end condos (or more stores), here we come!"They'll pry the steering wheel from my cold, dead hands." Don't count on it. Manually operated cars will cost municipalities, companies, and your fellow citizens dearly, and they'll pass the bill to you. In short, the entire infrastructure that makes private car ownership and manual operation by the middle class will disappear:As discussed, parking will disappear, causing you significant inconvenience.Your presence on the road will dramatically affect throughput and safety, annoying and costing others.Municipalities will need to maintain stop lights for you (and only you).Repair shops and gas stations will disappear, making you feel like a diesel or battery car owner, and the few that will service you will charge you an arm and a leg after long waits.Auto manufacturers will charge far more per vehicle to make up for decreased volume and the new market demand for still higher reliability.JOBS!!! Truckers, delivery-men, garbagemen, cab-drivers, bus-drivers...This will be a significant disruption economically and socially. Many of last good middle-class jobs, others are decent entries into the economy. Those are not easily portable skills.CULTURE IMPACT. Driving vehicles is maybe the last autonomous activity with life-and-death responsibility, whether consciously acknowledged or not, engaged in daily by a large fraction of the population. I have no idea what the impact of losing this freedom and personal responsibility will mean overall to our society, but it will happen fast.————————————————“Physics” of traffic flow and the Information Horizon:I’m sure I plagiarized/corrupted this concept from somewhere, but I haven’t seen it discussed relative to driver-less vehicles. The information horizon can extend or shrink either dependently or independently in each spatial or temporal dimension, where shrinking means less information and more uncertainty. This in turn means less opportunity for optimization, and more wastage/inefficiency. Pretty basic and intuitive, well understood under different names in many fields.The driving/traffic information horizon can expand dramatically in space or time. On an empty, straight road, the time horizon can extend out minutes, with maybe not a single car in sight. Cresting a hill or a curve, it is often possible to see traffic conditions for many car lengths and minutes in front. Driving a large truck may allow one to see multiple vehicles (at the cost of reducing the horizon of neighbor drivers). Recent innovations in real-time traffic reporting and display on mobile devices have allowed drivers to extend their “long-term” or “strategic” horizon to miles and significant fractions of an hour. That may allow choosing more optimal routes or at least anticipating a slow-down, but is little help in making realtime, “tactical” driving decisions. Generally, the driving information horizon is a few car lengths and a few seconds, and this is what dominates the emergent behavior of vehicle traffic.For sake of illustration, I’ll draw an analogy to fluid flow. It also has an information horizon when flowing through a constriction. I’m playing fast and lose with the physics here, especially cause and effect, so anyone more educated than me, feel free to correct/formalize. But I think the description of the emergent behavior is generally intuitive and applicable.Sub-sonic flows speed up as they flow through a constriction ( Bernoulli's principle - Wikipedia, causing a drop in pressure — Venturi effect - Wikipedia); supersonic flows establish a shock-wave. In sub-sonic flows, information (sound/pressure waves) is able to radiate out from the constriction, changing the behavior of the flow—specifically, causing molecules to speed up to maintain mass flow, through an interplay of flow-rate, kinetic energy, pressure and density to maintain conservation of energy.Any driver would recognize fluid shock-waves at a constriction: it’s called a traffic jam. Intuitively, super-sonic flows “choke” because information can’t radiate fast enough to sufficiently alter the behavior of the medium. The shockwave may cause fluid density to increase, resulting in a little more flow through the constriction, but that can’t overcome the dominant effect of the molecules slowing down when they should be speeding up. Manually driven vehicle traffic acts like supersonic fluid.Driver-less vehicles will dramatically increase the “tactical” information horizon of each vehicle by hundreds of seconds and car-lengths:cars miles in front or behind will be able to speed up and slow down to sustain traffic flow in-between, regardless of constrictions such as construction, curves, psychological barriers (narrow lanes, lack of shoulders, etc), or temporary/localized low-safe-speed conditions (pot-holes, debris, …).vehicles packed within inches of each other for tens of car lengths across multiple lanes will be able to adapt at highway entrances across all lanes equitably to accept new vehicles, using information from broadcast intended routes minutes before vehicles enter the traffic stream, eg when a vehicle departs a home.vehicles will be able to transit intersections at high speeds without traffic lights, speeding up and slowing down to time their transit of an intersection to deconflict with other vehicles. This is a scheduling problem. Where batch processing provides greatest throughput, vehicles will cluster automatically to produce behavior similar to traffic lights today.road shoulders will be usable for temporary bypass or expansion, because lack of obstruction will be verifiable from downstream vehicles.vehicles will be able to negotiate safe tail-gate distance based on latest safety inspections and road conditions, which will be radically reduced by the ability to respond within milliseconds to a change in velocity hundreds of car-lengths in front.Again, it should be understood that the analogy to fluid flow physics is just that. Bernoulli’s principle is based on conservation of energy within the system, and many forms depend on essentially in-compressible fluids (liquids, gases at low speeds). Vehicle traffic corresponds to more complex forms in which density does increase (bumper-to-bumber traffic, accordion traffic), and more importantly seeks to conserve flow, thru-put, or average speed. Fluid molecules are driven by pressure differences to sustain F=ma, while vehicle decisions are driven by decisions algorithms seeking to sustain forward movement. But although the motivating specifics are quite different, abstractly both seem to be information systems in which the speed and accessibility of information flow as a ratio to medium/volume flow, combined with the capacity of the individual members to respond to that information, controls the emergent behavior of the system.