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Tuesday, July 9, 2013

The Money Side of Driverless Cars

In Washington, an average of six parking tickets are issued every minute of a normal workday. That is about 5,300 tickets on each of those days. Those slips of paper have added up to $80 million in parking fines a year, according to a report by AAA Mid-Atlantic.

As I noted in my Disruptions column this week, ”How Driverless Cars Could Reshape Cities,” the parking ticket could vanish from the future city as cars park themselves and refill parking meters electronically. (If there even are meters in the future.)

This has municipalities concerned.

“Automation is challenging all sorts of traditional revenue sources for cities and states,” said Bryant Walker Smith, a fellow at the Center for Internet and Society at Stanford Law School and a fellow of the Center for Automotive Research at Stanford. “It’s challenging how states and federal agencies get their funds, and parking fees are clearly challenges that could be in the future.”

Mr. Walker Smith said that while traditional revenue sources from tickets, towing cars and gasoline taxes could dry up, cities and states will come up with new ways to make money on vehicles.

Of course cities probably wouldn’t be alone in losing revenue because of driverless cars.

According to the National Highway Traffic Safety Administration, 93 percent of all traffic accidents result from human error. If cars are smart enough to avoid accidents â€" and many researchers working on these cars believe they will be â€" the multibillion-dollar car insurance industry could completely change and be reimagined.

Then there are the workers that could lose a paycheck to automated cars. Taxi drivers, delivery trucks, parking enforcers, bus drivers and a long list of other people who drive cars for a living could find themselves out of a job, replaced by a computer chip and an algorithm.

When I spoke with Lawrence H. Summers, the economist, former Treasury secretary and former Harvard president, last year about these jobs possibly vanishing, he insisted that the decline in certain vocations would lead to a rise in jobs in new industries.

Mr. Summers likened the rise in autonomous vehicles and robots to the Industrial Revolution, which gave way to new types of jobs in the arts, manufacturing, technology and elsewhere. ”In reality, if people are freed up from one thing they are able to do something different,” he said.

Let’s hope Mr. Summers is right. And that the researchers who say the parking ticket could soon be a thing of the past are accurate with their prediction, too.