If autonomous vehicles strictly adhere to posted speed limits and parking restrictions, what...

If autonomous vehicles strictly adhere to posted speed limits and parking restrictions, what impact will the reduction in traffic and parking fines have on governmental budgets?

Photo: Automotive Fleet

Publicly held corporations include risk factors in their annual reports that forecast potential market forces that may impact their business in the future. Recently, four companies — three insurance companies and an auto-parts supplier — cited the emergence of autonomous vehicles as potentially disruptive to their future business.

This is the first time autonomous vehicles have ever been cited by companies in an annual report as a disruptive market force.

The three insurance companies — Travelers, Mercury General Corp., and Cincinnati Financial Corp. — anticipate a decrease in accidents that occur due to driver error, which may decrease future consumer demand for auto insurance products. Similarly, auto-parts supplier LKQ Corporation said its business will be impacted if the volume of accident repairs declines due to fewer accidents.

These reports got me thinking: What impact would autonomous vehicles have on the fleet market?

Benefits of Autonomous Vehicles

Many of the newer vehicles on the road today are, in reality, semi-autonomous vehicles, capable of performing actions independent of the driver, such as adaptive cruise control, collision avoidance braking, parking assist, and lane assist and lane departure warnings. These driver-assist technologies, coupled with advances in vehicle connectivity and vehicle-to-vehicle and vehicle-to-infrastructure communication, are the necessary precursors, or building blocks, to developing a fully autonomous vehicle.

In many ways, autonomous vehicles will be very beneficial to the fleet industry in a variety of applications.

For instance:

Fewer Accidents

On average, 20 percent of a fleet’s vehicles are involved annually in an accident. If autonomous vehicles reduce the frequency of accidents, this will represent substantial savings for fleets. The focus of autonomous vehicle design will be to avoid crashes in the first place as opposed to today’s philosophy of designing vehicles that allow occupants to survive a crash.

The early fleet adopters of autonomous vehicles will most likely be companies with ingrained safety cultures that have strong senior management support. However, autonomous vehicles, due to their reduced frequency of accidents, could be disruptive to other companies providing services to the vehicle accident market, such as the healthcare industry, legal profession, auto insurers, replacement parts industry, and vehicle rental replacement business.

Enhanced Driver Productivity

Autonomous vehicles will allow drivers to spend less time driving a vehicle, allowing more time to completing other tasks while in transit or commuting. Some studies predict that "wasted commute time" could be reduced by as much as 90 percent. Will this create a new aftermarket of productivity tools or driver amenities to be used during currently non-productive commute travel?

Here’s another example of how autonomous vehicles can enhance driver productivity. Currently, several OEMs offer automated parking assist capabilities for certain models, which involve no driver interaction with the vehicle. It’s not too much of a stretch to predict this could be a precursor to a more sophisticated "autonomous valet parking" capability to enhance driver productivity and time management.

Theoretically, using this envisioned technology, a driver could disembark at a destination and electronically dispatch the vehicle to autonomously locate a nearby parking structure or available street parking. It would be an interesting exercise to calculate the amount of unproductive time drivers devote annually to finding parking spaces, especially in a congested urban setting.

Maximized Vehicle Utilization

Autonomous vehicles could potentially modify the current fleet business model of assigning a specific company vehicle to a specific driver. Theatrically, one autonomous vehicle could service multiple drivers and could eliminate the need for driver-assigned company vehicles. Based on anecdotal discussions, it would be safe to say a company vehicle spends, on average, at least 50 percent of the work day idle and non-productive waiting for the driver to return. Instead of sitting idle, couldn’t a sophisticated fleet-based routing system allow a single autonomous vehicle to serve multiple nearby employees, thereby maximizing vehicle utilization to levels undreamed today?

Early Adoption by Specialized Fleet Applications

Fleet has always been an early adopter of new technology and autonomous vehicles will be no exception, especially with in specialized fleet applications. In some delivery applications, companies only need to get a payload from Point A to Point B, which is repeated on a daily basis, with onsite personnel handling the loading and unloading of materials, which would be an ideal use of autonomous vehicles.

Other potential early adopters could be the mining industry and shuttle services on corporate or university campuses where vehicles have limited variability in their driving patterns, or, where there are set routes, such as municipal transit agencies.

Maximize Fuel Efficiency via More Efficient Routing

Autonomous vehicles using vehicle-to-vehicle and vehicle-to-infrastructure communication will avoid traffic congestion or road construction by rerouting itself to take the most efficient route to a destination. The same would be true for delivery and service applications.

Disruptive Aspects of Autonomous Vehicles

Higher Acquisition Cost

One thing is certain, autonomous vehicles will be more expensive than the traditional driver-operated vehicle. Another big unknown is the impact on total cost of ownership. As cited earlier, it is anticipated that fuel economy will increase, maintenance and repair costs will decrease, but there is uncertainty about the rate of depreciation and the ultimate impact on residual values.

Will Companies Need Fleets or Simply Pay for Usage?

Could the future portend daily rental companies operating fleets of autonomous vehicles that can be summoned as needed using an Uber-style reservation system, with corporations simply paying for actual usage, eliminating vehicle depreciation expense, which is currently fleet's No. 1 cost category. In the long-term, could fleet management companies evolve into ultra-sophisticated "vehicle dispatch companies," providing units to clients on a precise as-needed basis?

Unintended Consequences

If autonomous vehicles strictly adhere to posted speed limits and parking restrictions, what impact will the reduction in traffic and parking fines have on governmental budgets? If autonomous driving becomes widespread, it is certain that DUI arrests will plummet and road-rage incidents will become an antiquated concept from yesteryear.Will MVRs even be necessary in the future?

The Long Arm of Governmental Regulation

Will governmental regulators, such as NHTSA, constrain or liberate the use of autonomous vehicles? Although NHTSA has expressed support for enhanced vehicle connectivity for vehicle-to-vehicle and vehicle-to-infrastructure communication, it remains unknown how willing it will be to embrace advancing autonomous technologies by inhibiting their adoption and application.

I am confident that the topics discussed in this editorial just scratch the surface and, as they say, the devil will be discovered in the details. What did I miss?

Welcome to the brave new world of fleet management.

Let me know what you think.

Mike Antich
[email protected]

About the author
Mike Antich

Mike Antich

Former Editor and Associate Publisher

Mike Antich covered fleet management and remarketing for more than 20 years and was inducted into the Fleet Hall of Fame in 2010 and the Global Fleet of Hal in 2022. He also won the Industry Icon Award, presented jointly by the IARA and NAAA industry associations.

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