– Interview with an expert –
 

Prof. Dr. Andreas Herrmann, University of St. Gallen, Switzerland

 
 

 

Autonomous driving promises to bring about huge changes for society, public policy and the wider economy, and is already creating a raft of challenges for policy-makers.

In a new book – Autonomous Driving: How the Driverless Revolution will Change the World – three experts set out to explore the implications of autonomous driving across a range of fields, from human driving behaviour to value chains in the car industry.

Billed as the first comprehensive scientific book on self-driving cars, the publication provides a detailed overview of the changes autonomous driving will bring, and maps out an ambitious agenda for the successful delivery of this driverless revolution.

We discuss the book with author Prof. Dr. Andreas Herrmann from the University of St. Gallen, who wrote it with colleague Walter Brenner and Audi’s Rupert Stadler.

 

The book’s title refers to the driverless revolution that will ‘Change the World’. How will this revolution develop?

 

For most people, the driverless revolution will begin with ‘robo-taxis’, says Herrmann. “Robo-taxis are about to enter the market in various cities. These vehicles operate in a limited space and on predefined routes.”

Much like existing ridesharing models, these robo-taxis will operate as a service, with “cities, railway companies or other investors” offering them within a city, and customers ordering via an app, says Herrmann. A traffic management center will also be involved, optimising the routes used by the automated vehicles.

As smarter cities develop, “we will see more and more cities offering these services. This will happen pretty fast, because people will see the benefits of these vehicles,” he says, pointing out that it will then be important for cities to connect up different modes of transportation, such as linking autonomous taxis and trains.

Self-driving cars will also influence the architecture of cities, says Herrmann – in particular, the space dedicated to parking. “The amount of space needed for parking and the amount of streets can be reduced,” he says, citing research from Boston showing that parking lots can be reduced by as much as 30%. Similarly, on-street parking could be cut by as much as 20%, as vehicle connectivity reduces circulation in inner cities.

 

When do you expect to see self-driving cars taking to the roads en masse – and in what capacity?

“We see robo-taxis already in the streets and we will see many more within the next five years,” predicts Herrmann. Looking ahead, “autonomous multi-purpose cars will enter the streets by 2030”, depending on investments in infrastructure and in areas such as real-life mapping.

However, he notes, policy-makers will then face what is likely to be a particularly contentious issue. “We will need governmental intervention to eliminate traditional cars, because mixed traffic is difficult and costly to organize”.

 

“We will need governmental intervention to eliminate traditional cars, because mixed traffic is difficult and costly to organize.”

 


You explore how autonomous driving technology will affect the economy, politics, and society. What are some of the most significant changes?

“Driverless cars will reduce the social costs of driving significantly,” says Herrmann, pointing to areas like injury compensation and the lower fuel consumption brought about by smoother driving.

But the money saved should be used for a specific purpose, he suggests – infrastructure that enables driverless driving. “If the mobility of a population increases, welfare, income increases and unemployment goes down – this is important for the mega cities. The cycle should end up with a positive effect for society.”

 

What steps should political leaders take to ensure the successful delivery of autonomous driving?

The success of autonomous driving will require a number of things, says Herrmann. To start with, politicians must provide “a solid legal framework for bringing driverless cars into the streets”.

Leaders also have a part to play in helping to standardise vehicle-to-vehicle and vehicle-to-infrastructure communications between different countries – a key criteria for the connectivity of autonomous vehicles.

 

 
 

“The technology of autonomous driving lowers all existing entry barriers, because the established players are about to lose their competitive advantage”

 

Additionally, to facilitate the transformation from human-driven to autonomous cars, Herrmann believes politicians will need to invest in the necessary infrastructure to aid the rollout of autonomous vehicles, such as dedicated lanes for driverless cars.

And, as the car industry evolves to see traditional carmakers joined by tech companies, Herrmann suggests that political leaders should “invite the new software companies to come in and create the new auto industry.”

You look at the economic opportunities emerging from autonomous driving. Who are the likely winners and losers?

The advent of driverless cars promises to upend today’s industry structure, says Herrmann. “The traditional manufacturing nations are Germany, the US (Michigan, Illinois, Ohio), France, GB, Japan.”

But this is beginning to change. “What we see is that e.g. the cybersecurity industry is in Israel, that Singapore is the most developed lab for driverless cars,” he says. At the same time, he notes, Finland, Taiwan and Switzerland are all becoming hubs for industry software development.

 
 The arrival of self-driving cars will influence the architecture of cities, notes Herrmann.

The arrival of self-driving cars will influence the architecture of cities, notes Herrmann.



What challenges do car manufacturers face as they develop self-driving cars?

“The dominant players have developed very effective routines to dominate the market,” says Herrmann – making it almost impossible for newcomers to enter.

Yet, he says, “the technology of autonomous driving lowers all existing entry barriers, because the established players are about to lose their competitive advantage. That’s why we see many tech companies entering the arena.”

This increased competition will mean a battle for a piece of the value chain. “It is pretty obvious that the processing unit, the algorithms, the software are the most valuable pieces.”

Ultimately, however complex the changes brought about by the driverless revolution, Herrmann is looking forward to the arrival of self-driving cars. After all, he says, driving today is, most of the time, a “troublesome” activity.


 

About the expert

Prof. Dr. Andreas Herrmann, Director of the Center for Customer Insight, University of St Gallen

Prof. Dr. Andreas Herrmann is Director of the Center for Customer Insight at the University of St Gallen. He has acted as a consultant to Audi, Mercedes, BMW, Volkswagen, Deutsche Bahn, Deutsche Bank, Roche, Porsche, RWE, Credit Suisse, and many other companies. Prof Herrmann has published 15 books and more than 250 journal articles.

 

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