Are We There Yet: What Happened to the Driverless Revolution?

SMITH BRAIN TRUST – A few years ago, it seemed like the driverless revolution was upon us. In a few short years, we were told, we wouldn’t need cars of our own. We’d simply summon driverless vehicles to take us from place to place.

Then, something happened, and it seemed like the whole dream was run off the road. That something, says Maryland Smith’s David Kirsch, was a hard dose of reality and an overdue tempering of expectations.

“What we’re seeing is the almost inevitable reaction to the over-optimistic expectations that had been heaped upon the autonomous vehicle sector,” says Kirsch, an associate professor at the University of Maryland’s Robert H. Smith School of Business. “There's still an enormous amount of energy and enthusiasm and optimism for the sector and for its overall prospects, but people are recognizing it's maybe harder than was initially presumed.”

It’s easy to see where driverless cars veered off of the path when the hype was building, Kirsch says. In 2019, first Lyft and then Uber riled up investors by betting big on self-driving taxis as they went public. Even Tesla’s Elon Musk was promising a million robo-taxis on the road by the end of 2020. An official count of Tesla robotaxis on Dec 31, 2020? Zero.

Delays in the technology’s development changed those plans. Uber recently shifted gears, selling its self-driving division to Aurora in a deal valued at roughly $4 billion – almost half of what it was said to be worth in 2019.

“At the time, Uber and Lyft needed a narrative that supported future growth and profitability in order to go public, and that meant a future of autonomous vehicles,” says Kirsch. “Ride-hailing, it turned out, wasn't really going to be a great business model, but if they could convince investors that the future is driverless, then they could be profitable. That talk got people excited and potentially enabled them to overlook some of the inherent weaknesses in their base business models.”

As for the road ahead for driverless cars, Kirsch believes it could follow the Hemingway Law of Motion: Change will happen gradually, and then suddenly.

Waymo, a Google subsidiary, is looking to be part of that change as it announced it is moving away from the “self-driving” concept and focusing more on “autonomy,” vehicles will dispense with the driver control altogether. It’s a move that opens the pathway for companies to experiment with autonomous vehicles in other environments and scenarios, Kirsch says.

Long haul trucking and local delivery are both potential proving grounds, he says. Highways, while dangerous because of speed, are also the most predictable environments, while local deliveries typically take place in low-speed zones. Even farmland could be useful in testing autonomous vehicles, he says.

“Farming offers a potential win-win for tech companies and farmers,” Kirsch says. “Companies can take advantage of reduced regulatory oversight and farmers can try out autonomous tractors.”

Regardless, a shaking out of the industry may be in order, Kirsch says, and there may very well be a future in which tech companies provide software and mechanical products to automobile manufacturers, in much the same way Intel provides parts to computer manufacturers. But that’s to be determined.

In the meantime, Kirsch says, people can still hold out hope for a future with driverless cars, just don’t expect that red light to turn green any time soon.

“The long and short of it is that autonomous vehicle technology is progressing, but uncertainties abound. We can’t yet see exactly how it's going to work or what it will look like,” Kirsch says. “I think it is safe to say, though, that the timeline has been pushed back.”