I just got done watching a very interesting documentary on Netflix called “Downloaded.” It’s a very interesting documentary about the development, the rise, and the fall of the now infamous peer-to-peer file discovery and sharing platform Napster. Regardless of your personal feelings on the topic of the ethical and legal issues surrounding Napster, you can’t argue that it has permanently changed the music industry. It opened the way for iTunes, Google Play, Spotify, and a host of music services that are now ingrained into the daily lives of even the most modest of tech users. It also opened the door for most sophisticated and larger peer-to-peer platforms like BitTorrent. To keep it short, even after “legal” victories against Napster by the RIAA, the music industry was forever changed and many will argue that the music industry missed the bus on capitalizing on this new technonology because they were too busy trying to kill it.
I won’t put all the blame on the music industry though, because frankly how could they have known? They weren’t tech people. They didn’t understand the technology. Decades of stagnation had seen the music industry completely remove itself from the research and development of new recording technologies. They were completely unprepared, when compounded by an unwillingness to change, led to the faltering music industry we have today. An industry where many bands can circumvent the industry at large and make livings directly connecting to their fans.
I’m getting off course here. What happened with Napster and the music industry is done, but we’re never done with the growing pains of innovation. That’s why it’s important for us to learn from these sort of events and apply them to current (movies and television) and upcoming (driverless cars) disruptive innovations. Which brings me to the topic that this post is actually focused on: the emergence of driverless cars.
My friend Ed posted his concerns regarding automated vehicles on Facebook a couple weeks and it triggered an interesting conversation. One of the points that people are legitimately concerned about is how automated vehicles will affect employment in driving fields such as public transportation, private transportation, and commercial shipping.
If history is any indication, there will be quite a few people in the next few decades that will lose their job as a truck driver. At this point it is completely unavoidable because you can’t un-invent the technology and it’s only a matter of time before people run out of excuses to keep it stifled. A certain amount of jobs will be created to support these automated vehicles, but unfortunately it’s not likely that it will replace all the jobs lost.
However… theoretically once this technology is in place the cost of almost everything in America should drop. Around 70% of all commercial goods in the United States are transported via trucks. That means that eventually 70% of all items shipped in the US should decrease as their production and shipping cost decreases.
Let’s use a car factory as an example. What many people fail to realize is a factory for cars is actually less a factory, and more simply a fancy place where things are put together. Individual parts are rarely produced onsite. Companies have found that for various reasons it’s cheaper to make pieces at a highly specialized mass production factory and then ship them to the main plant to be used in assembly. Off the dealership floor something as simple as your brakes and rotors could be comprised of pieces that were manufactured in multiple states or even countries.
Doing the math, that means that the cost of shipping raw material to manufacturing plants will be reduced. The cost of shipping the parts to the assembly plant will be reduced. The price of shipping the finished car to storage or dealerships will be reduced.
Why is the shipping cheaper in theory? Well, people driving trucks cross country is expensive. You have to pay their wage and benefits, you have to pay insurance, and then you have any other costs from legal liability, etc. Yes, there will be initial costs to develop, purchase, and roll out the new technology, but as you can see eventually the cost will pay for itself and savings will occur.
Here’s where we can really get into a lot of trouble. This offset in price should help aid those that are negatively affected by the shift to automated shipping. So while these unfortunate men and women drivers will eventually find it hard to get a job in the field, the cost of living should decrease for them. But what happens if corporations instead decide to eat up the savings as profit and not pass them along as savings to the public?
This is when we start to further develop the possibility of a permanent underclass. Whenever innovation streamlines or eases production at the cost of employment, there should also be a benefit to the common folk. Assembly lines help produce a cheaper car, factory food production makes bread cheap and easy for all families to purchase, etc.
The other important thing to keep in mind is that this is a growing and developing technology. All truckers won’t find themselves unemployed within five or even ten years. This will be a slow roll out and people should have years to prepare for the inevitable change. Another thought is we’re also assuming that these trucks will be fully automated, and I find that very hard to believe. I think it’s much more likely that we’ll see truck drivers become more like train conductors, overseeing the general operation and only taking control when precision or judgement is needed.
That’s all for now. Just had some thoughts and decided to share them.