Jordan McGillis joins Brian C. Anderson to discuss autonomous vehicles’ potential to remake transportation.
Audio Transcript
Brian Anderson: Welcome back to the 10 Blocks podcast. This is Brian Anderson, the editor of City Journal. Joining me on the show today is Jordan McGillis. He’s City Journal’s economics editor and an adjunct fellow at the Global Taiwan Institute. Writes about energy, technology, economic progress, and geopolitics for City Journal. His work has also been published in The Wall Street Journal, Bloomberg, New York Post, and cited by the House Committee on Ways and Means and the Defense Department’s Journal of Indo-Pacific Affairs. Today, though, we’re going to discuss his extremely interesting new essay, “Accelerate Autonomy,” which appears in our winter issue and looks at autonomous vehicles’ potential to improve mobility in American communities, especially for the elderly. So Jordan, thanks very much for coming on 10 Blocks.
Jordan McGillis: Thanks, Brian, and thanks for that extraordinarily lengthy bio you just gave. What was so fun about this piece is that it was really personal and how I talked about my mother-in-law’s mother, so I really enjoyed writing this piece that was close to home.
Brian Anderson: Yeah, well, just to give some background for listeners, currently no fully autonomous vehicles are sold to the public, to consumers, yet AVs, driverless cars, they’ve logged now millions of road miles in the United States. So there are big tech companies like Google, but also General Motors, they’ve invested billions to develop these autonomous ride-hailing vehicles or autonomous vehicles generally. Some companies are already offering service in several major cities. I wonder, so just to give a breakdown, what’s the distinction between an AV and an electric vehicle, and how has the technology advanced in recent years, and how many cities are using these now?
Jordan McGillis: Okay, let’s start with that important distinction that does sometimes get blurred, the AVs versus EVs. It happens to be the case that most autonomous vehicles that are out on the roads these days are also electric, but they’re two distinct phenomena. The autonomous technology could just as easily affix to an internal-combustion-engine vehicle, but for various reasons, mainly around a combination of wanting to fit in with a progressive outlook and then also a more legitimate case around fleet vehicles being sensibly electric, those companies have chosen to use that technology. But the autonomous tech, like I said, you could put this onto any sort of car, and so we are seeing that in different contexts such as freight trucking, where there are companies that are running diesel trucks that are using autonomous technology to help navigate.
The lay of the land currently, at least in the United States, is that a company called Waymo is out in the lead, and Waymo is a Google spinoff. The company has close to, at this point, 20 years of history with Google building up its data on the roads and its technology around its sensors, and its what’s called the actuator, the part of this autonomous vehicle that takes in and then makes a decision based on the data that it’s picking up from its surroundings.
Waymo is offering rides in a few cities right now in the U.S. San Francisco and Phoenix are the two main cities. In Phoenix, Waymo recently began operating also on freeways for the first time, so a higher speed environment. They also have pilot programs running in Los Angeles and Austin. The other big company to know about is Cruise. Cruise is a GM subsidiary and Cruise has fallen on hard times because they’ve had a few technical mishaps and they’ve had some pretty bad human leadership that has unfortunately led to GM significantly reducing their budget for the upcoming year and an indefinite pause on Cruise’s driverless operation. But I’ll stress, Waymo is operating without drivers on board. These are truly autonomous vehicles. You are sitting in a car by yourself. I had a chance to ride in one of these in Los Angeles in the fall, and it is a truly spectacular experience, but it feels quite natural once that car gets rolling.
Brian Anderson: Wow. As you emphasize in the article, this is particularly significant for the elderly. So the nation’s elderly population is quickly expanding. I think the number of Americans 85 and up is going to be over 12 million over the course of the next decade. And as most people recognize, driving typically becomes riskier and in many cases impossible for elderly people because their reaction time goes down, they have eyesight problems, yet many older Americans are living in suburban areas where vehicles are really the only practical form of transportation, and this is true in a city like Los Angeles where getting around without a car is difficult. So how might these AVs alleviate this problem, and what potential do they have to improve elderly people’s quality of life, if so?
Jordan McGillis: Yes, this is a very interesting thread, among others, on the AV topic, and I think it’s one that hits close to home for City Journal’s conservative readership. We tend to be family-oriented and we think about how people can stay connected to their communities a bit more than progressives might. And I think this point about elderly people increasingly living in suburbs where they’ve made their homes for decades is one that can win over a lot of conservatives who are otherwise probably skeptical about this technology. And I think that’s why I chose to focus on that particular aspect of the AV discussion for this City journal piece, that it tugs on a certain conservative sensibility of keeping people connected to their families and their communities.
As you note, when people get older, they eventually will lose the faculty to operate a motor vehicle safely. When I looked at the data on this, which is largely gleaned from insurance companies, what you find is that through Americans’ decades of their sixties and their seventies, they continue to become safer drivers actually. It isn’t until around age 80 that you see an uptick in both collision risk and then injuries from those collisions. But in a person’s eighties, that really takes off and it approaches and then surpasses the risks that teen drivers display in terms of the collision risks and injuries.
But we’re living longer, and a lot more Americans in the coming decades will be living longer while in suburbia where they depend on cars. So those final couple of decades of life in one’s eighties and one’s nineties, like my wife’s grandmother, that’s the time when this autonomous technology being able to hail a ride that will cost less than a current taxi or less than a current Uber, being able to hail that ride and get to church, get to the grocery store, whatever it may be, becomes really valuable. And I would emphasize that I am not intending to force people out of their cars. What I want is for there to be another option for people to have increased mobility and connectivity with their communities, and I think that the autonomous vehicles can provide that, particularly as the costs continue to fall.
Brian Anderson: There is an obstacle here though. A recent poll showed that I think 70 percent of Americans are afraid of AVs, they’re not going to use them. The concern is escalating, and I believe that the concern is highest among the elderly. So they look at these things with a degree of anxiety that would make them unlikely to adopt the technology. And there has been, you alluded to one, a number of mishaps, one of which left a woman seriously injured. So what do you say to people who say, “Well, these things aren’t safe, they’re dangerous. I’m not going to get into some kind of a vehicle that’s controlled by a computer?”
Jordan McGillis: I think that as with most technologies, there’s going to be more of a tendency for openness to it as you look at people who are younger in the age distribution. So over time, despite the numbers that do show, as you say, a lot of hesitancy, over time, that hesitancy will naturally just fade away. I think the Baby Boomers will be more open to this technology than the silent generation who’s currently in old age, and I think that Gen X and the Millennials will be even more open to it. You see the adoption rates for things like human-driven Ubers and Lyfts showing that short of skew and just for technology in general, that’s how things break down. So naturally I think we’ll become more open to it over time, but I think the other thing is trying to somehow get more exposure to low-risk circumstances in which autonomous technology is operating.
One of those you’ll see in some cities or on college campuses these days is small autonomous delivery vehicles. These are like the size of a children’s wagon and they’ll be trundling through with a big antenna. They’re very friendly looking. Seeing those operate and navigate in rather congested pedestrian areas is a way for people to realize that this technology is quite impressive and has the capability to operate at a safety par with human beings, if not even more safe than human beings. And I think that as these sorts of things roll out, people will be less frightened because of the very obvious reason that they’re smaller and could inflict less damage. So getting exposure to the low-risk autonomous technology and then cohorts overturning will have the natural consequence of people being more open to it.
In terms of convincing people, I think that exposure point would be the one that I would emphasize, and that’s what Waymo is doing with these pilots in different cities. They’re going neighborhood by neighborhood and letting people see them in operation. They’re of course starting with human drivers on board. And the more we see these, the more we’ll take them for granted. And I do think in time the hesitancy will be overcome. Is there a reason for hesitancy? I certainly think that it’s reasonable to be very comfortable with the thing you’ve known your whole life and to be skeptical of something that is completely new. The statistics that have been accrued by Waymo in conjunction with some third parties such as the Swiss insurer, Swiss Re, those show that they are operating even safer than human beings. So the more we are able to see them in operation, the more statistics we have and the more low-stakes exposure we have, the more we’ll feel comfortable with it, I think.
Brian Anderson: Driverless cars are still mostly unregulated at the federal level. Congress has been holding hearings on AVs over the past decade, but it’s not passed any legislation guiding their deployment and production, at least that I know of. Several states though have offered different models for AV regulation. Texas and Arizona are, as one might expect, welcoming regulatory environments, as you note in your article, California’s government agencies have been sending mixed signals despite the fact that AVs are being used in California. So what in your view is the right approach to take from a regulatory standpoint, and is there anything that we can learn from these different models in different states at this point?
Jordan McGillis: It’s fascinating. This autonomous vehicle issue does break down across state lines exactly as you’d expect. California finds itself constrained by the political dynamics significantly influenced by the labor movement in the state. Texas and Arizona have a bit more of a Wild West approach to it, and that’s going to benefit those states in the sense that they’re going to be more attractive to companies that want to get a start somewhere. And the biggest difference is actually on the freight trucking. I talk about this in my 2023 Manhattan Institute Report. I don’t talk about it in the City Journal piece, which is focused of course on elderly mobility.
But on the freight trucking, Texas is far out in the lead of California and is going to have some routes that are open to autonomous trucks with freight on them this year, 2024, running between Dallas and Houston. Arizona similarly, very open to it. But in California, the legislature over the summer passed a law that would ban autonomous freight trucking until the 2030s. Thankfully, Governor Newsom vetoed that bill, but it has sent a really frightening signal to the industry and California’s just not open to particularly the freight side of things where the labor movement holds a lot of sway.
On the passenger side of things, the ride-hailing, California has the huge advantage of the tech industry being here and having a lot of people who are interested in being early adopters. And the California Department of Motor Vehicles, which effectively is the agency in charge of AVs, has been relatively open to it. And when they came down hard on Cruise last year, it was with merit. Cruise had this terrible incident in which one of their vehicles ran over a person who had already been struck by another car, but the Cruise vehicle ran over this person, stopped, and then proceeded to go another 20 feet to try to pull to the side of the road, not realizing that there was a person trapped underneath.
So a horrible, grisly incident. Thankfully, though the woman was terribly injured, she did survive, but Cruise withheld some of the video evidence evidently from the California DMV. So the fact that they ultimately rescinded Cruise’s ability to operate, you would have to judge as warranted based on what then came out about the cover-up. They’ve been fair with Waymo, however. Did not put a stop to the entire industry. And so California continues to be a leader on the passenger side of things. So we’ve got these differences at the state level. You mentioned the federal level. There is one really important thing I would love to see change from the federal government, and that is a either elimination of a certain protocol under the Federal Motor Vehicle Safety Standards, or at least a change to how it’s implemented.
But the Federal Motor Vehicle Safety Standards require that vehicles have all sorts of different safety mechanisms in place, many of which are irrelevant to autonomous vehicles, the most obvious example being something like a steering wheel or a rearview mirror. Autonomous vehicles not having a human to put hands on a wheel or not having a human to look in the rearview mirror means you don’t need to spend money putting those things into the vehicle. As it currently stands, companies are operating cars that basically look like normal cars but have the autonomous technology affixed to them.
The car I rode in in Los Angeles, as you sit in the backseat, you can watch the steering wheel move on its own, but that really wouldn’t need to be there in the future. And so if we could adjust these Federal Motor Vehicle Safety Standards to accommodate new designs, you could make autonomous vehicles that are more outfitted for the rider experience rather than outfitted for someone to sit in a driver’s seat. You can envision a future in which there are vehicles that have forward and rear-facing seats almost like a train compartment, but currently the Federal Motor Vehicle Safety Standards require effectively for seats to be facing the same direction and to have a steering wheel. So we need to overhaul how that aspect of vehicle production is regulated and let companies produce vehicles in a different way that can make the most of the technology.
Brian Anderson: A final question, Jordan. Despite the fact that they require a lot of upfront investment, billions we mentioned, AV, ride-hailing services anyway, have the potential to be quite profitable, as I imagine would the freight application of this technology. So what does the demand side look like right now? What kind of demand is there for these kinds of vehicle options, and how might their service become superior to that of, say, the current ride-sharing companies like Uber and Lyft, or I imagine they will be getting into this kind of technology and are already doing so?
Jordan McGillis: That is certainly the case. Uber had its own autonomous vehicle program in place. They ultimately scrapped it and basically are partnering with Waymo now and in the city of Phoenix, you can use your Uber app to get a Waymo vehicle. I don’t believe that’s the case yet in San Francisco. There is clearly interest in it, but what will make autonomous ride-hailing preferable to the ride-hailing that we’re all used to at this point is simply cost. The experience for the rider should be identical. That’s what we want. We want safe rides that feel no different from getting into the back seat of a taxi or an Uber. And the way that cost will come down is ultimately through the scale of the technology and then of course the elimination of the need to pay human drivers. So companies that are in the freight industry or in the ride-hailing industry, they see an enormous opportunity here to cut out what is perhaps their largest cost overall, which is the labor of the person driving the vehicle.
So as the technology improves and achieves scale, we’ll get to that cost parity point. And then for the rider, you’re going to be choosing among options. And if I can get a Waymo vehicle that costs me 20 cents less per mile than taking the Uber that doesn’t have the autonomous technology, I’m going to choose that lower cost option. And that’s the point that I try to make as often as possible. It’s Ubers, Lyfts, taxis, and freight trucks driven by humans. They’re all very safe. The distinction is going to be cost. That’s what’s going to make autonomous vehicles either work economically or not, is if they can compete on that point.
Right now, it’s just too early to really say. And Uber itself only recently has started to turn a profit, even with humans behind the wheel. So it’s still early days in ride-hailing generally, and I think the ultimate end game for a company like Uber has always been to try to do autonomous technology. Now they’re partnering with Waymo, as I mentioned, on the freight trucking side of things as well, cutting down on the labor cost. Getting people who have been driving trucks into different parts of the supply chain and maximizing their capability in the workforce is going to facilitate just an even greater logistical and freight industry success in the U.S. So I think that it all comes down to ultimately getting that cost below what it currently takes for a human to drive you around.
Brian Anderson: Thank you very much, Jordan. Don’t forget to check out Jordan McGillis’s work on the City Journal website. That’s at www.city-journal.org. We’ll link to his author page in the description. One of the pieces there will be this essay that we’ve been discussing, “Accelerate Autonomy,” which appears in our winter issue. You can also find Jordan on X, @jordanmcgillis, @jordanmcgillis. You can find City Journal on X as well. That’s @CityJournal. And on Instagram, @cityjournal_mi. As always, if you like what you’ve heard on the podcast, please give us a nice rating on iTunes. Jordan, thanks so much for coming on.
Jordan McGillis: My pleasure, Brian.
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