Are self-driving cars really all that?

The self-driving car holds much promise. But it might not be taking you to any destination just yet.

The self-driving car has been invented, but is it likely to be widely adopted by as a mode of transport? Will we really buy self-driving cars? Or will we hire them like taxis, or even hop on and off them (or in and out of them) like buses? What would have to change in the way we live our everyday lives in order for us to adopt this strange interloper? And what sort of other things and services might we need to support travelling around in driverless cars?

Some of these questions go so far into the future that we can't possibly know the answers. So let's start with what we do know, and that is, perhaps surprisingly, the technology behind a self-driving car.

The concept of the self-driving (or, more alarmingly put, the driverless car) relies on the clever assembly of many existing technologies. There are several versions of the driverless car in existence, so let's focus on one of them. Google's car is perhaps the most widely covered. Developed through their long collaboration with Stanford University, it cleverly combines a raft of technologies that most of us, in one way and another, are fairly familiar with.

The car uses data gathered from Google Street View with artificial intelligence software, inputs from video cameras installed inside the car, a light detecting and ranging sensor (LIDAR) on the roof, a radar sensor on the front and positioning sensors on the rear wheels. Interestingly, the self-driving car looks suspiciously similar to any other car (only with a few extra gadgets). This is likely to change as the physical constraints presented by these technologies are overcome by the skills of designers that reconfigure interior car spaces as meeting rooms, cafes or perhaps even playrooms.

Not only does the current Google car look very similar to any other Toyota Prius, but the idea is that it actually behaves like one too. Making use of our existing infrastructure, roads, parking facilities, fuel and service stations, the car is designed to replicate the capabilities of human drivers - without human input.

This could be all for the good, and bodes well for its early adoption. Research shows products that fit in to our everyday ways of doing things are much more likely to be adopted. We need little convincing of this when we consider how Apple introduced a tiny computer into our pockets where a mobile phone used to be.

We took to the iPhone like ducks to water because it fitted in with how we were already trying to live (emails on the move, taking and sharing photographs, synchronised and shared diaries and so on). Will the self-driving car be such a welcome fit? As a society we remain much in love with the car, despite persistent efforts to persuade us to make more frequent use of public transport. With a car we can simply jump in and go wherever we want, whenever we want, with no prior arrangement or planning. This flexibility and convenience is what makes us love our cars and if the driverless car can offer this then perhaps it's in with a shout.

The logic behind the driverless car is also most appealing. By relying on technologies we can tame or even eliminate the human error that lies behind so many horrific road traffic accidents. But change begets change.

If we remove drivers, what else might we surreptitiously lose, gain or need, to make our new automobile system work as well as or better than our existing one? We might lose the need for driving tests. So we may lose the structure which provides both education about rules of the road and the framework for developing the capabilities and knowledge that underpin licensing and traffic regulation requirements.

And what is missing? If we break down now, we call the breakdown services and they come and fix our car by the roadside. When a driverless car malfunctions and takes us somewhere we don't want to go, or stops on the highway and won't move, what kind of breakdown service will we need to rescue us? With the increased sophistication of the technologies of driverless vehicles we will need to access different kinds of services to keep us all motoring.

Similarly, as the sophistication of the technologies increases, will the price increase too? This matters because it affects how the market unfolds. If prices turn out to be prohibitive for mass market consumption, then it is likely to be only the wealthy, businesses (maybe taxi firms, or other public transport providers), or even governments, that first adopt these technologies.

Even with government support and intervention there is no guarantee of success. Take the French government’s ill-fated attempt to introduce Aramis, a driverless light rail car, to Paris in the 1980s. Despite being championed by the French defence company Matra and supported by the government, and despite the successful development of prototypes (boasting some of the most advanced and reliable technologies of its time) the project failed to take off. The experience is described in a wonderful book Aramis or The love of Technology by Bruno Latour.

Could the driverless car meet the same fate? We do not yet know. What is more certain is that there is much work that needs to be done to make the market for the driverless car a reality. There are policy implications associated with developing the right infrastructure, creating a new automotive support system and the right markets for self-drive systems. Manufacturers will need to understand the services and capabilities they need to supply with these new vehicles. Businesses will have to develop new models that connect them with other businesses to form networks of support and they will have to work to imagine, make and shape markets for these new technologies as they unfold. The self-driving car holds much promise. But it might not be taking you to any destination just yet.

Dr Katy Mason is Reader in Marketing & Management at Lancaster University. She is co-author of the paper "Self driving cars: A case study in making new markets", which is part of a series of reports on market making for the Big Innovation Centre.

The Google car. Photograph: Getty Images

Dr Mason is Reader in Marketing & Management at Lancaster University.

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Stability is essential to solve the pension problem

The new chancellor must ensure we have a period of stability for pension policymaking in order for everyone to acclimatise to a new era of personal responsibility in retirement, says 

There was a time when retirement seemed to take care of itself. It was normal to work, retire and then receive the state pension plus a company final salary pension, often a fairly generous figure, which also paid out to a spouse or partner on death.

That normality simply doesn’t exist for most people in 2016. There is much less certainty on what retirement looks like. The genesis of these experiences also starts much earlier. As final salary schemes fall out of favour, the UK is reaching a tipping point where savings in ‘defined contribution’ pension schemes become the most prevalent form of traditional retirement saving.

Saving for a ‘pension’ can mean a multitude of different things and the way your savings are organised can make a big difference to whether or not you are able to do what you planned in your later life – and also how your money is treated once you die.

George Osborne established a place for himself in the canon of personal savings policy through the introduction of ‘freedom and choice’ in pensions in 2015. This changed the rules dramatically, and gave pension income a level of public interest it had never seen before. Effectively the policymakers changed the rules, left the ring and took the ropes with them as we entered a new era of personal responsibility in retirement.

But what difference has that made? Have people changed their plans as a result, and what does 'normal' for retirement income look like now?

Old Mutual Wealth has just released. with YouGov, its third detailed survey of how people in the UK are planning their income needs in retirement. What is becoming clear is that 'normal' looks nothing like it did before. People have adjusted and are operating according to a new normal.

In the new normal, people are reliant on multiple sources of income in retirement, including actively using their home, as more people anticipate downsizing to provide some income. 24 per cent of future retirees have said they would consider releasing value from their home in one way or another.

In the new normal, working beyond your state pension age is no longer seen as drudgery. With increasing longevity, the appeal of keeping busy with work has grown. Almost one-third of future retirees are expecting work to provide some of their income in retirement, with just under half suggesting one of the reasons for doing so would be to maintain social interaction.

The new normal means less binary decision-making. Each choice an individual makes along the way becomes critical, and the answers themselves are less obvious. How do you best invest your savings? Where is the best place for a rainy day fund? How do you want to take income in the future and what happens to your assets when you die?

 An abundance of choices to provide answers to the above questions is good, but too much choice can paralyse decision-making. The new normal requires a plan earlier in life.

All the while, policymakers have continued to give people plenty of things to think about. In the past 12 months alone, the previous chancellor deliberated over whether – and how – to cut pension tax relief for higher earners. The ‘pensions-ISA’ system was mooted as the culmination of a project to hand savers complete control over their retirement savings, while also providing a welcome boost to Treasury coffers in the short term.

During her time as pensions minister, Baroness Altmann voiced her support for the current system of taxing pension income, rather than contributions, indicating a split between the DWP and HM Treasury on the matter. Baroness Altmann’s replacement at the DWP is Richard Harrington. It remains to be seen how much influence he will have and on what side of the camp he sits regarding taxing pensions.

Meanwhile, Philip Hammond has entered the Treasury while our new Prime Minister calls for greater unity. Following a tumultuous time for pensions, a change in tone towards greater unity and cross-department collaboration would be very welcome.

In order for everyone to acclimatise properly to the new normal, the new chancellor should commit to a return to a longer-term, strategic approach to pensions policymaking, enabling all parties, from regulators and providers to customers, to make decisions with confidence that the landscape will not continue to shift as fundamentally as it has in recent times.

Steven Levin is CEO of investment platforms at Old Mutual Wealth.

To view all of Old Mutual Wealth’s retirement reports, visit: products-and-investments/ pensions/pensions2015/