Do Driverless Cars Cause Unemployment and Budget Cuts?

At first glance, it seems as if driverless cars would have negative impacts on the economy. This change of drivers to no drivers is one which would be met with hesitation as the average person would automatically equate driverless cars to a mass loss in the number of jobs. This is a reasonable expectation to have as it would be an inevitable outcome, as jobs with drivers will no longer be required. Redundancies would likely occur in the lower skilled sectors of taxi and bus driving , driving instructors and eventually DVLA may go out of business . This would probably cause a workers to shift jobs into different sectors, However, this might not necessarily produce a net welfare loss because as it could act as a incentive for people to peruse more highly skilled and paid jobs in software and technology.

Although it is unavoidable that jobs lower down would be at risk, there is also the possibility that the legal system could also take a huge blow. As stated previously, it would require a shift In the areas of law in which lawyers specialise in. The driverless cars would be programmed to drive at a particular speed in line with the speed limit of the particular area, it would make sense that there will be no need for transport police since they will no longer have to chase down reckless drivers or speeders. This also close relations to the issue of driving under the influence. Drink driving will no longer be a problem as whoever who is drunk would not need to drive themselves home as a result of the proposed driverless car system. These factors could have a detrimental effect on the legal profession as the offences involving driving under the influence or vehicular manslaughter. Last year 84,000 people were convicted of drink-driving related offences. This means as result of driverless cars traffic offences will no longer be crimes that can be committed thus no one would need legal aid to help defend them.

Although it seems as if driverless cars will increase unemployment the implementation of driverless cars could cause a surge of new jobs. As driverless cars would be able to drive themselves home for example, the demand for car parks will reduce, this could create a magnitude of spaces to build places which will offer potential jobs, anything from shopping centres to 100-floor sky scrapers.

Apart from the impact on jobs, the economy may cause a change in aggregate demand of countries as investment, government spending, exports which total up to all the good and services created by an economy, could contract or expand. For example, there is are few countries whose economy which depends heavily on the sale of oil, the implementation of driverless cars which will created as electric cars will reduce the need for fuels such as petrol and diesel. This clearly has enormous benefits as it will reduce the amount co2 emissions produced from driving and deal with the issue of global warming. However, this decrease in the need for petrol could have detrimental impacts on the economy of many nations who rely solely on the price of the production of crude oil such as Venezuela where oil is 96% of exports and 40% of government revenue, Libya which is 95% and Russia and Kuwait. The reduction in the demand for oil will cause a depletion in the need for gas stations which could remove companies such as Texaco, Esso and shell thus making this market at jeopardy.

In relation to the point above, as the price of fuel is likely to decrease as it will no longer need to be used, government revenue will decrease as the taxes on fuel will be insufficient to sustain the same amount of government spending which could cause austerity measures. There could also be a reduce in the revenue made from parking tickets which in 2014/15 raked in 700 million. In order to prevent a decrease in government revenue, we might potentially see a shift in taxes on fuel to perhaps the amount of miles driven or the charging the car in public spaces in order to sustain government revenue.

Oluwabomi Adeleke

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