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Self-Driving Cars and the Economy of Fuel by Beth Kelly

14 July 2015

Self-Driving Cars and the Economy of Fuel

By Beth Kelly

Internet search leader Google is testing its self-driving automobiles on public roads this summer. This latest phase of testing follows previous successful trials, further indicating the fact that the reality of driverless cars is coming ever-closer to fruition. It’s only a matter of time before these autonomously operating vehicles begin to displace “traditional” human-directed cars – a development that will have serious repercussions across the whole of society.

There have been plenty of features introduced over the years to make driving a car easier, like power steering and cruise control, but Google’s driverless cars are a whole new ballgame. The on-board computer will handle accelerating, braking, steering, lane positioning and all other functions without human intervention, turning the “driver” into little more than a glorified babysitter. These awesome capabilities are made possible by the fusion of sophisticated sensors and cameras with heavy-duty computing machinery to process the incoming data and determine the correct action for the vehicle to take at all times. Indeed, it’s fair to say that this new type of automobile will be more tech gadget than horseless carriage.

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As befits a computing device in the 21st century, the Google self-driving car will almost assuredly ship with the ability to connect to other devices and the Internet at large. If traffic signals and other road infrastructure can communicate with vehicles, road delays could be reduced and cars automatically rerouted in case of accidents or road closure. Companies that operate large fleets of vehicles will most likely be able to achieve significant improvements in efficiency because currently, most cars sit idle much of the time, but if they can be directed remotely, they’ll be able to operate nearly around-the-clock. A prime example, as told by Science Recorder, are taxis and the potential benefits of automated “robo-taxis”. People using the driverless cars, because they won’t have to focus on the road, will be able to surf the web, compose important business documents and engage in other pursuits more rewarding than personally directing large piles of metal and plastic across town.

Other advantages of nonhuman drivers don’t require the use of online communications at all. Fully computer-driven cars have already proven to be much safer than flesh-and-blood drivers. They’re programmed to follow all the rules of the road and tend to act in a much more defensive manner than human drivers. As driverless vehicles become part of the mainstream, we’ll see the number of accidents lowered, leading to a consequent reduction in deaths, property damage and insurance premiums. At the same time, people with reduced mobility or who have other problems preventing them from sitting behind the wheel will see their freedom and independence grow through the use of this automated technology.

Perhaps the most far-reaching impact of this exciting, new tech will be in the environmental sphere. These cars consume less fuel than old-school automobiles because computers can make better decisions about braking and accelerating. With in-built GPS capabilities, there will little fuel wasted from getting lost or taking a scenic route to a destination, as existing efforts by Teletrac demonstrate. And according to an Alberta Energy survey, if automatically driven vehicles come to dominate the marketplace to the point that human drivers are rare or non-existent, then additional fuel economy gains could be realized by redesigning cars to eliminate bulky safety equipment. Seat belts, airbags and mirrors won’t really be needed once traveling by automobile becomes much safer than it is today. Although the increased convenience of road travel will probably cause the total number of miles driven to increase, the reduced environmental impact of each mile of travel will more than compensate for this.

While estimates vary on how close driverless cars are to being ready for consumer adoption, hardly anybody doubts that they’ll eventually become standard. The automotive, in-car entertainment, travel, fuel, and insurance industries will either have to get with the program or risk being consigned to oblivion.

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About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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