Quick and dirty ideas about
self-driving cars and attempt to tie into my finals studying.
Introduction
What’s going to make grandma’s bad hip change from
debilitating to hip? When she is the first person on the block to purchase a
completely self-driving car.
Technological advances typically take root in younger
generations, Snap Inc. has a market value near $24 billion largely because its
users are young (and dumb). I-Pad’s and smart phones are second nature to
elementary students. Business owners spend millions for the latest software to
manage internal operations or expand their market reach. Yet, my 70 year old
father needs instructions on sending a picture from his phone. As my father
ages our families comfort level with him driving will lessen but we will
struggle with trying to give him the autonomy which he deserves and which his
mental capacity is capable.
I propose that within the next few years autonomous driving technology
will substantially increase in its demand and available supply. Therefore I am
proposing a potential investment portfolio which could take advantage of this
transportation revolution. My analysis is solely focused on the self-driving
portion of these companies public
corporations like Google or Apple and close
corporations such as Uber. A very basic portfolio is contained at end of
post.
The typical joke in my circles is about how bad Utah drivers
are…but a strong case can be made that Arizonan’s also would be better off with
computers at the helm. The 2015
Arizona crash facts claim that $3.8 billion in economic loss was caused by vehicle
crashes. This number gives a generous economic impact to the 895 person who
were killed on Arizona roads in 2015 but property damage accounted for nearly
$1 billion. The US
Department of Transportation 2015 crash stats attribute 94% of vehicle
crashes to correctible human error. A lucrative market exists for the entrance
of self-driving cars.
Benefits of wide-spread self-driving car use is apparent: Insurance
premiums and deductible payments will lower and save citizens substantial money.
Self-driving cars themselves contain technology which makes them better, safer
drivers than humans.
Owners of cars will benefit from a greater ability to multi-task (now you won’t
get the stink eye for putting your makeup on while driving). And the efficiency
of roads will increase which curbs pollution and fuel costs (hopefully starting
with 101 north in mornings, 60 east in afternoons, and downtown 10 whenever).
Potential Legal
Implications
The rise of autonomous vehicles will have an effect on land
use in Arizona jurisdictions. States enable
counties, cities, and towns to exercise its police
power to regulate transportation (US Constitution 10th amendment: authority not contained in the federal
government is left to state governments). Local jurisdictions will likely need
to be proactive
in developing ordinances which do not
inhibit the orderly growth of self-driving vehicles. It is likely that
legislatures will be able to create ordinance’s which will not be challenged by
referenda or preempted by initiative.
Primarily, road use will be affected because flow of cars on
roadways will be more efficient. State budgets could significantly be increased
by a change in transportation funding. Narrowing of roads or less demand to
expand roads will lessen both federal and state funding of roads. Allocation of
tax monies will lead to debates on how to use potential revenue surplus. Synonymous
with an increase in the popularity of autonomous vehicles is the improvement of
technology related to group travel and task-oriented travel. Local mass-transit
systems possibly will be affected by more nimble transportation methods (think carpool
systems which have algorithms to pick multiple individuals up from home instead
of a bus-stop and can take directly to needed location).
Regulation of autonomous vehicles could largely fall under
the jurisdiction of the federal government based on the commerce clause. The Department
of Transportation would create certain standard requirements and states
would adjust those requirements according to their state specific needs. Even
though most driving occurs in-state as people go to work and local activities,
transportation still has a significant influence on interstate commerce and principles of federalism wouldn’t be affected by general national guidelines.
It is conceivable that potential litigation could arise if seniors owned self-driving cars and their
ability to use the vehicles was being curbed by government regulation. The freedom of movement is largely a
judicial construct under the privileges
and immunities clause of the US Constitution. This privilege has taken on “right” status. Given how it’s been
variously used in other cases, freedom of movement possibly could be construed
to protect self-driving cars.
The Portfolio
Potential self-driving car focused portfolio. Assuming you
get free trades and wont get overly burnt on commission fees. $1,000 investment
unless if you are able to get into non-public companies which likely would increase
minimum investment amount substantially.
-Apple
(Aapl): 1 share at $143
-Vanguard Industrials Index Fund (VIS): 5 shares at $124
-General Motors (GM): 1 share at $33
-Ford (F): 1 share at $11
-Google (Goog): 1 call option at $107
-American Airlines (AAL): Short 1 share at $46
-United Airlines (UAL): Short 1 share at $71
-Medallion (TAXI): Short 10 shares at $3
-Find a way to privately place in companies like AutoNet
2030 (sensors/computers) or Local Drive (engine and body design)
-Hope that Turo does another round of investments and that
you’re an sophisticated angel investor who can get a slice (not likely)
Many industries would be affected by growth of the
self-driving car. Delivery of materials and crew would be more effective and
lead to less subcontractor caused delays.
It is likely that self-driving cars would inhibit short-term airline models
because persons would be given the opportunity to drive at night and sleep
while driving or purely choose to drive 4 hours from door to door instead of
driving to airport early and enduring security and hassle of boarding a plane. Taxi,
shuttle, and disabled transport companies would likely lose clients.
Another industry which could be impacted is the construction
industry. Construction lawyers will
have added work as contracts for manufacturing self-driving cars increases and
construction of plants devoted to self-driving spring up. There likely will not
be changes to basic principles of offer
and acceptance or prompt payment,
warranty, differing site conditions, etc.
Thanks for reading. Would be glad to hear your thoughts on
self-driving car development in general or anything specifically related to
this stream-of-thought post.
Note: This does blog does not constitute financial or legal
advice. Investment is subject to risk and all investment should be considered
in light of appropriate risk management and diversification principles.
