The Economist ran a whole series named “The World If” in their latest week issue. The section went from the practical (why China is interested in creating a canal in Central America) to the unthinkable scenarios (if an asteroid heads for Earth). One article that was included is a topic that has been discussed ever since Uber claimed it was working towards driverless cars: if autonomous vehicles rule the world.
I think there has been a good amount of research on commentary about the subject, and I briefly want to go over the scenario. Essentially, with Google’s driverless car doing well in the real world (in all 15 accidents involving the Google car, it wasn’t the offender), the idea of autonomous cars becoming the norm is no longer science fiction. Research has suggested that autonomous cars will save time, money, and, most importantly, lives.
However, driverless cars spell the doom for existing industries that rely on the car as it is today. The most affected is, of course, the taxi service industry. With Uber already displacing the existing establishments in place, this new innovation will effectively kill taxis as we know it. In addition, the cars and transportation industries will be affected, with car manufacturers forced to upgrade their factories and with truck drivers no longer needed. The emerging markets will also suffer to a certain degree as even mining operations become even more automated.
Clearly, society is moving towards less ownership and more “as a service” model. For the average person, not keeping a car and yet still have it available whenever needed saves on overhead, maintenance, and general headaches with owning a vehicle. But does this mean the same thing for other aspects of our lives? Namely, real estate?
Perhaps this is a question that doesn’t need to be asked. We spend the majority of our lives in physical structures that we either have some type of ownership or membership (i.e. home, work). More often than not, people would prefer to cut down the amount of time they spend in the car. But Airbnb has become a very attractive model; despite being only a middleman, it has the same value as Hilton Hotels. Is it too much of a stretch to think that homes could be used “as a service” like automated cars?
In the near- to mid-term future, real estate should be fine. Personally, I believe that real estate value will grow, but that’s besides the point. The idea of home ownership is still something that is deeply ingrained in not only the American psyche but around the world. People still speak of their “ancestral lands,” and it is still seen as part of having a balance, stable life. Though car ownership and home ownership can be put in the same sentence, they have very different usages: a car will get us to where we need to go, but home is still a destination.