By William Gavin and Christine Ji
There could be 100 million autonomous cars on U.S. roads, and 98% of all cars sold could be AVs by 2050, Morgan Stanley projects
Alphabet's Waymo is leading the robotaxi wave with 2,500 autonomous vehicles in five cities, with another 11 cities listed as targets.
With just a few thousand autonomous vehicles on the road today, widespread adoption of driverless cars may seem like a far-fetched fantasy. But a robotaxi-dominated future might be arriving faster than you think.
Today, humans around the world spend a collective 82 million years inside roughly 1.2 billion cars that drive 12 trillion miles annually, according to Morgan Stanley.
By 2050, the bank projects 98% of all cars sold globally could be autonomous vehicles. In the U.S. alone, it's projected that there will be at least 100 million vehicles equipped with software that allows them to operate in at least some conditions without input from a human.
Waymo, a startup backed by Google-parent Alphabet (GOOGL), is leading the pack in this technological shift. The company has about 2,500 vehicles ferrying customers to-and-from locations in five cities as of December, with another 11 U.S. cities listed as its next targets.
There's also Tesla (TSLA), which aims to begin offering a fully autonomous ride-hailing service in Austin, Texas by the end of the month, and a slew of companies across the U.S. working on similar services. That includes Zoox, an Amazon (AMZN)-backed startup offering free rides in Las Vegas, and May Mobility, which put its AVs on Lyft's (LYFT) Atlanta network in September.
Waymo was born out of Alphabet's research and development lab Google X and became its own independent subsidiary in 2016. According to Google X founding member Tom Chi, the core issue that initially spurred the self-driving project was a question of optimization. Estimates suggest that the utilization rate of household cars is around 5% - meaning that a car sits unused for 95% of its functional life.
By operating continuously and using algorithms to anticipate rider demand, a robotaxi fleet could drastically increase vehicle utilization, reducing the number of cars on the road and subsequently congestion and pollution, Chi told MarketWatch. Chi left Google in 2012 and is now the founding partner of the venture-capital firm At One Ventures.
Canaccord Genuity projects Tesla's robotaxis could each clock 1,000 miles a week by 2035, roughly four to five times the distance an average personal car drives today. A scenario where autonomous vehicles increase utilization from 5% to 25% would mean that one car could perform the same amount of work currently done by five, leading to an 80% reduction in the number of cars on the road.
&#34;Imagine that you have a city where you've used a quarter of the area for parking, and now imagine you're able to get 80% of that area back,&#34; Chi said.
Safer roads
Although each company has a different approach, they've made pretty similar promises to consumers. Chief among them, is the idea that replacing humans at the wheel with high-tech software will provide immense safety benefits.
According to the National Highway Traffic Safety Administration's estimates, more than 39,000 people died in traffic crashes last year. And a 2015 NHTSA study of crash data found that the vast majority of crashes were attributed to driver error, rather than vehicle failure or environmental factors.
Autonomous vehicle companies envision a future where most humans don't need to touch a steering wheel and argue that replacing drivers will go a long way toward minimizing dangerous situations. And the data they've disclosed does help make that case.
Based on 127 million fully autonomous miles, Waymo says its vehicles were involved in 90% fewer crashes that resulted in serious injuries than human-operated cars. And Tesla claims that using its advanced driver assistance system has resulted in seven times fewer major collisions, based on more than 6.9 billion miles of data driven using the software.
But, no technology is perfect.
The NHTSA is currently investigating Tesla over alleged violations of traffic-safety laws, some of which are said to have resulted in crashes. Over the summer, the NHTSA closed a 14-month inquiry into a series of minor collisions involving Waymo robotaxis, but the regulator has an ongoing investigation over Waymo cars driving around stopped school buses.
Waymo also sparked a media frenzy when one of its cars accidentally killed a beloved bodega cat in San Francisco, which was reignited when a robotaxi ran over a small dog some weeks later. While no human fatalities have been directly caused by a Waymo robotaxi, it's only a matter of time, according to Waymo co-Chief Executive Tekedra Mawakana.
&#34;I think that society will&#34; accept a death caused by a robotaxi, she said at a TechCrunch conference in November. &#34;I think the challenge for us is making sure that society has a high enough bar on safety that companies are held to.&#34;
Supporting 'autonomy in people'
Besides safety, there's one constant in every pitch to consumers: time.
&#34;It's effectively a product where you can sit back [and] do something else with your time,&#34; Adam Rodriguez, head of AV products for General Motors (GM), told MarketWatch earlier this year about GM's push for hands-off, eyes-off driving software.
&#34;This gives you your time back,&#34; Rivian Automotive (RIVN) CEO RJ Scaringe said recently of his company's plans for similar tech.
And Tesla CEO Elon Musk suggested at his &#34;We, Robot&#34; event in 2024 that autonomous cars can be thought of as little lounges.
&#34;You can do whatever you want while you're in this comfortable little lounge, and when you get out you will be at your destination,&#34; Musk said.
That's not too different from most public transit, although taking a bus or train may involve an extra walk or drive (or, according to a recent survey of Waymo customers, a connecting robotaxi trip). What sets robotaxis apart is the privacy it offers that can't be found on crowded subways or even in a traditional taxicab.
Kerry Brennan, a manager on Waymo's product and customer research team, said that Waymo's ridership doesn't just consist of the stereotypical young, affluent early adopter. According to her, many of Waymo's riders are people who, for one reason or another, are unable to drive themselves or find taking traditional ride-hail services or public transportation uncomfortable.
&#34;I always like to say we're working on building autonomous driving to support autonomy in people,&#34; Brennan said.
That's also being extended, slowly, to children too. Although Waymo won't let parents ship kids of any age to school or soccer practice - not that everyone has strictly followed that rule - it has introduced accounts for some teenagers in Phoenix that require parental permission.
But while robotaxis are set to give some people more autonomy, they also stand to cost others their jobs. As the cost of operating driverless vehicles comes down and more are made available, they're expected to replace at least some of the millions of U.S. drivers and couriers currently working.
Dara Khosrowshahi, the CEO of Uber Technologies (UBER), said in September that drivers losing their jobs &#34;is going to be a real issue&#34; in about 10 to 15 years. Lyft CEO David Risher told Fortune recently that self-driving cars won't replace human drivers for &#34;years and years and years&#34; to come.
But labor advocates like the International Brotherhood of Teamsters aren't keen to wait and see how the industry turns out. Unions across the country have called for government action to push back against AV expansion.
&#34;This isn't about innovation,&#34; Michael Ortiz, a Teamsters union member and driver for Republic Services, said at an October Boston City Council meeting. &#34;This is about who gets to have food put on their tables, a roof over their heads.&#34;
Better communities
The impacts of driverless cars could expand far beyond the transportation industry. Stanford economist Nicholas Bloom sees the technology transforming the real estate market as autonomous vehicles incentivize people to move from cities to suburbs, continuing the trend started by the pandemic and rise of remote work.
&#34;This has massive benefits as it will make housing cheaper by spreading people out, with bigger yards, more parks and leisure space,&#34; Bloom told MarketWatch over email.
Such a development could completely overturn current real estate pricing dynamics, as property near roads and away from city centers could increase in value while property by current transit hubs experience price declines, he added. It would be a game-changer for a U.S. housing market plagued by unaffordability and insufficient supply - especially for younger Americans largely shut out by a lack of affordable entry-level homes.
Additionally, if individual car ownership declines, suburban homeowners could reclaim their garages and transform the square footage into livable space, Chi added.
The benefits extend beyond the suburbs. By optimizing traffic flow and reducing the need for parking, autonomous vehicles could help reshape urban centers into denser, more walkable communities.
&#34;When we talk about the future here, it's not just that people can commute farther and they can nap in the car,&#34; Chi told MarketWatch. &#34;I think it's actually going to rewrite how cities are made entirely. If we wanted to use some of that space to build more housing and make cities more affordable, we could.&#34;
Chi added that real-time ridership data could also guide policy, allowing cities to optimize the placement of new public transit hubs based on actual demand.
A technology that promises sweeping changes for society won't be adopted seamlessly, and Bloom sees legal, insurance and regulatory barriers accompanying the new technology.
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<p>Morgan Stanley projects 100 million autonomous cars on U.S. roads and 98% of all cars sold could be AVs by 2050. Waymo, backed by Alphabet, leads with 2,500 vehicles in five cities. Tesla and others are also advancing. Autonomous vehicles promise increased safety, reduced congestion, and higher vehicle utilization. However, challenges remain, including regulatory scrutiny and public acceptance of accidents involving AVs.</p>

- Morgan Stanley projects that by 2050, 98% of all cars sold globally could be autonomous vehicles, leading to at least 100 million driverless cars on U.S. roads.  
- Waymo, with 2,500 vehicles, is at the forefront of this shift, while Tesla and other companies are developing similar services, aiming to improve safety and reduce congestion.  
- The widespread adoption of autonomous vehicles may significantly impact urban planning and the housing market, prompting a move towards suburban living and reshaping city landscapes.

Less traffic, more lounge time, cheaper homes? How robotaxis promise a whole new world.