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Smart Driving Cars: The Rudimentary Business Case What Is In It For Whom?

Smart Driving Cars: The Rudimentary Business Case What Is In It For Whom? Alain L. Kornhauser Professor, Operations Research & Financial Engineering Director, Program in Transportation Faculty Chair, PAVE (Princeton Autonomous Vehicle Engineering

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Smart Driving Cars: The Rudimentary Business Case What Is In It For Whom?

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  1. Smart Driving Cars: The Rudimentary Business Case What Is In It For Whom? Alain L. KornhauserProfessor, Operations Research & Financial EngineeringDirector, Program in Transportation Faculty Chair, PAVE (Princeton Autonomous Vehicle Engineering Princeton UniversityBoard Chair, Advanced Transit Association (ATRA) April 19, 2013

  2. Current State of Driverless Cars http://gawker.com/5825012/how-a-top-google-executive-nearly-killed-a-guy • Much of the public interest has been promoted by the car. http://www.youtube.com/watch?v=cdgQpa1pUUE • It is not driverless… • Not yet • But substantial advancements have focused on: • Development of a self-driving vehicle that can operate in the existing environment. • Motivated by fact: >90% of road traffic accidents involve human error. So… remove the human from the loop. • Often… People really do not want to drive. • Driven over 500,000 miles in self-driving mode

  3. What is in it for whom? • Players • Consumers • Automobile Companies • Infrastructure Providers/Managers (DoT, NJTPA, PANYNJ) • Transit Operators • Insurance Companies • Society/The Economy

  4. What is in it for whom? • Consumers • Main Values: Increased Safety, Comfort and Convenience. • AAA:

  5. What is in it for whom? • Consumers • Main Values: Increased Safety, Comfort and Convenience. • AAA:

  6. What is in it for whom? • Consumers • Main Values: Increased Safety, Comfort and Convenience. • AAA:

  7. What is in it for whom? DOT HS 810 767 Pre-Crash Scenario Typology for Crash Avoidance Research • Consumers • Main Values: Increased Safety, Comfort and Convenience.

  8. What is in it for whom? DOT HS 810 767 Pre-Crash Scenario Typology for Crash Avoidance Research • Consumers • Main Values: Increased Safety, Comfort and Convenience.

  9. What is in it for whom? DOT HS 810 767 Pre-Crash Scenario Typology for Crash Avoidance Research • Consumer • Main Values: Increased Safety, Comfort and Convenience. $475 are Pass-through Dollars

  10. What is in it for whom? $475 are “Pass-through” Dollars Assume: Emergence of “Price Leading” Insurer $450 Discount for You $25 for Flo or the Gecko Could Discount Finance?:

  11. Could “Pass-through” Finance Mercedes Lane Keeping + Jam Assist to be Available in 2014 Models Probably only 2/3rds the safety of Google Car $475 Pass-through becomes: $320 $20/yrfor Flo or the Gecko $300/yr to Mercedes • You get (for free): • Prob. of your car killing you reduced factor: 2/3*.81= 0.54 (half) • Prob. of your car injuring you reduced factor: 2/3*.65= 0.44 • “Save” expected “deductible self-insurance”: $247/yr • Comfort • Convenience • “Anxiety” relief

  12. What is in it for whom? New Jersey Consumers

  13. What is in if for whom? Can’t really place value on the injuries and lives that will be saved Priceless! Self-driving Technology has a REAL business model! Society

  14. Thank You Alaink@Princeton.edu

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