The market for driverless cars will head towards monopoly

THE race to bring driverless cars to market is fierce and crowded. All the leading carmakers are in the field: on May 31st SoftBank’s Vision Fund said that it would invest $2.25bn in the autonomous vehicle (AV) arm of General Motors. So are tech upstarts, from Uber to Tesla to Waymo, Alphabet’s self-drive division and the leader in driverless technology, which recently announced plans to add 62,000 minivans to the fleet of cars that will make up its autonomous ride-hailing service. Intense competition has both benefits and costs, but will probably prove short-lived. Thanks to powerful economies of scale, the roads may soon be ruled by no more than a handful of firms.

The advantages of scale begin with data. Like humans, the computers which power driverless cars improve with experience. The computers sitting in AVs are essentially in the business of learning and improving on what a good human driver would do, write Ajay Agrawal, Joshua Gans and Avi Goldfarb in their new book, “Prediction...



via The Economist: Finance and economics Business Feeds

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