Enter Details

Comment on stories, receive email newsletters & alerts.

This is your permanent identity for Business Insider Australia
Your email must be valid for account activation
Minimum of 8 standard keyboard characters


Email newsletters but will contain a brief summary of our top stories and news alerts.

Forgotten Password

Enter Details

Back to log in

Why no one will own a driverless car

Citymobil2 electric shuttleYouTube/ polisvideoA driverless electric shuttle in Trikala, Greece.

Even though companies are racing to release their version of autonomous vehicles by 2020, several factors could affect mass adoption, according to a massive report put together by Merill Lynch.

One factor is called the Droogle (which is a combination of Drones and Google) scenario — the idea that fully autonomous cars will primarily be used in the form of public transit, and that the amount of people who actually own self-driving cars will decline as a result. 

According to the report, public transit autonomous vehicles, like robotaxis, will account for 19% of new car sales.

And by 2040, Merrill Lynch predicts vehicles like robotaxis could make up as much as 43% of all sales.

Merrill Lynch is not the first to caution that driverless cars will first come in the form of public transit.

The Boston Consulting Group (BCG) said in a report in April that fully autonomous cars will first be used in big cities as fleets of robotaxis, also referring to the trend as the Droogle scenario, according to the Wall Street Journal

By 2035, 12% of global new car sales may come from Droogle robotaxis in cities, with that number climbing to 23% by 2040, BCG said. This will result in a decline in vehicle ownership in cities.

Automakers and tech companies developing self-driving cars are already preparing for the kind of reality described in the Droogle scenario.

Earlier this month, Elon Musk hinted that Tesla might get into the ride-sharing business during an earnings call and General Motors has also said they plan to invest more in mobility services.

Meanwhile, many cities are already embracing autonomous vehicles for mass transport. 

Japan plans to launch an autonomous taxi system in 2016 with the ultimate goal of commercialising them for the 2020 Tokyo Olympics.

And in Europe Citymobil2 —  a pilot program for automated transportation systems funded by the European Union — is bringing driverless electric vehicles to various cities in Greece, Finland, and the Netherlands.

Certain cities in Spain, Singapore, and in Northern California are also expected to get similar driverless shuttles in 2016.

Given how demand for the technology is already growing, the Droogle scenario doesn’t seem too far off.

NOW WATCH: The largest property developer in China is making its own driverless cars

Follow Business Insider Australia on Facebook, Twitter, and LinkedIn