On Feb 16, 10:13=A0pm, David Friedman <d...@[EMAIL PROTECTED]
>
wrote:
> In article
> <6386119a-a980-42f8-8234-c674a8d4b...@[EMAIL PROTECTED]
>,
>
> =A0Willie.Moo...@[EMAIL PROTECTED]
wrote:
> > What Ford found though when they did market studies was that car sales
> > would plummet along with profits. =A0Why? =A0 Because personal buyers
> > would more than likely disappear as they went to high quality taxi
> > services that didn't have to pay drivers, and they'd have a large
> > number of high quality cars sitting around available at little over
> > cost.. =A0Fleet buyers would dominate and about 1/4 the number of
autos
> > would be sold. =A0It would end congestion, and be more efficient - but
> > it would kill the auto-industry. =A0So, you don't see it.
>
> And you know all this how?
Because I read my daddy's Wall Street Journal and Forbes Magazine
articles in the 1950s and attended car shows then - and my dad kept
articles he thought I might be interested in reading
> Let me offer three reasons not to believe it.
Reality doesn't require your belief to be what it is.
> 1. Ford was not and is not the majority of the auto industry.
Ford was the automotive industry in pre-war America and was the
central participant in the growth in America's post-war economic
growth
http://books.nap.edu/openbook.php?record_id=3D291&page=3D51
> If they
> can produce a driverless car, they will have a much larger share of that
> market--even if it is a smaller one.
They can produce a driverless car - the technology has existed since
the 1950s. A wire down the center of the road, two receivers, one on
each side of the front bumper, would give a differential signal and
the differential op-amp would produce a feedback loop that keeps the
car centered on the wire. The intensity of the signal determines
speed. If the system stops transmitting for any reason all cars on
that loop stop. The heavy metal bodies of cars in the 1950s cause a
signal depression due to Faraday shielding and when cars get close to
one another the signal drop causes the vehicle behind to slow down and
take up a fixed distance behind the car in front.
They had a quite detailed description of it at several car shows.
> 2. Switching to taxi services doesn't reduce the number of miles driven
> per year--indeed, if they are more convenient, it increases the number.
You've missed the point - and actually made the case - if you were
right in your analysis. Yet, your analysis is incomplete. First of
the rate at which something is consumed relative to another thing -
assuming their both equal in every other way - depends on price. So,
the number of miles driven is a function of the cost per mile assuming
equal convenience. Driverless cars are more convenient in many ways.
For the sake of this point let's say they're equal. Lets say too the
cost per mile is the same for the consumer, so the demand for miles is
constant in both cases. Now, Ford or any other manufacturer is in
the business of selling cars, not miles. In the case of privately
owned vehicles there is a vehicle for every two people. In the case
of driverless taxies, there is a vehicle for every twenty people. The
same miles are driven, but instead of there being vast parking lots
and parking garages covering half the acreage of a city, there are
cars shuttling back and forth picking up people and depositing them on
demand. So, the miles driven in both cases are the same, or even more
for the driverless cars since they have to be re-positioned to pick
folks up - dead head drives - but the number of vehicles sold is
smaller in the driverless case, which was my point. Furthermore, the
buyers are fleet buyers making a business decision, not emotionally
driven buyers making a personal statement about wealth - so, the
margins as well as the volume decreases. Finally, service will be
done centrally by company owned shops on a regular basis, and so,
secondary revenues will likely decrease as well.
Congestion is a function of vehicle number not vehicle miles driven -
reduce the number of vehicles - and congestion is reduced.
> Most cars, so far as I can see, end up wearing out.
Now now, how you maintain a car determines the ultimate mileage you
get. For example the power steering pump seal frequently breaks after
24,000 miles - because people don't practice preventive maintenance on
it and replace the fluid regularly. Yet, these pumps with excellent
maintenance have been known to last over 200,000 miles. Obviously,
fleet buyers will maintain their cars to a higher degree than a
private owner to maximize the value of the vehicle to the company and
through bulk purchasing will pay lower premiums for the hardware.
So, not only does the manufacturer get a double whammy on their
primary sales (1/10th the number of cars and 1/3 the margins) but
they get a triple whammy on replacement parts (1/10th the number 1/3
the margins and 1/5th the replacement rate)
> So if the average
> car is good for a hundred thousand miles and total driving is (say)
> 10^12 car miles/year, about ten million cars a year will be purchased.
This is the average when maintained by the average buyer. The same
vehicle when owned by a mechanic and pedantically maintained can last
30x longer - so, a car that routinely drives 100,000 miles before
replacement when owned privately will drive 3,000,000 miles before
replacement - so, expect at lease 1/10th the sales rate.
> So it wouldn't be a smaller market but a bigger one.
No, because you are not taking into account why cars break down at the
mileages they do. In fact, moving toward fleet buying would cause
cars to become far more reliable than they are today. Specifying
titanium chains or gear trains rather than rubber belts that wear out
for example, or stainless steel bodies like Porsche and DeLorean
developed, or foam filled tires developed by Volvo - are technologies
that vastly improves reliability and miles driven.
> 3. One of my colleagues was involved over a period of several years with
> the project to try to design an intelligent highway--a modern system
> along the lines you describe, with cars computer controlled. They
> eventually gave up.
Often research teams that have less than capable talent funded
meagerly and constrained artificially are used to 'prove' something is
infeasible to board members who have a bee in their bonnet, or as a
sop to regulators or other stakeholders who wish to upset the apple
cart so to speak.
> If it isn't practical now, with current computer
> technology, it seems extraordinarily unlikely that it was practical
> fifty years ago.
It is highly practical they had Fords running around on test tracks
through simulated streets, ready to go.
> Or in other words, you believe it because it is a good story.
I was there. The reality doesn't depend on my belief or yours. Why
does my reporting what happened bother you?
> --
> =A0http://www.daviddfriedman.com/http://daviddfriedman.blogspot.com/
> =A0Author of _Harald_, a fantasy without magic.
> =A0Published by Baen, in bookstores now
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