The transportation industry makes up a huge portion of the US economy. Because AVs will bring about dramatic changes to this transportation, this industry as a whole, as well as consumers, will be affected.




Navigant Research predicts that 75% of U.S. vehicles sold in 2035 will have “autonomous” capability. Thus, It is thus crucial to analyze the cost benefits of AVs for the owner as well as industries (Navigant Research, 2014).

Reductions in crash frequency and collision severity is the most important benefit of using CAV technology. According to the National Highway Traffic Safety Administration (NHTSA, 2008), driver error is the primary cause for more than 90 percent of crashes in U.S. 40% of the fatal crashes involve alcohol, drugs, fatigue and/ or distraction. This resulted in 32,675 deaths and more than $500 billion in comprehensive costs in 2014 (Kockelman and Loftus-Otway, 2016). AVs may avoid most of these crashes.

As Drs. Daniel Fagnant and Kara Kockelman explain, “major social AV impacts in the form of crash savings, travel time reduction, fuel efficiency and parking benefits are likely on the order of $2,000 per year per AV, or $3,000 eventually increasing to nearly $5,000 when comprehensive crash costs are accounted for” (Fagnant and Kockelman, 2015, pg. 1). The worth of AVs to society and individual owners is quantified in the below figure (U.S. context, 2012).


Annual per-AV Economic Impacts

Source: Kockelman and Loftus-Otway, Slide 9

Future vehicle ownership

AV usage frees up travel time during commutes. AVs are extremely beneficial to people with a high value of travel time (VOTT), as these people can be much more productive while traveling in an AV. Thus, AV usage will see maximum return of investment for people belonging to high-income groups. It will also increase personal productivity by providing safe mobility for the disabled and even children.


Source: Slide 12, Kockelman and Loftus-Otway

It is likely that we will see empty vehicle-miles traveled, in order to avoid parking costs. However, this will allow vehicles to be shared among household members and will result in the reduction of vehicle ownership.

Fagnant and Kockelman predict that “most AV benefits will likely exceed the negative impacts of added VMT,” (Fagnant and Kockelman, 2015, pg. 5). Smarter vehicle operations may reduce the volume of auto repairs, but the cost per repair for vehicles is likely to rise, due to complex technology.

Fleet owners and truck platooning

“With AVs we expect to see cost savings for freight movement, but more highway congestion and several changes in origin (and mode) choice, by commodity.” (…) Automated freight transport will be beneficial for fleet owners as it provides increased capacity and saves the cost of hiring human drivers. Reduced labor costs will in turn reduce the shipping costs. They will also see improved fuel economics from tight-headway drafting.

Societal impacts

There are several public benefits as well as conflicts associated with AVs. Due to the convenience of long-distance travel using AVs and SAVs, the use of trains, planes and public transit systems in the city will be largely affected. The biggest challenges for self-driving vehicles are the barriers to implementation, market penetration, and initial costs.


This page covers the cost benefits of AVs for the consumer and society. For more information on industry-wide cost benefits, read the Industry Impacts page.


Fully automated vehicles (AVs) have a huge potential to mitigate crashes, enhance safety mobility for all, and increase road safety, road capacity, and in turn, efficiency. Availability of these factors will have direct impacts on various stakeholders involved in providing these services.

A study led by Dr. Kara Kockelman of UT Austin examined the impacts of AVs on the US economy and industry, shown below.

Source: Kockelman et al., 2016, pg. 327

AVs allow travelers to perform different tasks while commuting. The time drivers save from freeing their hands can be used for reading, sleeping, online shopping, etc. The decreased value of travel time (VOTT), or the driver’s willingness to pay to save time, ensures increased work productivity. AVs will ease mobility for disabled persons who would otherwise not be able to drive. This improved accessibility will have positive impacts on the economy. With safety being the most important factor in choosing AVs, they will bring the greatest benefits to industries related to safety services. For example, legal, fuel, administration, and insurance companies will face negative consequences. In contrast, the automotive industry will see the biggest improvements.

Automotive industry

People and businesses are likely to use Mobility-as-a-Service (MaaS) instead of owning cars. With the convenience of travel modes and reduced time travel, personal vehicle ownership is expected to decline. With AVs and electric vehicles (EVs) forthcoming, we can expect more manufacturers and technology providers for these vehicles. Clements and Kockelman, 2017 predict that software will eventually make up a larger value in a vehicle than the hardware.

Freight-related impacts

Heavy commercial trucks and freight are likely to be some of the first vehicles to implement autonomous technology. Given the economic viability of fleet implementation for freights and its high efficiency, this industry will benefit from AV technology. McKinsey estimates that the economic gains of driver-less vehicles in the trucking industry could be range from $100-500 billion per year by 2025 (McKinsey 2013). The bulk of these savings would come from the elimination of the wages of the truck drivers.

Clements and Kockelman also note, “after assistive systems, fully automated vehicles will allow convoying, in which the lead driver of a chain of multiple trucks is in control of driving, but the following trucks require no human input and are connected wirelessly to the lead truck. Convoy systems would allow long-distance drives with large quantities of goods and avoid many driver-based hours-of-service restrictions,” (Clements and Kockelman, 2017 p. 6).

Personal travel

AVs reduce the VOTT, which is defined as the WTP (willingness to pay) to avoid an hour of travel. If one is able to make more productive and less stressful use of travel, by becoming a passenger, rather than a driver, his/her VOTT falls. This makes CAVs relatively attractive for current drivers, if not for current passengers (Kockelman et al., 2017, pg. 9). Given the high cost of personal AVs, they are likely to be viewed as luxury items and be owned by only a privileged few.


Based on the results of a study, CV technologies, including V2V (vehicle-to-vehicle), V2I (vehicle-to-infrastructure), and V2P (vehicle-to-pedestrians), are estimated to save between $23 billion to $28 billion in economic costs each year, and as much as $96 billion to $117 billion in comprehensive costs each year in the U.S.  (Kockelman et al., 2016, pg. 190).


As a 2016 study sponsored by the Texas Department of Transportation notes, “when vehicles become fully automated, there may no longer be a need for extra-wide lanes, guardrails, traffic control signals, wide shoulder, or rumble strips among other safety measures because of increased safety, and manufacturers of these components will lose a source of income,” (Kockelman et al., 2016 p. 322-323) It is also likely to transform existing parking systems. Infrastructure deployment in the public realm will incur high initial investments.

Land development

AVs may be able to mitigate the overcrowding problem but, on the other hand, planners may face issues of unexpected urban sprawl in the future. The space freed up by unnecessary parking space and/or garages can be used innovatively for other purposes using design thinking.


The medical industry is also likely to lose business from the improved safety of CAVs. “McKinsey & Co. (2013) estimated that the combination of auto repair and health care bills could save consumers $180 billion, which would generate proportional losses for service providers,” (Clements and Kockelman, 2017 p. 8)


Reductions in crash frequency will also affect insurance companies, “safety improvements as a result of AVs will require insurance agencies to adapt and possibly reconstruct their fundamental business models. Insurance agencies currently net $180 billion annually in the U.S. insuring against automobile accidents and the related medical costs (Desouza et al. 2015),” (Kockelman et al., 2016, p. 321) However in the case of a crash, whether the vehicle owner or the hardware and software manufacturers are liable, remains ambiguous presently.

Oil and gas

The implementation of automated driving systems may improve fuel efficiency, “the decreased need for parking will improve fuel efficiency, as one MIT study found that 40% of total gasoline use in cars in urban areas is spent looking for parking (Diamandis 2014). SAV fleets could make electric vehicles a more viable option and even financially preferable for fleet management companies. All of these factors suggest that drivers would demand less gas for their cars,” (Kockelman et al., 2016, p. 12)

Labor industry

Automation of the driving task may bring negative impacts to the labor industry, “according to the American Trucking Association (2015), the industry employs over 3 million truck drivers and the automation of driving poses a huge threat to the livelihood of these truck drivers. At this time, however, there is already a shortage of about 25,000 truck drivers because of the long hours and time away from home, (American Trucking Association 2015)(Kockelman et al., 2016, p. 319). AVs may also put a strain on unemployment benefits currently offered by the federal government.

Shared (fully) Automated Vehicles

SAVs are economical for fleet ownership with public and private rented or shared fleets seeing a rise due to the cost competitiveness. A high penetration rate of SAVs can lead to social issues like unemployment in certain sectors e.g. drivers, or motor technicians.

Assumptions for Valuation of AVs at 10%, 50% & 90% Adoption Rates


  • 50%, 75%, & 90% per-AV crash reductions
  • ½ benefits for pedestrians & bikes, ¼ benefits for motorcycles


  • 15%, 35%, & 60% freeway delay reductions: 5%, 10%, & 15% surface-street delay reductions

Other Assumptions

  • 10% of all new AVs are shared (serving 10x as many trips)
  • 250 work days per year, with $1 /day parking savings
  • 20%, 15%, & 10% per-AV vehicle-miles-traveled (VMT) increases

(Fagnant and Kockelman, 2016)


  1. Though many potential benefits are still speculative, “assuming that CAVs eventually capture a large share of the automotive market, they will have major economic impacts, on the order of $4,900 per American per year,”  (Kockelman et al., 2016, p.12)
  2. The number of vehicles purchased each year may fall, due to vehicle-sharing within families/across household members or through shared fleets, but rising travel distances and a shift away from air travel may lead to greater vehicle-miles traveled (VMT) and ultimately higher vehicle sales (due to faster fleet turnover from heavy daily use).
  3. Owing to affordability and efficiency, heavy commercial trucks may be the first industry to implement AV technology in order to increase efficiency, with “the ideas of automated freight and transit [being] attractive for potential affordability and reliability. However, when job losses are mentioned, concerns are raised about negative economic effects,” (Kockelman et al. 2016, p. 94).
  4. Personal transport may shift toward shared (fully) automated vehicle fleet use, threatening the business of taxis, buses, and other forms of public transport.
  5. Fewer collisions and more law-abiding vehicles, due to smarter, automated vehicle operations, will lower demand for auto repairs, traffic police, medical assistance, insurance, and legal services (Kockelman et al. 2016, p. 12).
  6. Electrification of a SAV fleet is not yet financially advantageous.
  7. The shifts in the supply and demand curve will reflect a new economy which is generated by economies of scale, new markets and new products/services, (Mudge, 2014).
  8. The prospects of IT workers and analysts are positive as we enter this automation age. The evolution of Mobility-as-a-Service companies in the passenger economy will create businesses that are all about the data (Lanctot, 2017 p. 10). Data analysts will become increasingly important as self-driving cars collect data about every single aspect of our day. This data could be worth up to US $750 million by 2030 (Alexiou, 2017).