Autonomous technology will radically transform the taxi industry as driverless journeys are offered at one quarter of current prices, according to a new report from Bloomberg New Energy Finance (BNEF) and McKinsey & Co.
Bloomberg describes the coming change as ‘the biggest innovation in automotive technology since Henry Ford’s assembly line’ because it will make taxis much cheaper than buses and trains, revolutionising the way commuters get to work.
However, it could also generate massive demand for cars from taxi providers in urban environments which would increase congestion.
BNEF analyst Colin McKerracher said: ‘If we do not manage this properly, the densest cities in the world will be pretty unpleasant places to live.’
Bloomberg estimates that self-driving cars could reduce taxi prices to €0.61 per mile (€0.98 per km) by 2025 by removing the need for a driver, compared to more than €2 per mile (€3.20 per km) today.
McKinsey & Co estimates accidents will also fall by up to 90% as human error us removed from the driving process.
Ford is among a number of manufacturers working towards autonomous cars and expects to offer them for use by ride-hailing services by 2021.
The news comes as a new report by PWC estimates the autonomous car market will be worth $54.9 billion (€50.3 billion) within five years.
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