What could driverless cars mean for the economy?
There could be wider changes that come with more and more driverless cars on the roads. This raises some questions about how the economy could be affected.
For instance, if commutes become more enjoyable, will more people start to live further away from their workplaces? And when accidents happen, who will pay – insurers, or the companies that build the cars?
This video introduces these and other issues raised by driverless cars:
Bank of England's KnowledgeBank guide to how will driverless cars affect the economy.
There are 38 million cars in the UK which clock up a total of 300 billion miles a year. But modern driving is inefficient. The average car is only in use 5% of the time. Drivers spend 127 hours a year stuck in traffic in some parts of the UK. And at least 90% of car accidents are down to human error. Driverless cars could put an end to congestion, accidents and even private car ownership. But this leads to some important questions for the Bank of England. If human error is eliminated from driving, who will be liable for accidents? And who will pay for insurance? Will not driving mean we spend more time working? Leading to an increase in productivity. And if fewer people own cars, what does this mean for businesses linked to driving? Like car dealerships and petrol stations. And the economy as a whole.
The Bank of England takes an interest in developments like this which can have an impact on how we work and how productive we are overall. This can feed in to how fast the economy grows.
We monitor in particular changes in the insurance industry because we are responsible for regulating insurers in the UK to ensure that they operate in a safe and sound way.