Autonomous self-driving cars have become part of a hot tech trend that is proving to be a major business opportunity for digital companies. As the UK has allowed driverless cars on public roads last month, the local market is likely to receive a stimulus to further develop this interesting market. Acquisitions and exits in this field have been minor thus far, but the technology is likely to explode in the near future, providing significant activity for business transfer agents. The UK’s tech hubs, such as London and Bristol, backed by local corporate finance, will certainly be paying close attention to this growing segment, although some questions regarding logistics still remain.
Following in the tracks of Japan, Germany, Netherlands, Spain and four US states (California, Florida, Nevada and Michigan), driverless cars can now be tested on public roads in the UK. The UK government has set aside £19 million for four pilot schemes to aid the development of the technology although, a test driver must be responsible for any automated car until the technology matures. For this testing phase at least then, critical questions such as who is to blame if a driverless car is involved in an accident or commits a traffic violation – exceeding the speed limit or going through a red light for example – are answered. The upshot is that the UK government estimates that driverless car technology will be an industry worth £900 billion by 2025 and is therefore seeking to be a key player, attracting investment in the country and its automotive industry in the process. Additionally, governments have vested interests in supporting the development of automated car technology as it promises to deliver some game-changing non-monetary benefits for broader society.
Mobile phone usage while driving is universally banned but as connectivity in cars increases, so too do the concerns over drivers being distracted and thus not fully in control of their vehicle. However, automated driving would not only resolve the issue of distracted driving but also be especially beneficial to the economy as business users can work (or just relax) whilst out on the road. In turn, (driverless) car rental would become a more appealing alternative to public transport.
Driving licenses would clearly not be required by owners of automated cars, saving millions in administrative and policing costs although the burning question about insurance liability still remains. At this stage, however, the (UK) government will later give guidance on how MOTs (the annual vehicle safety check in the UK) and car insurance will be affected by the technology.
There are of course negatives associated with the development of driverless cars such as the loss of driving jobs, the insurance liability conundrum and the removal of driving for enjoyment. The latter naturally poses a major problem for manufacturers of cars which appeal to keen drivers. However, the pros certainly appear to outweigh the cons as far as governments are concerned and so the automotive industry is ultimately facing yet another challenge with policymakers as it already does on the subjects of connectivity, safety, emissions and electric vehicles.
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