NCPA - National Center for Policy Analysis

Autonomous Vehicles Will Have Tremendous Impacts on Government Revenue

July 10, 2015

Two decades from now, there are likely to be a number of Americans who travel using autonomous vehicles (AVs). Though AVs will reduce cash flows to governments when speeding tickets, DUI's, and towing fees are ostensibly eliminated by driverless systems, this was only one side of the coin;  AVs will also increase safety and mitigate inefficiencies in transportation systems, thereby saving government and taxpayers big bucks, writes Kevin DeSouza and Kena Fedorshak for the Brookings Institute.

AV's stellar track record for safety provides numerous benefits:

  • Safer than human drivers: In 2014, motor vehicle accidents claimed 32,675 American lives. AV systems will undoubtedly eliminate most of these casualties. The resulting transportation environment will meet safety goals that state and federal agencies have long strived towards.
  • Lowering public cost: 7 percent of vehicle crash costs are paid for by public revenues. Further disambiguation reveals that federal entities cough up 4 percent of this revenue while states and localities provide the remaining 3 percent. It is not far-fetched to assume that self-driving cars will completely eliminate these expenditures, thereby saving taxpayers an estimated $10 billion each year.
  • Eliminate Inefficiencies: Congestion and road damage waste valuable resource, with a quantified the financial impact at $100 billion. While limited funding and poor policies have contributed to the sorry state of American transportation infrastructure, self-driving cars will likely resolve many of these issues without government intervention.

Even if the public sector refuses to innovate, government entities will save big bucks from the impending driverless car revolution. Billions will be saved as a result of increased safety and the reduction of transportation inefficiencies. The future is bright for autonomous vehicles.

Source: Kevin C. Desouza and Kena Fedorshak, "Autonomous vehicles will have tremendous impacts on government revenue," Brookings Institute, July 7, 2015.


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