2 Ways Alphabet Inc Could Improve the Google Car (GOOGL)

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If we were to plot the graph of the likelihood of Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL) leading the driverless car race, my guess is that we’ll end up with a sine wave.

2 Ways Alphabet Inc Could Improve the Google Car (GOOGL)

At the beginning of the month, a survey revealed that a respectable proportion of consumers would be interested in owning a Google car.

Less than a week after that, Bloomberg reported about how Google Car is losing its first mover advantage in the driverless car race. Now, it’s all about news of the biggest Google car crash so far.

The latest crash occurred after a human driving a commercial van violated the red light. While the crash was completely the fault of the human driver, the question now is whether driverless cars will bring any significant safety improvements. It’s highly unlikely that the government will outright ban humans from driving any time soon.

Google was quick to point fingers at the human driver, and rightly so. And it used the situation to solidify its case for a future in which all of our driving is conducted by robots. That’s unlikely to happen soon. With that in mind, it is time for Google to start rethinking the way Google car works.

Rethinking the Google Car

When I started driving, I remember being taught to see myself as the only sane driver on the road. With that mindset, I would go for safety, even if I were the one driving correctly. In other words, I wait for a red-light violator to pass before proceeding.

Because let’s face it, what matters at the end of the day is how much safer the road becomes on the overall basis after the introduction of driverless cars — and not “Are driverless cars safer in themselves than human drivers?”

Google boasts that most of the accidents involving a Google car have mostly been the fault of human driver. But, in the real scheme of things, that’s not safety. The instruction for autonomous cars should be, “Don’t ever get into a crash, either you’re right or wrong.”

If the Google car had that instruction embedded in its DNA, perhaps this crash wouldn’t have happened. And this would have been a better thing to boast about. Granted this will only make the road safer, and not actually eradicate accidents.

Still, since Google is the most advanced in the road testing of driverless cars, these incidents give it an opportunity to build the safest autonomous car — or platform, if a platform is all it wants.

If it can’t teach its autonomous cars to act as if it’s the one sane driver on the road, then it should consider another strategy.

Google Should Consider Semi-Autonomous Cars

The Bloomberg story referenced above cited a source who had worked on the Google car project, saying Alphabet Inc. is losing out because it’s too ambitious with its driverless car dream. The latest crash partly supports this, as it shows that fully autonomy only makes sense if the cars understand human drivers or the roads only contain fully autonomous cars.

Auto insurance

As the image says, the “fender bender factor” is the most popular reason for car insurance claims. The implication is that it is the most popular type of accident. Any company who is able to reduce the amount of fender bender claims will be popular among consumers, as it would mean lower premiums for them. You wouldn’t need a fully autonomous vehicle to reduce that. A semi-autonomous vehicle will be just fine.

In fact, with Google’s wide reach in the internet industry, building a car that reads situations — like speed limits, red-lights, reckless driving — and makes sure that the driver adjusts accordingly gives it a better chance to change the automotive landscape than its current strategy.

With such an approach, the part in the image above that says, “Every time you get behind the wheel, you never know what is going to happen” will no longer have big influence on premium calculations, as things will become more predictable, since cars would be cover drivers’ “blindsides.”

Yes, the current Google car is a clean driver. However, what consumers need is an autonomous car that can read situations as well and improve overall highway safety.

This is one of the few places I have problem with Alphabet as a company. On an overall basis, though, I would have its stock in my portfolio.

As of this writing, Chris Adeyanju did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/09/google-car-alphabet-driveless-cars/.

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