While the jury is still out on how fast a wave of autonomous vehicles (AVs) will wash over us, there’s no question about a demographic tide that’s sweeping the United States and could create strong demand for driverless cars. According to the U.S. Census Bureau, the number of Americans aged 65 and older is expected to nearly double by 2060 and account for 23 percent of the nation’s population, up from 15.8 percent today. This population segment is driving the growth of age-restricted and active adult communities, where at least one member of the household must be above 55, according to Harvard University’s Joint Center for Housing Studies.
Autonomous vehicles are poised to play a uniquely valuable role in providing greater mobility for residents in these communities. While the Center noted that the vast majority of Americans between the ages of 50 and 64 identify themselves as drivers, that percentage steadily declines with age. Vehicles equipped with autonomous technology could offer a lifeline to an aging population that finds it increasingly difficult to sustain the demands of a mobile lifestyle.
One start-up is already homing in on this market. By rolling out a ridesharing platform that uses AVs to ferry residents around retirement communities, this company providing mobility options to the housebound and giving residents who can drive a potentially safer alternative. Retirement communities are ideal for AVs because they typically have slow speed limits and less congestion than typical urban or suburban roadways.
While seniors may potentially benefit from autonomous technology, there are still some challenges to iron out. States have taken a patchwork approach to regulating AVs. Some, like California and North Carolina, have issued clear regulations or executive orders, while others have yet to weigh in. Beyond regulatory uncertainty, retirement communities that embrace AVs may open themselves to potentially new liability exposures. Further, the condition of the roads and roadway infrastructure of these communities will be increasingly important. As the International Road Assessment Programme (iRAP) noted, “Infrastructure is likely to play a greater proportional role in future crashes” of AVs because these vehicles require clearly and consistently marked signs and road markings to function effectively. The design of the roads also matters: AVs perform better with signalized intersections rather than roundabouts (aka traffic circles), iRAP reported.
If retirement communities begin to invest in “smart” road infrastructure that can wirelessly communicate with AVs, there may be additional liability exposures if that infrastructure fails (or is hacked), resulting in an accident.
As the Harvard Business Review notes, AVs can also struggle when dealing with unanticipated situations, like emergency response vehicles racing a patient to a hospital—a likely scenario in a retirement community. Another unknown is how elderly drivers in such communities will react to driverless vehicles. Common conventions, such as making eye contact or waving at other drivers to yield the right-of-way, don’t apply when engaging with an AV—a situation rife with potential for misunderstanding on both the human and AV side.
Maintaining a fleet of ridesharing AVs will require regular software and firmware updates to ensure the vehicles have the latest safety features and improvements. Telematics data will also be required to help stakeholders understand vehicle performance when issues or accidents occur.
A safer, more social future for seniors
While retirement communities will need to assess their risk exposure as they open their roads to autonomous vehicles, there’s cause for optimism. Despite some high-profile accidents, AVs are likely to be a safer alternative to human drivers. If they’re deployed in retirement communities, they could reduce traffic congestion and road accidents. They could also provide a critical lifeline to seniors who want to stay engaged in community activities but are unable to drive themselves.
At Verisk, we’re committed to continuing the conversation around the emergence of AVs and their implications for the insurance industry. ISO is currently considering hosting a roundtable of insurance professionals to discuss issues related to autonomous vehicles and insurance. If you would like to participate in the roundtable or simply share your thoughts, don’t hesitate to email me at Kevin.Poll@verisk.com.