The Market for Driverless Cars Will Head Towards Monopoly

The Market for Driverless Cars Will Head Towards Monopoly


The market of driverless cars heads towards monopoly. Currently, the demand for driverless cars in the market is high despite the low supply. Moreover, the concept of driverless cars keeps attracting the interests of organizations such as Alphabet due to its uniqueness. The company intends to introduce its minivans into the fleet of cars they produc[1]. The prohibitive costs of producing driverless cars, the infrastructure, and the technology required to sustain production are advantageous to organizations that seek to dominate the industry[2]. As such, the industry is likely to become a monopoly because it has high barriers to entry. Likewise, the production process requires good economies of scale to be feasible. It is because only a few numbers of firms with a large capital base will afford to join the industry.

The autonomous vehicle industry is likely to be a monopoly because the products offered are unique. The car is a unique product that is revolutionary because it will allow drivers to relax and take a nap if they choose[3]. Therefore, the exceptionality of this commodity will result in minimal traffic congestion. It is because motor vehicles will have software that ensures that the inconvenience caused by other motorists is minimal[4]. At the same time, autonomous cars will increase ridesharing and decrease the level of traffic in different cities around the world. Also, self-directed motor vehicles are very reliable because they are safer for drivers. Consequently, the creation of safety autonomous vehicles combined with reliable software will create an exceptional product.

Moreover, a monopolistic industry in the driverless vehicle business is feasible due to the high barriers of entry and the prohibitive costs production. It will be an obligation for organizations in the industry to invest in the latest forms of technology. As such, this will assist such companies in ensuring that they create safe and reliable products[5]. As a result, autonomous vehicles may become the preserve of organizations with a large capital base. Furthermore, companies that have centralized facilities and productivity advantages will maintain motor vehicles[6]. It is also expected that economies of scale will determine the production of autonomous vehicles[7]. However, organizations with a poor record of reliability and fewer resources may not have the opportunity to participate in the industry. For that reason, the industry will become a monopoly because of the high standards enforced by regulators, to limit the entry of firms into the autonomous vehicle industry.


The market for independent cars is likely to gain domination because the production of autonomous vehicles will use advanced technology. In most cases, only a few firms will afford advanced technology. Moreover, most large firms incorporate the use of prediction machines that are helpful in data collection to predict unplanned circumstances. Similarly, large organizations are likely to record better profits compared to other companies based on reliability and safety. Since large organizations will be able to register better safety levels, it is expected that regulators will eliminate firms with poor safety records. Besides big corporations have centralized facilities that maintain autonomous vehicles and analyze technological developments.



Reference List

The Economist. (2019). The Market For Driverless Cars Will Head Towards Monopoly. [online] Available at: [Accessed 22 Mar. 2019].

[1]e Economist. (2019). The market for driverless cars will head towards monopoly. [online] Available at: [Accessed 22 Mar. 2019].




[5]The Economist. (2019). The market for driverless cars will head towards monopoly. [online] Available at: [Accessed 22 Mar. 2019].