Fixed Income Strategies

Self-driving cars could change the way you get around in retirement

Key Points
  • As automotive companies race to develop and test new self-driving technologies, one company is in the process of rolling out an autonomous ride service to retirement communities.
  • Self-driving cars may radically change how we live in retirement, enabling us to still get around long after our bodies have slowed down.
  • But there are special considerations that need to be worked out before the concept hits mainstream, such as who escorts the elderly while they travel and how insurance and other needs are attended to.

At The Villages retirement community in central Florida, there are approximately 125,000 residents and about 750 miles of road.

And by the end of this year, those streets are slated to have a new service to help its residents — ages 55 and up — get around: a ride-sharing service using self-driving cars.

"Retirement villages are just the perfect first place we see for autonomous driving," said Oliver Cameron, co-founder and CEO of Voyage, the company that is bringing the autonomous ride-sharing services to the community.

"We help people who need transportation improvement every single day," Cameron said. "It's also a big market. It has tons of people."

The Villages, Florida
Luke Beard, Voyage

Autonomous vehicles are still in the early stages of development. Many major car brands, as well as other transportation-related companies, such as Waymo and Uber, are working on developing and testing self-driving vehicles. Select U.S. cities are hosting pilot programs where the technology is being used on the roads.

Some see autonomous vehicles as a potential solution to the unique transportation issues retirees face. Individuals who are aging, facing more difficulty getting around and driving at night, can use these services and keep their ability to get around intact.

Voyage's fleet

Voyage, a venture-backed company, plans to formally launch its ride-hailing service in The Villages, about 57 miles northwest of Orlando, by the end of this year.

The company has been in testing mode at that location since January.

To use the service, a resident would first have to download Voyage's app. Similar to other ride services, such as Uber or Lyft, they would then have to push a button on their phone to summon a car. The difference here is that the ride that shows up for them is a fully autonomous vehicle that will take them from point A to point B, Cameron said.

This is the second retirement community in which Voyage has deployed its service. The first retirement community, also named The Villages but located in San Jose, California, has about 4,000 residents. Voyage began providing its services to that community, which is not affiliated with the Florida retirement community, in late 2017.

Voyage taxi in The Villages, Florida
Luke Beard, Voyage

Like most of the automotive industry, Voyage's rides currently include human supervision to make sure the rides go well. The company currently has two people in the car — one behind the wheel and another monitoring the software — at all times so that a human can take over if necessary.

But the company is building the cars and its technology with the idea that the cars will someday be fully autonomous.

So far, the feedback from retirees who have tried the service have been positive, Cameron said.

"The general opinion of senior citizens is that they are afraid of cutting-edge technology," Cameron said. "We see almost the opposite. It's either a state of excitement — they tell their grandkids about getting in an autonomous car — or it's just a complete non-issue."

Retirement mobility

Voyage is currently targeting a $1-per-mile price point for its services. The services currently only run in the retirement villages, which are designed to be one-stop shopping for all your health and entertainment needs.

Those costs could potentially offset the money retirees spend on their own cars, including maintenance, gas and insurance.

For retirees living on a fixed income, that could be an incentive to adopt the technology.

But self-driving cars are still in the very early stages of development, which means limited access.

"The chances for someone to experience this technology are very limited at this point," said Greg Brannon, director of automotive engineering and industry relations at travel organization AAA.

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AgeLab at the Massachusetts Institute of Technology has been researching for years how drivers of all ages respond to driving technology.

One of its prototypes — called Miss Daisy — is a shiny red 2001 Volkswagon Beetle that sits in its Cambridge, Massachusetts, laboratory. The car can be used to simulate driving experiences while measuring a driver's physical reactions.

That includes evaluating a driver's skin for sweat- and pulse-rate variation or tracking their pupils to get a sense of their spatial perception.

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Put together, all the information gathered serves as a "lie detector on wheels," said Joseph F. Coughlin, director of the AgeLab and author of the book "The Longevity Economy."

The lab is testing five of its own vehicles and tracking 25 Teslas on the road. For both experiments the participants range in age from their late teens and early 20s all the way to their mid-70s.

Older drivers have shown a willingness to use technologies when there's a demonstrable safety or navigation benefit, according to Coughlin.

When it comes to autonomous vehicles for retirees, there are some key questions that still need to be answered, Coughlin said.

"We are so enamored with the George Jetson idea that the car is going to pull up, you're going to jump in, and the car is just going to whiz you away," Coughlin said.

But what we really need to think about is how the elderly who cannot drive will interact with the vehicles.

"The older people who can't drive — whether it is a cognition issue, health issue, physical disability issue — who gets them in the car?" Coughlin said. "And if your mom's not cognitively well enough to drive, does she ride in the robot car by herself?"

Addressing the big questions related to infrastructure and the technology could take years to solve, according to Coughlin.

Consumer demand

Many consumers ask about the self-driving technology, according to AAA's Brannon.

But despite their curiosity, consumers are hesitant about fully autonomous vehicles. That only increases when accidents or other mishaps happen, AAA's research has found.

After one pedestrian died after getting hit by an autonomous Uber car earlier this year, consumer confidence declined.

Almost three-quarters — 73 percent — of American drivers surveyed by AAA this year were too afraid to ride in a self-driving vehicle, up from 63 percent in 2017.

And how soon autonomous vehicles will be adapted into the mainstream is "the billion-dollar question," Brannon said.

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Companies such as Waymo, formerly Google's self-driving car initiative, have been running pilot programs with these technologies for years.

Other issues — such as whether consumers will be able to buy the self-driving cars and purchase insurance to cover them — need to be solved before broad commercialization happens.

"Before we see any widespread adoption of the technology, I think we've got many years to think about it … [and] what it's going to mean for U.S. drivers, particularly the aging segment," Brannon said.