Even if prices were lowered by a few percent for some goods thanks to cheaper shipping, that's little help when you have no source of income. This will only exacerbate the demand-limited economic slump we're currently experiencing.
But you are right that it would increase economic inequality.
The only reason self driving tech won't be commoditized will be regulatory barriers. You can imagine why entrenched interests would lobby for such.
If there is competition, then it is true that driving down food/commodities prices will create value for lower income households. But a solid portion of that value will still accrue to the companies running the transit networks using fewer people.
Google has spent years trying to enter the field of self-driving cars. So has Uber. Would not the inherent difficulty they are encountering be a barrier to entry.
I'm not arguing for throwing regulations around willy-nilly. I'm not arguing for regulations at all. I don't know enough to do that with any confidence. I'm just saying that in asking the question "Should we use the force of the state to handle some of the effects of this?", the probability of this increasing income inequality is worthy of serious consideration.
From an epistemological perspective no one does. No one person in this world contains the knowledge needed to manufacture a modern day pencil from scratch.
I don't think the term "income inequality" accurately describes the problem. Someone growing richer doesn't mean someone else had to become poorer. The problem more accurately is that poor people are poor.
In the beginning. Then due to economy of scale (and government regulations), it will be controlled by two huge companies, owning all IP, making any inroads close to impossible.
Think of when the newest major computer manufacturer was founded.
How would one of the conglomerates stop that besides competing on price or erecting regulatory barriers?
It's a commodity market (so little "customizing" benefit), crazy IP with feedback loop (Google and Tesla have more street data than anyone else, so they can perfect their algorithms. As their algorithms are better than anyone else's, people buy there hardware, which gives them more data, ad infinitum. Breaking into such a market will be getting harder and harder for that reason), and quite likely some kind of (strict but bureaucratic) safety regulation.
If companies could squeeze more money out of customers why wouldn't they just do so right now by raising prices?
They only have to keep prices the same or negligibly lower in order to profit from this proposal.
Personally, I imagine a lot of companies will use that extra money to buy out, take over, or otherwise eliminate their competition. I doubt the consumer will win.
Really, anytime a major player has cash on hand, they're going to buy out competition, either through acquisition or buying an equivalent product. When Oracle had liquid assets, they buy Sun. ATT and Verizon consolidated the cell phone market down to ATT and Verizon (and even attempt to merge down one step further). DeBeers buys every diamond producer on the market.
And so long as the cost to get into the industry is high (the up-front cost of a driver is effectively 0, whereas AI will be non-0), and the incumbents have the ability to drop their prices lower than any new startup (thanks to the efficiencies of scale), serious new competition will be rare.
Even considering all that, the cost for shipping something is remarkably low to begin with. $400 for an 40' shipping container worth of goods over 300 miles? Drop the driver from the equation entirely, and that cost would only go down by about $100. As a point of reference, a 40' shipping container full of bananas is worth in excess of $58,000 (1000 boxes per container, 100 bananas per box, $0.58 per banana).
Such is the nature of competition, and one of the basic reasons why it works. Frankly, I'm surprised it still needs to be explained.
1) Challenges that come about due to an aging population
2) An overall slow down in innovation (Cowen's "Great Stagnation" hypothesis)
Innovation is slowing down because companies are preoccupied with irrationally slashing labor expenses, and R&D tends to be quite expensive so it gets cut significantly. The result is less income for consumers, who in turn buy fewer goods, which ultimately leads to even more cuts for labor.
Do we see massive price drops whenever any company outsources their call centre to India? Nope, the price stays the same and the execs pocket the difference in bonuses.
This only works if the seller has monopoly pricing power. Otherwise gas would be $5/gallon all the time.
Do we see massive price drops whenever any company outsources their call centre to India?
Massive, no, but the prices of most things other than housing, health care, and education have in fact been dropping.
Only to the extent they are resistant to market forces.