WHAT PRICE SHOULD WE PAY FOR SAFETY ?
Let us say that we have two Automakers A and Z
And let us say that they develop competing self-driving systems
"A" has started earlier and has built up more experience, and eventually reaches a 6-Nines level of safety performance
Let us say that we have two Automakers A and Z
And let us say that they develop competing self-driving systems
"A" has started earlier and has built up more experience, and eventually reaches a 6-Nines level of safety performance
Let us define 6-Nines here as the condition where the expected safety level is 99.999999% and the risk of a serious adverse event like a death has declined to a chance of 0.000001% or 1 in 10,000,000 miles driven
"Z" has started later but has built up experience at the same rate over time, and when A reaches a 6-Nines level of safety performance Z is able to claim a 4-Nines level of safety performance
Which means that Z's risk of a serious adverse event has declined to 1 in 100,000 miles
Which means that Z's risk of a serious adverse event has declined to 1 in 100,000 miles
Z decides to ask the market to pay $600 for its 4-Nines system
What should be the relative value of A's 6-Nines system ?
Very simply, the numbers say that A's system is 100 times safer
- so it should be worth $60,000 on a comparable basis
What should be the relative value of A's 6-Nines system ?
Very simply, the numbers say that A's system is 100 times safer
- so it should be worth $60,000 on a comparable basis
If A sells it for $10,000 then the Buyers of Z's system will be paying 6x too much on a risk-adjusted basis
So we should study the real statistics when comparing the two
Taking on 100 times more risk with your life as the stake is generally not wise to do
So we should study the real statistics when comparing the two
Taking on 100 times more risk with your life as the stake is generally not wise to do
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