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If Apple ( AAPL ), Tesla Motors ( TSLA ), Alphabet ‘s ( GOOGL ) Google and others succeed in making self-driving cars prevalent by 2040 and ride-hailing startups Uber and Lyft prosper, auto insurance may no longer be needed by many U.S. consumers, says S&P Global Market Intelligence. S&P released five reports this week analyzing the push into self-driving electric cars by Google, Tesla, China’s Baidu ( BIDU ) and others. While the business models of traditional automakers such as General Motors ( GM ) and Ford ( F ) will undergo big changes, the impact of self-driving cars on the $137 billion auto insurance industry and companies like Allstate ( ALL ) could be monumental, says S&P. “The advent of a totally driverless car threatens the core auto insurance liability business model,” said one S&P report. “A shift to driverless cars would theoretically shift the legal liability away from the driver, since the incidence of crashes would likely be reduced, and the liability in a crash would shift from human error to product liability, potentially reducing or removing the need for auto liability insurance.” Here are five other takeaways from S&P’s deep dive into self-driving cars and ride-sharing alliances. Noting Apple’s $1 billion investment in China’s ride-hailing leader Didi Chuxing, which has an alliance with Lyft, S&P said ride-hailing apps may eventually summon autonomous cars. Uber, the leader in ride-sharing, is losing money, says S&P. Both Uber and Lyft face “competitive markets and issues related to how to classify their drivers and operate within federal laws and local rules.” While Apple has not officially announced plans, it seems to be gearing up in automotive technology. “Multiple hires made since the beginning of last year, including former Tesla employees, indicate an interest,” S&P said. “We also note substantial increases in R&D and capex over the past few years.” General Motors, which in early 2016 invested $500 million in Lyft, intends to integrate autonomous driving technology from Cruise Automation once it completes its planned $1 billion purchase of that company. Lyft drivers are a potential customer base for GM’s upcoming Bolt electric vehicle, says S&P. Radio service providers such as iHeart Communications, formerly Clear Channel, will likely face intensifying rivalries versus Sirius XM Radio ( SIRI ) and Pandora Media ( P ), as well as Apple CarPlay and Google’s Android Auto. RELATED: Apple Gets Lift From China Ride-Hailing Service Investment Toyota Joins Apple, GM In Finding Ride-Hailing Partners Meet Uber’s Self-Driving Car, As Autonomous Race Heats Up . Scalper1 News
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