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Why the Rise of Driverless Cars Has Got Detroit Spooked

In just a few years, robotic cars have gone from prototypes that barely worked to a technology that auto executives think is poised to upend their industry.

Are modern car companies lumbering dinosaurs or fleet-footed innovators looking toward the next big, disruptive idea? At the moment, they seem to be both—while they boast huge revenues and have posted record profits in recent years, firms like GM and Ford also appear to feel that, on some level, the sun is setting on their business model. And they are scrambling to reinvent themselves as firms that provide all sorts of transportation options, from ride-hailing services to cars that drive themselves.

As the cover story in the most recent issue of Fortune puts it:

For 125 years U.S. auto companies made their money on the manufacture of motor vehicles. Now they must be in the business of ride-hailing apps, shuttle buses, 3D maps, and computers on wheels that drive themselves. They’re no longer automotive companies either—they’re now calling themselves “mobility” companies.

This change has come about with dizzying speed—a decade ago, robotic cars only existed in research projects funded by DARPA. Most of them barely worked. Today they represent such a threat to the car industry’s status quo that Ford’s president and CEO, Mark Fields, has said the company must “disrupt itself” if it is to survive. Earlier this year GM bought driverless-car startup Cruise Automation for $1 billion. An avalanche of deals ensued:

In May, Toyota struck a partnership with Uber, Volkswagen invested $300 million in ride-hailing company Gett, Apple poured $1 billion into China’s Didi Chuxing, and Google partnered with Fiat Chrysler to outfit 100 Pacifica minivans with self-driving technology.

But drawing a line between nervous car company executives and a wholesale change in how the average driver approaches owning and driving a car could be a bit simplistic. Types of automation like collision avoidance and adaptive cruise control are indeed trickling into midrange cars. Luxury models come with self-parking features, and if you’re brave enough to engage Tesla’s Autopilot, you can experience the (sometimes scary) cutting edge of driverless technology that’s already available to consumers.

But the gap between far-sighted entrepreneurs and everyday drivers is large. One startup mentioned in the Fortune piece, called Zoox, is apparently building “bidirectional robo-taxis” that the company’s founder says aren’t cars at all, but “what comes after the car.” Zoox is apparently raising north of a quarter-billion dollars to make its … conveyance a reality. This kind of “post-car” outlook is popular in Silicon Valley, but people may not be ready for such visionary modes of transportation:

In May, Google posted job listings for test drivers in Arizona, which tech bloggers painted as a dream job. Who wouldn’t want to make $20 an hour sitting in a car doing nothing for eight hours a day? But the social media reaction from nontechies was a glimpse into the public’s fears of robot cars. “You’re gonna have to pay more to get me in that tin can with a mind of its own,” wrote one Facebook commenter.

The arrival of autonomous cars can't come soon enough, given their very real promise for reducing fatalities, injuries, and property damage. But they have a long way to go yet before they have truly arrived.

(Read more: Fortune, “Rebooting the Automobile,” “Drivers Push Tesla’s Autopilot Beyond Its Abilities,” “Tesla Knows When a Crash Is Your Fault, and Other Carmakers Soon Will, Too”)

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