Berkshire Hathaway 2017 Annual Meeting Audience Question # 2

Driver-less trucks are a threat to BNSF and GEICO

Warren Buffett:

We will now shift over to the analysts and Jonny Brandt.

Jonathan Brandt:

Hi, Warren. Hi, Charlie. Thanks for having me.

You’ve addressed the risk of driverless cars to GEICO’s business. But it strikes me that driverless trucks could narrow the cost advantage of railroads, even if the number of crew members in a locomotive eventually declines from two to zero.

Is autonomous technology more of an opportunity or more of a threat for the Burlington Northern?

Warren Buffett:

Oh, I would say that driverless trucks are a lot more of a threat than an opportunity… … to the Burlington Northern.

And I would say that if driverless cars became pervasive, it would only be because they were safer. And that would mean that the overall economic cost of auto-related losses had gone down, and that would drive down the premium income of GEICO.

So, I would say both of those… and autonomous vehicles… widespread… would hurt us if they went… if they spread to trucks, and they would hurt our auto insurance business.

I think my personal view is that they will certainly come. I think they may be a long way off, but that will depend. It’ll probably, frankly, depend on experience in the first early months of the introduction in other than test situations.

And if they make the world safer, it’s going to be a very good thing, but it won’t be a good thing for auto insurers.

And similarly, if they learn how to move trucks more safely, there’s a… tends to be driver shortages in the truck business now… it obviously improves their position vis-à-vis the railroads.

Charlie?

Charlie Munger:

Well, I think that’s perfectly clear.

Warren Buffett:

Finally, approval. All these years.

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