The self-driving car reached something of a watershed in 2016. All of a sudden, it seems we're right on the threshold of autonomous vehicles transforming our transportation. I'd ask any engineer in 2015 when they thought we'd have full (i.e., SAE level 5) self-driving vehicles and the answer was always "ooh, that's another 20-30 years away." Fast forward a year, and all of a sudden that target has moved: BMW, Intel, Mobileye, Uber, Volvo, Ford, Delphi, and others have all set 2021 (or earlier in the case of Delphi) as the year by which steering wheels become optional.

The big breakthrough is down to the use of machine learning and deep neural networks, a field that has come along leaps and bounds in a relatively short space of time. For example, Nvidia will sell OEMs and tier one suppliers an open AI platform for automotive uses that leverages the company's GPUs and machine learning—tech that it ably demonstrated with its BB-8 technology demonstrator:

But along the way, the automakers and tech firms working on the problem have diverged into two groups: the ones who plan to get there in an incremental, stepwise fashion, and the others who plan to skip the intermediate step.

To explain, the Society of Automotive Engineers (SAE) breaks down autonomous driving into six different levels. (Perhaps confusingly, the National Highway Traffic Safety Administration also had a scale for self-driving vehicles that went from 0-4, however the industry has coalesced around the SAE scale of late, and that's the one we'll use at Ars.)

Drive a car with no traction control, electronic stability control (ESC), or antilock brakes (ABS)? Congratulations! You have a level 0 vehicle. Add some—or all—of those driver assists and it's now a level 1 car. The kinds of advanced driver-assistance systems like adaptive cruise control and lane-keeping, or blind-spot monitoring, that keep tabs on the driving environment to help the driver make for level 2 is where most of the industry is right now—even industry leaders like Tesla, Audi, or Volvo. And so the scale progresses, up to level 5, where human interaction isn't required to complete a journey.

Level 3 is the tricky one. Under most circumstances, the car will do the driving. But if it all gets too much for the computers to handle, control gets returned to the human. And as far as companies like Ford and Volvo are concerned, that's problematic. For one thing, driver assists are specifically being developed to be better than a human; things like ESC and ABS are literally life savers. For two, it means getting the attention of the human operator (who may be engrossed in a book or half asleep) and then safely returning control to them. Far better, some say, to simply pass over this intermediate stage and go for level 4 or level 5 autonomy.

Meanwhile, OEMs like Audi think they can make level 3 work. Audi's 2018 flagship A8 sedan promises to be the first true level 3 car on sale to the public, and it's believed that it will use cameras and image recognition to determine if the human behind the wheel is paying attention or not. Audi's system is also being designed to pull over safely in the event that the human isn't able to resume control.

Buying vs. renting

A second philosophical difference is also beginning to emerge in the industry, regarding whether or not you'll own or just rent these self-driving vehicles. Assuming Ford or Uber or whoever else gets its self-driving vehicles ready by 2021, they won't be vehicles you or I could go out and purchase. Instead, we're talking about fleets owned by the manufacturers, which we'll summon when needed, paying just for the ride.

Probably the biggest reason for this is the as-yet unresolved problem of insurance and liability. It is much easier for a company with deep pockets like Ford to own and commercially insure a fleet of autonomous vehicles, assuming liability for crashes, than passing those problems on to the end user. Volvo was first out of the gate to state that it would assume liability for its vehicles when in autonomous mode. "When you drive manually, the driver is responsible," CEO Håkan Samuelsson told Ars last year. "When it's automatic, we as the manufacturer are liable. If you're not ready to make such a statement, you're not ready to develop autonomous solutions."

Contrast that with Tesla's position—Elon Musk recently told journalists that Tesla won't consider itself liable in the event of a crash, likening the situation to being in a stuck elevator.

If we cast our crystal ball further out—20 or 30 years into the future—those different paths are all headed to the same place, and it's one where humans driving themselves will be in a distinct minority. Policy makers are salivating at the life-saving potential of autonomous vehicles; NHTSA blames human error for 94 percent of all crashes, and more than 35,000 people have been killed on US roads this year. It's not hard to imagine that restrictions on human drivers will start to appear, first on highways (like HOV lanes), and I can easily imagine ideas similar to London's congestion charge being used to discourage humans from driving themselves in cities.

"I don't think new vehicle ownership will even exist by then," Jeremey McCool, CEO of HEVO Power (a company that makes wireless charging systems for vehicles) told me recently. "Manufacturers will own the assets, and they'll be able to overcome the problems they're having with cost by having people pay premiums for a monthly service. That'll probably eliminate Lyft and Uber, because they're just a middle facilitator at that point."

What that means for the Ferraris and Porsches of the world, that build and sell vehicles that by design are supposed to engage and delight the driver, remains unclear.

The insurance industry is also in for a big change by then, explained Andrew Rose, CEO of compare.com. "If you don't wreck cars, why do you need insurance? It's a $200 billion industry that's going away in the next few decades."

Of course, that assumes a homogenous transportation ecosystem, something I'm less convinced we'll see for quite some time. The automobile comes with a deeply ingrained sense of freedom for many people out there, and any restrictions to that—like the idea of no longer owning a car but renting an autonomous pod—will sit badly with them. My colleague Lee Hutchinson expressed severe misgivings with the idea, citing the need to evacuate Houston in a hurry in the event of a hurricane. For that reason, and plenty of other edge cases just like it, I think we're looking at a much more multimodal transport future for quite some time.