Loss of peripheral vision can actually be more dangerous than loss of central vision because you run the risk of hitting people, cars, phone poles etc that you just don't see. Patients with moderately bad macular degeneration often drive in very familiar places (although they're technically not legal to do so) and we (eye care providers) don't get too tensed up about it. But bad peripheral vision is another issue altogether.
yes loss of peripheral vision effects driving. A significant loss of peripheral vision will mean you see less of your surroundings and could cause problems not just with driving, but with other tasks. In the U.S. state DMVs have driving restrictions based not only on visual acuity, but also visual fields (which takes peripheral vision into account).