Self driving cars, hell or heaven for cities?

Let’s be clear beforehand, new technologies open opportunities but don’t shape futures, societies do !

We often tend to have an optimistic view of technology, and in the end it is normally true that technology advancements result in a better living for all of us. However, transitions are not necessarily smooth and often the introduction of a new technology has caused social pains.

This is not the fault of technology, but of our lack of willingness to confront the problem and design social and legal structures that could shape the outcomes that we envision. Avoiding confronting early the inevitable changes that the technology progress will bring, is at the root of this problem. It is as easy to hide and prohibit the new business models, new tech advancements as irresponsible. Doing so only leads to being hit by them and having to adopt the “de facto” standard because that has been developed abroad because it is too late, because when we finally surrender to the unavoidable, it will be too late. Resulting into much more than a missing opportunity, a loss in competitiveness and lots of pain.

Self driving cars will be no exception . We always have an optimistic view of this new technology. We envision self driving cars as an opportunity to get rid of car congestion in our cities. We all will share cars that will provide on demand rides at a very low cost. Transportation will be almost for free, ready available to everybody. Finally, pollution will be a nightmare of the past and our cities will be clean, with lots of green spaces recovered from city streets and cities will live a new renewal.

To good to be true? Yes, our cities could have this new renewal, but they have to earn it. Technology alone won’t bring it.

Let’s take a look at the economies that the electric self-driving car will bring to our cities.

Vehicles will more more a fix cost than anything else because to the shift to electric vehicles that have an extremely low cost of operation, because of their simplicity and efficiency compared to normal cars and because of the extremely low cost of the electricity needed to power them. Batteries remain the biggest problem. Their short life and high cost is what makes the cost of operation climb, but hopefully somebody will develop better and cheaper batteries soon.

Parkings won’t need to be in the same building or in close vicinity. You will be able to call cars and they will arrive in a short time, on demand. Also, you will be able to avoid paying a parking by just letting your car do rounds around the city while you are in the movies, in the theatre or out for dinner.

In general, the cost of transport will drop, particularly if new, more efficient and cheaper batteries come to the market.

This opens a new era of extremely cheap transport at any hour of the day or the night. This new economics will transform many areas of our lives and because of the radical advantages that it provides, this transformation will probably be fast.

The immediate implications are easy to guess. Taxi drivers will disappear and become something of the past, same as carriages with the advent of motor vehicles, but this time faster. Together with them bus drivers will also disappear. In fact there are already some bus lines in Holland and Helsinki attended by self-driving buses. Even economically more important that this will be the demise of delivery and truck drivers that will change completely the economics of distribution in cities.

Obviously, this means a lot of people, that will go really fast from having a nice income to not only being unemployed but whose competences will become suddenly obsolete, which means with serious difficulties for finding a new employment that could make use of these competences.

These new economics will also enable a large number of possibilities. Let’s mention and discuss the most obvious ones, reality will always surprise us anyway, but these ones seem pretty straightforward:

1. Shops will be affected to a large degree. We are already witnessing the trend towards a few flagship stores replacing many proximity shops. If delivery is costless, effortless and fast, this trend will accelerate, not only with big brands but also supermarkets and convenience stores. As we all can figure it out, this has large implications in terms of city life.

1. Parkings being skipped by ghost cars running through the city waiting for their owners to finish dinner, a meeting or the end of a movie. This is a dramatic consequence because will greatly increase traffic density. We will be talking not of cars with 1 occupant, but of cars with zero occupancy.

1. Even if marginal costs of transportation will be really low, cars will be expensive because not only the technology involved but also because of batteries. Many car manufactures are studying the possibility of pivoting their business model to a service company. Same as  Rolls-Royce did with jet engines, instead of selling them, they rent the engines to airlines who pay  by the hour. This same, will mean a big barrier of entry for any other company public or private that wants to operate in the market. We can imagine a future where buses are rented instead of owned by cities and on-demand services transportation services such as über, own their cars.

1. When we think of public transportation we always think of fixed routes. It is true that there have been some pilots of using the über, on-demand, model in public transport, but it seems harder to operate and manage than it looks and so far they failed. However, in an environment where all cars will be self driven, having only fixed routes doesn’t make much sense and we will see on-demand public transport raise in the city, particularly at night and in low density areas.

1. The other side of the coin is that being the marginal cost of transportation so low, it will make really difficult for public operators to compete with integrated private ones that manufacture cars and develop the technologies involved. This is already happening, for example if you use über pool it will often be cheaper than the equivalent public transportation.

These five possibilities can be summarised in two extreme scenarios. Any of them very unlikely, that’s true but extreme scenarios have the virtue to clearly show what could be the main points to act upon and which ones to avoid.

The first scenario describes a city almost without private cars, where transport will be a combination of traditional public transport, on-demand private and public, and lots of bikes. This will result in a city without pollution and with a lot of reclaimed space to streets that then will be used for parks, by citizens and city life.

The counterpoint to this scenario is one where traditional cars have been replaced by self driving cars. Ghost cars waiting for their owners will be running through the city, increasing traffic congestion. Private on-demand services will outcompete public services that will be forced to lower prices and therefore reduce their investments, resulting in degraded services that will spur even more the private ones. The demand of roads and parkings for ghost cars will soar.

Which of these two scenarios will represent better the future of your city?

This is a difficult question to answer. However, the future doesn’t happen in a vacuum, the future of cities is the result of what they built every day. Therefore, a good way to “see” the future of your city is to ask yourself some questions about the present of your city: 

• Is car sharing well stablished in my city?
• Are car sharing companies well regulated and have enough common spaces to park in the city, close to everybody?
• Are there enough segregated bike lanes available through the city?
• Did the city develop a culture of multimodal transport, including bikes or private cars dominate?
• Is it possible to go from any point to any other point in the city in a segregated bike lane or you are asked to risk your life in the midst of angry drivers?
• Do we have an innovative public transport authority that is always busy testing pilot projects or buses and bus lines are the same than one century ago?
• …

The answer to all these questions will clarify which present is your city living and from there, you can guess its immediate future.

Either cities take action and have a clear agenda and the will to move it forward or they will be run down by the fast pace of technology and entrepreneurs taking advantage of these new possibilities that self-driving transportation offers.

As always technologies bring good opportunities for the good, the bad and the ugly. As always markets will provide an efficient distribution, not the best one, not the one that fits any social goal, just an economically efficient one, the rest is on us ! Don’t blame markets for not doing our job !

For cities, it is time to act !