In 1898, just before the dawn of the automobile age, delegates from around the world came to New York for the world’s first international urban planning conference. One topic dominated the discussion. It wasn’t the effects of the coming car revolution on urban land use, the need for gasoline stations or the implications for economic development. It was horse manure. At that time, Americans used roughly 20 million horses for transport, and cities were drowning in their muck.
But we shouldn’t mock our forebears because our current planning debates are just as rooted in the present, just as ignorant of the oncoming avalanche of changes. As the delegates in New York obsessed over horses when they should have been thinking about cars, our policy wonks obsess over cars when they should be thinking about autonomous vehicles.
It’s widely expected that AVs will be cheaper to operate and travel faster than cars; be fleet-owned (individual ownership won’t be worthwhile if AVs are both affordable and guaranteed to arrive promptly); and mostly use electric and/or hybrid power.
Given these assumptions, let me sketch out a few high-level implications.
Fleet ownership of AVs could reduce the number of cars on the road by 60% to 90% due to more efficient usage and, consequently, reduce car sales by an equivalent percentage. Many of the 1 million jobs in U.S. auto manufacturing will probably disappear.
More than 2.5 million driving jobs (there are 1.7 million truck drivers, 650,000 bus drivers and 230,000 taxi drivers — about 2% of the U.S. workforce) will also be eliminated or transformed. In terms of the resulting human disruption, remember that all of these workers are part of families and communities; the loss of their jobs will produce a ripple effect.
On a positive note, AVs will make our roads safer and bring major savings in healthcare and auto repair. About 33,000 people die each year in auto accidents. In 80% of the cases, the cause is alcohol consumption, driving in excess of the speed limit or a distracted driver. Computers should have none of these problems. Highway accidents have direct costs of about $240 billion a year and more than $800 billion a year if quality-of-life issues are included. AVs have the potential to eliminate most of these deaths and costs.
Relatedly, the automobile insurance industry (which now has revenue of about $200 billion) will shrink dramatically. Fewer accidents will mean fewer claims and lower premiums. The benefit to the economy from these savings could be $400 billion to $1 trillion a year, and should be reflected in lower transportation costs.
More good news is that land currently tied up for parking can be repurposed for other uses. Again, assuming expanded fleet ownership and less individual ownership, AVs won’t need to park in city centers. Of course, changes in land use won’t benefit everyone equally. AVs could facilitate a significant shift to housing away from city centers, thereby reducing central urban property values and increasing values in outlying areas. For example, New York has several neighborhoods not accessible to mass transit, but AVs may open these areas to development.
In 1898, the U.S. population was about 74 million, and there were only 800 registered cars. By 1927 — less than 30 years — the U.S. had more than 19 million cars on the road, and more than 55% of American families owned one. The 20th century shift to automobiles, within the span of a normal human life, destroyed many existing sectors (anything to do with maintaining 20 million horses, for example). Entirely new laws, regulations and infrastructure (roads, tunnels and bridges suitable for motor vehicles, gasoline distribution and much else) had to be created.
The delegates to the 1898 urban planning conference failed to recognize the developments that would transform their world. Today’s transportation infrastructure discussions — about building a $10-billion bus terminal in New York, or a $70-billion high-speed rail system in California — may prove similarly shortsighted. These transportation mega-projects don’t seem to take AVs into account. Yet by the time these initiatives are completed, AVs will be a major part of the transportation landscape. AV minibuses, providing home to office direct service, may completely replace traditional buses. And there’s little doubt that AVs will radically change the economic calculations and assumptions that make high-speed rail projects seem worthwhile (i.e. the speed and cost of travel by conventional car).
Policy leaders need to seriously consider winding down vocational schools that teach bus and truck driving as a career. Cities need to start rethinking their housing policies. And that’s not all. As AVs facilitate a shift to electric and hybrid vehicles, highway trust fund revenue, which comes from the gasoline sales tax and pays for most federal road work, will collapse. How will road repair be funded going forward?
All sorts of technological, legal and regulatory barriers must be addressed for AVs to deliver their full potential. But these barriers aren’t higher than those encountered in the shift from horses to conventional cars. Autonomous vehicles are coming. We need to stop thinking within the limitations of the past and focus instead on the tectonic shifts of the future.
Steven Strauss is a visiting professor at Princeton University’s Woodrow Wilson School of Public and International Affairs. He has advised senior public sector leaders in Europe, the Middle East and the United States.