The Fuse

What Will Autonomous Vehicles Mean for New Infrastructure Projects?

by Paul Ruiz | @pmruiz | November 21, 2016

With such a significant renewed national focus on mass transit and infrastructure, some in the transportation and energy communities are wondering how new autonomous vehicle (AV) technologies, catalyzed by the rapid adoption of ridesharing technologies, will impact future demand for mass transit.

The unexpected victory of President-elect Donald Trump this month overshadowed other major election developments, including the approval of billions of dollars in new mass transit and infrastructure projects across the nation. In San Francisco, voters approved a plan to invest $3.5 billion in the Bay Area Rapid Transit (BART) system, electing to raise property taxes. Voters in Washington, D.C., Atlanta, and Los Angeles all approved similar measures. Of the 27 ballot initiatives tracked by Smart Growth America, a transit advocacy organization, 19 passed, with voters supporting over $150 billion in new mass transit projects nationwide.

At the same time, President-elect Trump has promised to make building U.S. infrastructure one of the signature initiatives of his administration. Late last month, his campaign released a $1 trillion proposal to invest in infrastructure, relying on Congress to authorize $137 billion in tax credits for builders of roads, bridges, and railways. That distribution of government seed monies—provided to private companies and then passed on to low- and middle-income wage earners—is central to the President-elect’s domestic agenda.

With such a significant renewed national focus on mass transit and infrastructure, some in the transportation and energy communities are wondering how new autonomous vehicle (AV) technologies, catalyzed by the rapid adoption of ridesharing technologies, will impact future demand for mass transit. This question is especially pertinent as currently nascent AV technology enters a period of potentially rapid growth. AVs may fundamentally reshape the built environment and restructure urban and suburban travel patterns in ways that are still not fully understood. As the country makes major investments in mass transit and roads, new research sheds light on the practical implications of transformative technologies, such as the growth in AVs, on new infrastructure projects.

Autonomous vehicles to make travel cheaper

Estimates projecting autonomy’s impact on consumer transportation costs are released with some frequency, and often vary in optimism for the technology’s public deployment. Within the next decade, vehicles utilizing ridesharing capabilities stand to generate the most savings because riders will be able to pool costs as they journey along similar or shared routes. Although shared AVs could induce greater demand for travel, studies of AV deployment suggest most will be equipped with advanced powertrains, using electricity or natural gas instead of gasoline. With the elimination of the human driver and expensive petroleum-based fuels, savings could be more than 75 percent below current costs.

An October 2016 report jointly released by Bloomberg New Energy Finance and McKinsey and Company finds that self-driving vehicle technologies will significantly drive down travel costs by 2025, and bring “seamless mobility” to an estimated 200 million city dwellers by 2030. Bloomberg and McKinsey’s researchers say the operating costs for battery electric-powered AVs in the United States, for example, will be 67 cents per mile for individual riders in 2025, compared to the current cost of $2.85 per mile for a human-driven vehicle. The cost reductions will be even steeper for those who pool, averaging between 17 and 29 cents per mile in 2025.

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Ride-sharing services are already giving consumers new transportation options. Discounted services such as UberPool and Lyft Line, launched within the past two years, are targeted in part toward urban commuters who are willing to share rides. These options stand to become increasingly competitive with traditional bus routes and rail lines, which represent the majority of passenger public transit trips in the United States.

Depending on the pace at which AV technologies are adopted, lower travel costs could engender greater demand in certain urban areas, especially as mobility becomes a more realistic option for more people.

Depending on the pace at which AV technologies are adopted, lower travel costs could engender greater demand in certain urban areas, especially as mobility becomes a more realistic option for more people. The introduction and price competitiveness of AVs may also increase the distance and the number of trips travelers are willing to take, with the consequences for traffic congestion and vehicle throughput still uncertain. Most mass transit systems rely on fixed routes to carry passengers from points B to C; any combination of autonomy and ridesharing—or even one without the other—is likely to move passengers directly from points A to D efficiently and at a low cost. The Bloomberg and McKinsey report notes that car-sharers use public transit 40 percent more often than riders who do not; these patterns may change if the cost of pooling to riders’ ultimate destination becomes less expensive than traveling to the nearest public transit station.

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AVs vs. public transit

At the current pace of technological advancement, new innovations are creating uncertainty for future demand of new mass transit systems.

At the current pace of technological advancement, new innovations are creating uncertainty for future demand of new mass transit systems. This is problematic because infrastructure is often a substantial long-term financial and budgetary commitment for municipal, county, and regional governments. Voters in Santa Clara County, California, for example, approved a 30-year half-cent sales tax increase to fund BART’s extension into downtown San Jose. City officials in Columbus, Ohio, who incidentally beat out San Francisco and five other cities in the Department of Transportation’s $40 million Smart City Challenge last June, hope to use federal research dollars to establish a ridesharing and AV testbed, and possibly even leapfrog costly investments in mass transit.

In Columbus, planners are thinking about how these innovations will impact urban mobility. But elsewhere it seems few cities have given new technologies equal consideration. In a content analysis of the 68 most populous U.S. communities’ urban plans last year, the National League of Cities found that only six percent considered the potential effects of driverless technology. Only three percent planned to account for transportation network companies like Uber or Lyft, despite their growing presence throughout the U.S.

Even a slower uptake in AV adoption could blunt the speed at which planners should worry about new forms of transportation. In the short-to-medium term, Bloomberg and McKinsey say the costs of commuting via public transit will not become competitive with shared, self-driving vehicles until the mid-2020s. Yet this projected timetable remains troublesome because most mass transit plans are developed decades in advance. The National League of Cities report found that 52 of the nation’s largest 68 communities are planning for 2030 or later, for example. AVs and ridesharing technologies will not immediately replace mass transit systems, but in some places, they may, and as they become more prevalent and affordable, many drivers and mass transit riders will switch.

Without proper planning, today’s infrastructure investments could quickly become outdated in some places, particularly with changes in the transportation sector poised to dramatically alter the mobility of millions of Americans.

How AV technologies will impact future demand for mass transit continues to be an open question. As it stands, mobile ride-sharing applications are frequently used to complement mass transit services, and AV technologies are limited to a few testbeds, such as Pittsburgh, San Francisco, and soon Columbus. Riders occasionally use mobile ride-sharing applications to connect them to regional transportation networks. However, the growing and less expensive use of AVs within the next decade could forever change the value proposition of new technologies against more traditional mass transit modes. In approving these ballot measures this month, U.S. voters demonstrated that urban mobility vis-à-vis mass transit infrastructure continues to be a top-of-mind priority for many people. Without proper planning, however, today’s investments could quickly become outdated in some places, particularly with changes in the transportation sector poised to dramatically alter the mobility of millions of Americans.

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