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How Self-Driving Cars will Destroy Cities (and what to do about it)
Not Just Bikes has a new video out: How Self-Driving Cars will Destroy Cities (and what to do about it). I have a love/hate relationship with urbanist essayists like this. On the one hand, they often raise issues that most of the time are not explicitly considered by most people. On the other hand, they tend to have a very leftist perspective, and ignore important costs, benefits, and solutions.
The video makes roughly the following arguments:
Externalities
1 and 3 are similar problems. There are externalities that current laws don't address because they weren't huge problems given historical technology. Namely noise, tire pollution, and congestion. But new technology, autonomous cars, changes the costs and benefits of driving and will make these externalities much worse.
Not Just Bikes's proposed solution is to completely ban anything related to cars from city centers: highways, roads, parking spaces, parking garages. Bans are the same blunt tool that current laws use to force too much parking and not enough housing and bikes lanes to be built, just in the opposite direction. But he redeems himself by proposing putting a price on driving.
If you've ever heard of Arthur Pigou, a price on driving as the solution to 1 and 3 is pretty obvious. If someone really wants to drive at 4:30pm on a Friday when everyone else in the city wants to drive too, let them pay extra to be one of the people who can actually get places. There's a limit to how many people can actually get anywhere at that time, and we might as well offer the slots to the people who get the most value from it, and get some money back for public use in return. Charging a congestion fee completely solves the problem of autonomous vehicles circling the city hoping to be closest to the next customer. They have to pay the same fee as anyone else, so they'll only be on the road if they're the highest-value use of road space.
Not Just Bikes proposes investing in "functional and viable public transit", especially in forms that are difficult to remove, presumably to be able to resist transient political pressure. Of course, any publicly-run agency is going to have a very hard time running "functional and viable" transit when compared to a selfish private organization. And there's no reason a company that makes autonomous vehicles can't make and run buses as well.
A better solution is to price road space appropriately, and be agnostic to who's using the space. This allows the highest-value uses without artificially restricting to "public" or "autonomous" uses. Offer express lanes that guarantee certain speeds by limiting the number of vehicles that can enter. The entry fee is set high enough that there aren't any queues to enter. Crucial here is that any vehicle, private or public, should be able to use the lane as long as the driver pays the fee. This allows many more solutions to transit problems, without the dysfunction of publicly-run bus agencies. For example, corporate shuttles, church buses, and private rideshares should be allowed to use the same express lanes as public buses. And if Jay Leno wants to drive his personal car in the express lane, as long as he pays the fee, let him! Same goes for autonomous vehicle makers. If they want to reserve some space on freeways for their cars, make them compete on price the same as anyone else.
Putting a market-based fee on express lanes has a side benefit of making the opportunity cost of formerly transit-only lanes more legible. A few such market-based lanes can illustrate how expensive existing transit-only lanes really are.
Public Choice
Point 2, that laws will tend to favor autonomous car makers over the public, is just a specific example of public choice being a hard problem. There are analogous situations with Big Tech and the public commons, John Deere and right-to-repair, and Big Oil and climate regulations. I don't have a lot to say here, except that this has always been a problem, in other times and places has been much worse, and is likely to be manageable. People are smart.
An Aside on Congestion and Induced Demand
This video mentions the old chestnut that (paraphrasing) induced demand means it's pointless to increase road capacity. I'll quote one of our own:
If autonomous vehicles lead to people traveling more, that's good! It means more trips are now worth taking. People are visiting friends and relatives more often, working at jobs that are farther away but are a better fit for them, and in general doing more valuable things.
Conclusion
I'd like to see more discussion of the economics of transit, and economic solutions, especially without a leftist slant. But this is the first time I've seen a popular urbanist talk about the fact that self-driving cars will increase road use and congestion. This is great! This fact should be obvious to anyone who's spent five seconds thinking about the consequences of making driving cheaper, but I haven't seen it mentioned much outside rationalist circles. This point alone makes up for any other failings in this video.
I haven't seen the video yet, but I'd dismiss 2 or 3 outright as doomerism since no one knows what the legislative implications of autonomous vehicles will be. You might see areas with few pedestrians optimized for self-driving cars, but I doubt anywhere with significant foot traffic would see it. I've written elsewhere about the subscription model and why back-of-the-napkin math shows that it won't work out, at least not at any significant discount from owning your own vehicle. Just to give a relevant example without getting into too many specifics: The general idea is that most of a personal auto's useful life is wasted because it's sitting at home or in a parking lot. Thus, it would be more efficient if someone else could use your car when you aren't. The upshot is that no one will own their own cars when autonomous vehicles will make it possible for the car to take itself where it is needed automatically.
The problem is that trips aren't randomly distributed throughout the day. There's an initial peak during morning rush-hour that gradually fades throughout the late morning before rising again in the afternoon and peaking around 5:00. It then begins to taper again into the evening, and there is very little traffic overnight. Compound this with the fact that land use isn't uniform, either. Commercial offices are mostly located in city centers or their own office parks. Industrial sites are located in industrial parks, riverfronts, or other areas where they are relatively segregated from other uses. Commercial shopping and entertainment districts are located along their own strips in the suburbs. Downtown Pittsburgh has something like 5400 residents but 54,000 daily workers and visitors. Most of the residents specifically chose to live Downtown because it was easy to get to work. So every weekday you have a huge mass of cars coming in, but the number of people looking for a ride out of Downtown at 9 am on a Tuesday is vanishingly small. None of these cars will be able to find fares very easily, and it will be late in the afternoon before there is enough demand to get them out of Downtown.
So there are two options. The first is that they park all day until demand picks up, in which case we haven't solved anything. The other is that they leave and try to find fares elsewhere. This makes things worse; now we've got rush hours that run in both directions, full of cars deadheading out of town in search of fares or cheaper parking. Environmental costs aside, this is a dystopian traffic nightmare. Enact rules on deadheading and now you also have to pay the cost of parking the car and keeping it on standby all day, defeating the purpose of the service.
It's amazing how the same armchair urbanists who decry mid-century urban renewal inadvertently champion some of its precepts when it suits their anti-car tastes. When downtowns were losing business to shopping malls, it became trendy to pedestrianize streets or even entire business districts. The traffic disruptions meant that roads on the perimeter needed to be widened to accommodate the additional traffic, and buildings along these roads were torn down for parking lots. Architectural critic Anthony Paletta has described this as "strangulation by ring road"; once the business districts were disconnected from the surrounding neighborhoods, they began to wither away. Crossing a 4 lane one-way ring road was a hassle for pedestrians, and the centers became havens for derelicts. Some of the more notable revivals have happened only after cities restored the commercial strips to through traffic.
I think you are right that there will not be fewer vehicles. We have some data to support that. The existence of Uber has not reduced private vehicle ownership (but has reduced public transit use).
https://www.perplexity.ai/search/has-the-existence-of-uber-redu-RmakZ2MPSxGxVrAtl9Z_fw
This tracks with me. The operating costs of one of these vehicles will be low (back of the envelope 3-4k a year). Most people who currently own cars would continue to own them rather than worry about capacity issues. On a practical level, in a city like Seattle, a driverless taxi would become a toilet pretty quickly. I'd much rather ride in style in my own car with all my stuff in it. Most Americans will easily afford it.
But driverless cars will displace public transportation. The cost to operate busses in a corrupt city like Seattle is well over $1 per passenger mile. Driverless cars will be cheaper, will deliver their occupants directly to their location, and will not expose riders to a risk of violence.
I agree with your conclusions from the standpoint of personal ownership as the situation currently is. People do like to have "their" car, even if it's "just in case". While there is some percentage of folks out there who have chosen to forgo personal ownership (or, say, downgraded their household from two to one car), it's not very significant yet. Significant price decreases across the board for autonomous cars won't necessarily change the perspective of the individual, as they'd see a similar price decrease on the side of personal ownership as well.
However, riffing a bit on vague thoughts, what if the demand signal came from businesses? I have a vague thought that, sometimes, services which once made financial sense only for particular, highly-remunerated employees may sort of trickle down the chain as the cost to the business decreases. (E.g., when work phones or flights are really expensive, businesses only pay for them for a small number of employees that are a) worth it to provide the perk and get the employee, and/or b) whose productivity gains would offset the cost.) So, I'm thinking, something like how the NFL has extremely highly-paid employees, some of whom are liable to get themselves into trouble with their cars or whatever. So the league offers a car service that will come pick them up and take them anywhere, at any time. Expensive? Absolutely. Worth it to them? Possibly. Lower down the chain, other companies buy company cars for high-level employees. Could be fleet-owned; could be subsidizing a personal purchase. It's a perk and form of compensation, as well as a bit of confidence that they'll be driving a newer, maintained vehicle, and aren't going to have to take unfortunate days off because of car issues. Another example is that the financial industry already pays for employees to take late night taxis home.
Uber is already targeting business. 'Offer commuting services to your employees,' they say. It's a perk to the employee, a way of compensating them; it's cheaper to the business than those other things. There could be perverse incentives, but presumably, the business can say things like, "We'll compensate up to this amount of commute, and if you choose to live further, you'll have to cost share," or something. But they'll get to work every day. It's easy to add in if they need to drive across the city occasionally for business, without jumping all the way to a company car. Maybe when you're negotiating that new lease for office space, you can also say that you only need twenty reserved parking spaces in the building's lot/garage, not a hundred. Uber is betting that they can get to a price point where maybe you used to offer company cars to your C-suite, but now you can offer Uber Business + Commutes to all your VPs as well.
If autonomous vehicles cut the cost of this service down even more, how far down the chain do the perks go? Probably not all the way, not 100%. But can it increase enough to make some money? Uber is betting that it can. Businesses don't care about limit arguments of, "Oh, what if tens of years down the line, the number of autonomous vehicles is approaching 100%; what are urban planners gonna do about deadheading?" They don't care what Autonomous Uber chooses to do with those cars once they've dropped off their employees. If it makes economic sense, they'll just do it. Unless and until, of course, the @Rov_Scam folks start to slap laws around to kill it. That's a problem for the urban planners and Uber to fight about. They just want to attract the best employees and make sure they get to where they need to work every day.
Now, if Uber is right and businesses actually start adopting this sort of thing more, it actually can change some amount of the personal calculation. It's not, "I have to do the math on a cost comparison, and I have to take the risk of surge pricing or delays in getting a driver, and I have to figure out whether the complicated set of tradeoffs allow me to put my personal faith and reputation in this service enough to consider having our household go to one fewer vehicle." Instead, it's, "Well, so my commute is covered. I don't have to think about that. I'm not going to save money by just choosing to not use it. Now, what do we want to have for personally-owned vehicles?"
Lol, Uber has been offering this for years.
It's common in law, too, and you can also order food if you're working late. I worked in an office on the North Side from 2015 to 2017, when we moved into new digs in the Strip District. The move roughly coincided with Uber Eats launching in Pittsburgh and us switching over to them for our "late night perks". To be clear, the late-night car service is aimed toward people who rely on transit to get to work and is only offered by companies that don't offer parking passes. the rationale was that after 8 pm, transit switched from operating every 15 minutes to operating every hour, and since we were on the North Side you'd have to either walk across the bridge to Downtown or take 2 buses unless you happened to be on your route already, and doubling the wait times made that impracticable. I lived in the exurbs at the time and almost always drove in anyway, so I never used it.
Anyway, prior to the move the firm used a black car service which was better than Uber but a bit intimidating for normal people. A guy a worked with who used it once was kind of freaked out when a guy showed up in a Lincoln and opened the door for him. The reason why we switched was that the process, for both that and ordering food after 7 pm, used to be cumbersome. You had to use the company credit card and get receipts, and then fill out an expense report and submit it to HR. Then, just to make things perverse, HR would come back to me with another form I had to sign to demonstrate that the expense had been approved by an attorney (even though I already signed the expense report). The HR lady was thrilled about the switch because we could just order everything through the company account which would put the appropriate restrictions on time, location, price, etc., and then not worry about the forms. Then like 6 months later they started charging an additional 10% on business accounts and she was mildly pissed. I still had to deal with a ton of other credit card approvals, petty cash forms, reimbursement forms, mileage logs, and other bullshit that I (and everyone else) waited to do until the last minute to the long-suffering HR lady's eternal consternation. Good times.
In any event, I haven't heard of anyone using Uber for Business other than for occasional transportation like when traveling out of town or something like that. I don't see it ever becoming an everyday perk for anyone, let alone common enough to have any significant impact on traffic. Perks are usually commensurate with the level of responsibility and the nature of the work involved. Lots of people work late, but most of them can't bill food to the company because the added value doesn't justify it. When the extra 3 hours you spend at work clearly nets the company an additional thousand dollars, 20 bucks worth of takeout isn't an issue. Company cars are usually reserved for people in sales or other jobs that require you to be on the road all day, and even then they have to pay taxes on them based on personal use. One firm I worked at gave the attorneys parking passes but admins had to take the bus. This is because they expected the attorneys to work late hours regularly enough that paying for a spot was cheaper than paying for a car service. Admins never worked late. I switched jobs specifically because I hated being stuck at work late enough to be able to watch night games at PNC from my office window.
I was able to speak this evening with someone I know who works in a suitable job, suitably high up, for a large multi-national. They also pushed back a bit, but I was able to prod. That company has fleet vehicles for a few categories of folks, many of which are plausibly job-needs-based. Some of those job-needs seemed like they might be replaceable by an ACaaS. Probably the biggest one that wouldn't have worked was a set of positions where they would be visiting multiple locations each day with overnight stays along the way. The problem here is actually kind of subtle, because it's not the first problem you'd think of with Uber. With Uber, your first problem would be that you may just be heading from town to town on your trip, so you might not get a human who wants to drive out there. With ACaaS, if the same company runs in the neighboring town, it can just join the fleet there. No, the problem was that then you'd have to pull your suitcase out of the trunk every time you got to a new location, and you're visiting 3-4 of them before you stop for the night!
Beyond job needs, this multi-national gives every single VP or higher a fleet vehicle. Why? Honestly, my interlocutor explained the reasoning, and there was nothing there that really made a distinction. Why not offer it to one level below VP, even a cheaper car (they offer different tiers of cars to different levels already)? No real reason. It would cost money. But it costs money to give them to VPs and up, too. At one point, the explanation was that the people high up enough already made so much money that they didn't want any more cash, so it was about finding other perks for them. (I lol'd a bit.) I guess you can save a little in taxes. I didn't dig in to details of how they compute it, but I was told that they do have a monthly charge on their paycheck to cover whatever taxable portion; it seemed like they didn't have much detailed paperwork and that it was a mostly fixed monthly charge; it also seemed pretty cheap. We consulted with ChatGPT about reasons to offer company cars, and it threw in that there could be cost benefits by making a deal with an auto company to buy higher volume for cheaper or to save on insurance.
Reason after reason just didn't draw a line. "It's a status symbol." Well, if your employees were all some multiplier more productive, couldn't you give one level below VPs their slightly lower status symbol, and give more expensive status symbols up the chain? Basically, it's expensive. If it was cheaper, I guess they could throw the perk around a bit more. Of course, like any perk, some employees might not even value it much; might prefer cash. My wife complains that her salary is lower because they offer health insurance, even though she doesn't use it, because she's on my insurance.
I was at some point told that those folks definitely didn't need company cars. In fact, when I poked around with whether something like Uber/ACaaS could make any sense if it could be done at the right price point, I was told that it would absolutely be just fine for those folks who are getting their car just because they're a VP-or-higher. Okay-ish for some job-needs. Just don't have a suitcase.
Their view, from the perspective of a multi-national, would be that it would be extremely localized. You mention some of the factors. Are you paying for parking passes? How much does that cost in your area? Would they be transiting in/out otherwise? If your city is going to hell in a handbasket, what's the value of making sure your valuable-enough employee doesn't get stabbed in the subway? We sort of settled on the idea that some set of factors could make it plausible in some places (again, the price point is a huge driver). But you're not going to have the same case in Peoria that you would in NYC or wherever.
They also told me that there are, indeed, folks in the business who are, for lack of a better word, agitating for the company to subsidize commuting costs for more employees. And it seems like this sort of Uber type thing is vaguely in scope of one of the ways they're proposing to do that below the level of company cars. I'm more of a 'just give me cash' kinda person, unless, like I said, there is some very acute parking situation or something that really aligns the business incentives.
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