Urbanism Next scholars talk about AVs, E-commerce, and city budgets in GovLov Podcast

Urbanism Next researchers Nico Larco and Ben Clark were recently featured on an episode of the podcast GovLov.  GovLov, for the uninitiated, “is a podcast about the People, Policies and Profession of local government.” The goal of the podcast is to “explore policy issues that impact local governments and the innovative solutions being used to address them.” GovLov is produced by ELGL—a fantastic (and at times irreverent) local government professional organization.

Professors Larco and Clark talk about their recently published report on the impact of AVs and e-commerce on local government finance. You can hear more about how we see AVs shaping local government budgets in the future by listening to the podcast, reading the report, or coming to the ELGL Pop-Up conference in Portland, Oregon on Friday September 22—more info can be found here. Ben Clark (of Urbanism Next) and Mountain View, CA Police LT. Saul Jaeger will be talking about practical issues of AV planning and preparations for local governments. And while it is still hard to know exactly how dramatically AVs will impact our urban infrastructure and budgets, starting to think about AVs now is vital for local governments.

 

(Sub)Urbanism Next?

In the Sunday Review section of the New York Times, Alan M. Berger of the MIT Center for Advanced Urbanism poses some interesting questions about the future of suburbs.  Berger assumes that the future “lies on urban peripheries” and offers some innovative ideas for making the suburbs more sustainable.  Coupled with excellent research from scholars like Ellen Dunham-Jones and Emily Talen on retrofitting suburbia, Berger brings a unique perspective on how technology might force changes along the periphery of cities.  In particular, Berger thinks about how drones, self-driving cars, and a smarter landscape will affect suburbs of the future.  As we think about how autonomous vehicles, e-commerce and the sharing economy impact cities, it is also important to consider the urban periphery and think about retrofits and new development.  In particular, it is important to consider how to adopt policies to and regulations to allow for the kind of future Berger suggests.

Retail Continues to Shift from Commodity to Experience

As we have reported previously on this blog (and see our report on the topic), the rise of e-commerce is shifting the brick-and-mortar retail model away from stores being simply a place to buy something (as can be increasingly done online) and towards a focus on the customer experience.   While this is happening through omnichannel store strategies (blended online and in-person) and in guide-shops such as Bonobos and Warby Parker, that strategy is now expanding to much larger retailers.

Nordstrom recently announced a new store concept called Nordstrom Local which “experiments with new delivery formats, promises an in-store bar with wine, beer, coffee, and juices; eight fitting rooms; alterations; convenient merchandise pick-ups and returns; manicures; and expert image consulting advice from its knowledgeable personal stylists.”  While not carrying substantial inventory itself, the store is connected to local full-service/inventory stores and local warehouses.  It does offers in-store pickups, at-home deliveries of ordered goods, and a place to return items, but the hook is that it offers a place the customer wants to be – in person.  The food and drink, the store design, and the expert stylist advice are focused on bringing people into the store and becoming a gateway to both in-store and online shopping.

Another step towards the continued shifting of the retail market.

Seattle’s New Mobility Playbook

The City of Seattle has just put out its ‘New Mobility Playbook’ that has been a while in the making.  It is a great, concise description of where the city is at, the new transportation technologies that are coming, and how the city is preparing for them.  The report covers the pros and cons of the changes that are coming and does a good job of expanding beyond first order transportation impacts to include things like equity and economics.  (Readers of this blog will note a few missing secondary impacts such as impacts on sprawl, density, and land valuation for instance).

One of the strengths of the playbook is that it is clear about the ‘Principles for New Mobility’ (page 32) – these are the guiding ideals for engaging new technologies and they are based on overall city goals, not anything specifically transportation focused.

The report ends with five key ‘plays’ the city is enacting to preparing for coming changes.  This includes ensuring equity, a focus on active/people-first uses of the right-of-way, reorganizing SDOT, managing data, and being nimble, adapting to and leveraging innovation.

Great food for thought for regions who are similarly planning for coming changes in transportation.  Related efforts can learn from this and hopefully expand upon the secondary impacts.  As we have said repeatedly, it is important to frame these coming changes to transportation as not only being about transportation, but instead about all aspects of how cities work and our general quality of life.

More information about Seattle’s efforts can be found on their ‘New Mobility’ page here.

 

Podcast – Urbanism Next on Streetsblog

For any of you that want to hear more about our thinking here at Urbanism Next, take a listen to the Talking Headways Podcast from Streetsblog ; Talking Headways Podcast: Rise of the Undead Car.  Description below:

Nico Larco, an architecture professor at the University of Oregon and co-director of the school’s Sustainable Cities Initiative, joins us this week to talk about how autonomous vehicles and e-commerce will affect street design, parking, and land values. Also on the agenda: terrestrial drones, zombie cars, delivery bee hives, and the fact that cities just aren’t ready yet for an autonomous vehicle future.

When Are AVs Coming? (10 Car Companies Say Within the Next 5 Years…)

Although this blog likes to focus on the secondary effects of technologies and not on the technologies themselves, the arrival timeline of the technologies will have a profound impact on what secondary effects we will be seeing when.  With that in mind, we are bending our rules a bit to share a recent article that documents the timeline for AVs for the 11 top auto companies.  The level of automation targeted is Level 3 (car drives and human is backup – such as what exists today with Uber cars in Pittsburgh among other places) and Level 4 (car drives and no human backup needed, but in limited environments – often urban ones and not in bad weather).

In short, the predictions are closer than you might think ranging from later this year to 2030 on the far end, but with all manufacturers predicting at least Level 3 Automation within the next five years.  While these will be in limited (probably urban and freeway) environments, it will begin to unleash many of the secondary effects we have been discussing on this blog.  Change is coming fast – we need to prepare.

Here is a quick table based on the findings from the article:

(Click on table for larger view)

Compiled by nlarco/SCI – from https://venturebeat.com/2017/06/04/self-driving-car-timeline-for-11-top-automakers/

 

The Vehicle Mileage Traveled (VMT) is in Beta

“Unfortunately, motor fuel taxes are an increasingly unsustainable source of revenue as fuel efficient hybrid vehicles and completely electric vehicles grow in popularity” — Courtney Moran and Casey Ball.

Federal motor fuel taxes haven’t been increased since Clinton was in his first term as president. They simply aren’t a sustainable form of revenue to pay for transportation infrastructure.

In this context, a number of states are more realistically testing out what the vehicle mileage traveled (VMT). Brookings Institution has a nice report on the topic here. The researchers found that switching to a VMT “would  raise $55 billion a year for highway spending [and] could increase social welfare by 20 percent when compared to an increase in the gas tax to meet the same goal when taking into account changes in Corporate Average Fuel Economy (CAFE) standards.”

Washington State legislature has been looking at VMT since 2012. They “think it’s a viable approach, but now it’s time to test it.”  “The one-year study, which will involve 2,000 volunteers, would figure out ways to charge car owners a tax based on how many miles they’ve driven within the state, rather than how much gas was pumped.” They are not only testing out the idea of VMT, but the ways in which people would report the mileage driven. The approaches include:

“A mileage permit, where a driver chooses how many miles to purchase. Odometer readings: A per-mile charge would be based on the vehicle odometer. Automated mileage meter: A device installed in the car would report miles driven. Drivers would choose GPS or not. Smart Phone: A downloadable app would use the driver’s phone to record and/or report miles driven.” Drivers can sign up now to pilot the approach to taxes.

Oregon conducted a similar pilot in 2015, with few pilot subjects continuing to opt for the VMT rather than fuel taxes. California, Pennsylvania, and Delaware are also testing out this idea. It may take a few more years to become mainstream, but the inability of Washington, DC (Congress/President) to do anything on raising fuel taxes, coupled with more fuel-efficient cars using few gallons of gas per mile create a situation where leaders will HAVE to do something (hopefully) sooner rather than later.

 

Cities Selling Streets – Hopefully Not a Sign of the Future

San Francisco recently sold a street to a real estate investor to pay off delinquent taxes.  Now, this is not a case of a city selling a publicly owned street as this was part of a gated community and an originally privately owned street.  So the city basically repossessed the street and then sold it at auction to make up the funds that needed to be paid.  But – this idea of selling publicly owned assets to raise funds is not unheard ofHouston, for instance, sold close to $2 million of streets and utility easements to raise funds.

Of concern is this trend coupled with the impacts of AVs and E-commerce on municipal budgets (see our report on this here).  If city budgets become substantially constrained with the advent of these new technologies – not a far fetched idea – streets are one of the primary assets a city has and could sell in order to make up budget shortfalls.  Ironically, this is also exactly the most powerful asset cities have when it comes to AVs and Commerce since – as Jeff Tumlin often says – it is THE operating environment all of these technologies run on.  Will be important to make sure cities are leveraging this asset and not simply selling it off.

AVs and Real Estate – A Guide to Potential Impacts

We have gotten a number of questions about how AVs could be affecting real estate and thought it would be good to do a post that covers some of this.  Below is a brief list of issues to consider.  Look out for an upcoming post that will add e-commerce and sharing economy impacts as well.

  • Parking – if we move towards an even partial model of shared vehicles (i.e. Lyft, Uber, Via, Chariot) there will be a substantial reduction in the need for parking (see earlier posts here and here). Studies have shown this dropping down to as low as only needing 10-15% of current parking spaces (and here). This change would open up a tremendous amount of land for redevelopment (parking is the single largest land use in most cities), hence dramatically increasing supply and – one would think – decreasing land values.  In addition, as parking needs diminish and parking regulations move to requiring less – or no – parking, constructions costs will also drop dramatically.  Parking can cost about 4k$ per spot for on-grade parking and up to 18-20k$ per spot for structured parking, can be a significant proportion of construction costs, and typically requires additional land acquisition.
  • Sprawl – several studies have shown that AVs could increase suburban sprawl as people can drive further, faster and might be willing to accept a longer commute as they can now use their time in the car for things other than driving. If that is the case, there will be an increased pressure on sprawl and the metropolitan footprint would expand dramatically.  Again, this constitutes an overall increase in available/feasible land supply which – given the rules of economics – lead to a drop in land value.  Arguably, this would not be the same everywhere as land that will have all of a sudden become available for development would see large price increases while places that are already close enough or within to cities would see land prices drop due to increased competition.
  • Housing Prices – Given the points above, housing prices should decrease. As land prices and construction costs drop, housing rents and prices will also drop.  This could be a boon for affordable housing concerns across the country (for example, each parking spot included in rent equates to about 225$), but could also cause substantial disruptions to existing markets and developments/projects.
  • End of TODs? – One unknown effect of AVs will be how it changes transit. On the one hand, this new technology could be a boon for transit as it helps solve transit’s perennial first/last mile hurdle. Lyft can get people to the train, light rail, or bus station, increasing catchment areas and boosting ridership.  On the other, riders may simply decide to stay in that Lyft all the way to their destination – especially as the price of the trip drops dramatically as technology replaces the highest cost of the trip – the drivers.  Preliminary reports from New York and San Francisco point to this trend, with transit ridership diminishing as Transportation Network Company (TNC) use skyrockets. Some studies have shown a decrease of up to 43% of transit ridership – potentially the death knell of transit as we know it.  In addition to this concern, is simply the potential atomizing of transit.  What happens when multiple rider/route services such as Via and Chariot (or Lyft-line and Uber Pool –  the carpool versions of Lyft and Uber) grows and we now have 8-12 passenger vans zipping through cities, delivering people directly to where they want to go and not to a bus stop a few blocks or a few miles away. If this happens, the activity/energy clustering and focusing role of transit would diminish as would the price premiums that are associated with transit proximity and transit oriented development.
  • Location, Location, Location? – A looming question with not only AVs but the entire shift to mobility as a service is that mobility will become easier and more affordable. As that happens, the friction of transportation – which is one of the factors that creates the value of location – will diminish.  This does not necessarily mean that current activity centers and draws will reduce in value, but any value based solely on the broader proximity aspects of location may diminish.  This will increase the role of the quality of places and the buzz of related activities in determining location value.

A significant issue to consider in all of this is not only the end state change of AV impacts, but also the transition period.  In terms of real estate, a glaring concern would be projects caught during this time.  Projects that have built parking in consideration of today’s reality may find themselves with decreased parking revenues (that is already happening with Lyft and Uber) and unable to repay long-term mortgages or bonds.  In addition, these projects will be competing with future projects that did not need to build parking and/or benefited from reduced land costs.  The last projects built with today’s constraints – and not future-proofing the coming disruptions – will be the ones most punished by this rapid change.

All of this points to a dramatically shifting landscape for real estate.  A large question is both what direction these changes will take and – as importantly – how quickly will they come about.  Of concern is not only the shifting market conditions, but also the regulations that currently help shape that market and the speed at which those typically change.  What happens if parking utilization needs drop dramatically over a short period of time.  How quickly will parking requirements shift with that? And what kinds of political battles will meet these changes as developers and property owners with existing properties fight these changes to protect their competitiveness.

GM’s Cruise Anywhere is beta testing AV car share in San Francisco

Cruise—an AV company purchased by GM last year—is offering completely autonomous rides to its San Francisco based employees. Currently, the service is offered only to employees. The company has indicated “that some employees are already using it as their primary source of transportation, replacing either personal vehicle ownership, public transit or traditional ride-hailing services completely.” As it is currently operating the app and cares are is “having them use it for the first time and make AVs their primary form of transportation.” A Reuter’s poll from May points toward this same effect of Uber/Lyft already taking place (pre-AV). These findings are pointing toward real viability of a shared automobile future. The market for this exists, people are already accepting shared cars as a viable form of transportation–replace their own vehicles. Thus it is easy to see how with the advent of AVs this reality would be made more financially viable. Lyft and Uber are paying their drivers about 60% of the total fare you pay as a rider. And while a good portion of approximately 60% goes to the upkeep of the cars (maintenance and fuel), it is easy to see why Lyft/Uber are ready to get out of the driver game–reduce expenses, increase profits.

In the case of the Curise beta testing cars, they all do have safety drivers behind the wheel, in accordance with California law, for now. Yet Cruise has indicated that “those drivers have had to take over manual control of vehicles engaged in Cruise Anywhere service only on a few occasions, with the vast majority of the driving done autonomously.” So right now, the beta of the Cruise Anywhere app and service are really just Uber/Lyft for the employees of the company—but it shows where things are going very quickly. Lyft plans on having V service in place this year—see an early post on Urbanism Next written by SCI Fellow Ramy Barhouche.

This video shows employees using the service:

 

Trucking industry transition to AV will put job pressures on more than just truck drivers

In a post a few days back here on Urbanism Next we talked about how the trucking industry unions were expressing concerns about AV trucking for safety and other reasons. It is pretty clear there will be substantial job losses in the trucking industry. The Bureau of Labor Statistics estimates there are more than 1.7 million employed in the trucking industry—though this is very broadly defined. There were about another 1.5 million employed in peripheral jobs in the industry in 2016.


These jobs, as indicated in the table, pay well on average for people without a 4-year degree. The elimination of these jobs will have substantial equity concerns over the long-run. The BLS has estimated that the trucking industry will grow by about 4.7% between 2014-2024. This growth will be tempered by AVs, which are not yet on the market. The impact on wage growth in trucking will be substantial and the overall growth of this sector as a place to attain a job. However, when we start to think about how AV trucking will impact job or wage growth we have to think about not just the people behind the wheel, but also all of the people that support those individuals as they drive across the country.

RTS

A recent article on the ‘Machines with Brains’ blog points the struggles that many non-trucking, but trucking dependent industries, will face in the near future. They provide examples of when new highways are built, diverting traffic from once busy thoroughfares to new routes. When the trucks stopped rolling through some sleeping towns in rural America, the revenue and customers disappeared as well. Now, imagine what will happen with that Peterbuilt truck rolling across Iowa no longer needs to stop for food or coffee? As the Quartz article points out: “The machines won’t get tired and they won’t need to eat breakfast, meaning the towns and truck stops built to serve the needs of humans drivers could one day be irrelevant.” They point out that truck stops employ 2.2 million people nationwide. Even if the AV truck transition is slow, there are a lot, I mean a lot, of jobs at stake.

 

 

Semi image source: https://flic.kr/p/UoJFTD

 

 

The Backlash against AVs before they take any jobs

Labor unions and political leaders from around the world are already seeing the future of AVs, and they are laying the groundwork to oppose the job losses that are likely.

The Teamsters, a union that represents a lot of truck drivers, is warning that terrorists may use AV trucks as mobile unmanned bombs. “Teamsters are the safest and most experienced drivers in the country…We want to alert the public of the risks that corporations … are willing to take at the expense of working people.” They fear that not only could the AV trucks be intentionally used as bombs, but that careless corporate interests could haul hazardous materials carelessly.

The AFL-CIO transportation lead, Larry Willis, has “said Congress is progressing too quickly without understanding the full effects of autonomous vehicles, which ‘are likely to cause massive job dislocation and impact worker safety.’”

The fears of job losses due to AVs is likely to be substantial—perhaps 4 million or more, largely hitting drivers of buses, taxis, and trucks. Unions have “successfully lobbied for the [US] House to include a 10,000-pound weight limit in the legislation,” which would exempt semis, for the moment, from AV trucks from being legislated in the same way as passenger cars

Meanwhile, India’s minister for Road Transport has stated that “We won’t allow driverless cars in India…I am very clear on this. We won’t allow any technology that takes away jobs.

The struggle between jobs and technology is real and will have real impacts. The totality of the impact, in the end, is hard to judge at this point.

Lyft will launch AV rides by the end of this year

Lyft announced, on July 21st, 2017, that their customers will be able to summon AVs, on some Boston roads, by the end of the year. Test drivers will accompany the customers and cars, during the testing period.

Rather than building its own vehicles, like competitor big firms, Lyft designed a ‘common software interface’ that partner automakers can use for their cars. This means that riders in Boston could be using vehicles built by a range of manufacturers (GM, Jaguar, Land Rover, etc).

The sensors will be collecting information and interacting with their surrounding as the vehicles begin picking up passengers. This will progressively contribute to a centralized source of data controlled and analyzed by Lyft. The insight will then be shared with partner automakers. It’s still unclear if the carmakers will also receive any revenue from Lyft, for their service.

Tech and automotive executives are expecting AVs to play a key role in the future of transportation, which could prevent 95% of traffic accidents, due to human error. Yet, the AV industry still faces State regulatory obstacles. The lack of uniform procedures and expectations could hinder the progress of AVs. Key House subcommittee members unanimously approved a bill, in June 2017, that will make it easier for federal regulators to develop the rules for AVs.

If you are interested in learning more about how AVs will have impacts on cities check out Urbanism Next’s recently released report on the impact of AVs and e-commerce on cities. You might also be interested in Nico Larco’s recent post on AVs and Streets.

The post was written by SCI Fellow Ramy Barhouche.

Waymo is thinking seriously about bicycles

Waymo, Google’s AV-focused arm created in 2009, is thinking seriously about bikes. Nathaniel Fairfield, Waymo’s  principal software engineer, has been collecting and tracking data on cyclists, to help AVs predict their road movements. In addition to these results, Waymo programmed their cars to pass bikes in accordance with state laws. The predictability of cyclists and pedestrians is one of the bigger challenges that AV creators are facing.

Carnegie Mellon University Associate Professor Anthony Rowe. Image source: Margaret J. Krauss/WESA

According to a survey conducted by a cycling and pedestrian non-profit – ‘Bike Pittsburgh’, cyclists felt safer around AVs than around human drivers. However, according to Prof. Anthony Rowe, AVs still need some additional help to detect cyclists. Bikes are not as predictable as cars. They can act like cars on the side of the road, then change and act like pedestrians walking on the sidewalk.

Rowe and his team are developing bike instruments that provide cars with information to predict cyclist movement, to avoid collisions. The instruments will eventually be embedded in a mobile phone on the front of the bike, once the program is more developed. Rowe’s bike, pictured above, is outfitted with a range of sensors that are helping his team to learn more about cyclists behavior and movements.

The post was written by SCI Fellow Ramy Barhouche.

Impact of AVs and E-Commerce on Municipal Budgets [REPORT]

The Impact of AVs and E-Commerce on Local Government Budgeting and Finance (Clark, Larco and Mann) is a new report from us here at Urbanism Next/SCI that takes you through a city’s budget —both revenues and expenditures — and describes the areas that will be affected as AVs become commonplace and e-commerce takes on an even larger role in retail. City leaders have to start planning for this future now if they want to have a voice in what AVs/e-commerce will do to their cities.

While E-Commerce is already disrupting local economies and AVs create a “potential rat’s nest of a budgeting challenge” (Fung 2016), our report starts the process of untangling that rat’s nest.  This report provides the foundation for future work in this area around a finer grain analysis of municipal budgets and consideration of future revenue sources for the infrastructure changes that are sure to arise with the integration of AVs and more widespread e-commerce.  Stay tuned for more.

 

 

AVs and Streets – A Guide to Potential Impacts

We have been asked numerous times about how the introduction of AVs (and E-commerce) might affect streets.  As cities make plans for future expansions, changes to their street network, the inclusion of various modes/complete streets, and overall street design – what should they be considering when they include thinking about AVs?

Here is a short list:

Curbside space allocation for pick-up and drop-off – This will become a large issue as demand for this space will increase substantially – especially at peak travel times.  It could also cause significant disruption to transit and bike networks as AVs compete for curbside access and cut across bike and transit lanes.

E-Commerce Delivery – Similar to above, as e-commerce expands, there will demand for curb space and places to temporarily park vehicles as deliveries are made.  In addition, we will probably be seeing a large increase in delivery vehicles (an expansion of a specific kind of freight) which will affect streets and corridors?

Separation of Modes – As AVs have algorithms that don’t allow them to hit people (a fantastic development), a corollary will be that anyone walking or biking in the street can cause mass disruptions to the transportation network.  A “critical mass ride” of one.  This had led to calls for stronger separation between modes – a disastrous proposal – imagine our streets starting to look like China’s where there are fences between modes.

Drones on Streets – Not the flying kind (those are probably further off in the future) but the terrestrial ones.  Picture an Amazon truck parking in a neighborhood and sending off twenty delivery AV rovers.  Will those drive in the street? On the sidewalk?  How will they affect other modes? What should we suggest or try to regulate?

Micro Transit Corridors – Lyft and Uber are pushing shared rides (Lyft-Line and Uber Pool) and are already incentivizing people to make their pick-up and drop-offs happen along arterials or more heavily travelled routes to reduce the vehicles efficiency (see this earlier post).  This will define micro-transit routes throughout the city.  Where will these be? Should cities help define the routes? How will it affect all modes moving through these areas?

Reduction/Elimination of Parking – We are already seeing a reduction of parking use in some venues as Lyft and Uber takeoff (see this earlier post, and this one).  As this happens more and more – research says we will need 10-15% of current parking spaces – what happens to the onstreet parking?  Is it transferred to other modes or additional lanes?  What happens to the buffering role it currently plays in many streets?

Changes to Available ROW – Building on this last point, if AVs need narrower lanes (they are better drivers than we are) and potentially can increase throughput through some streets (see point on this below) and therefore allow a reduction in necessary lanes – how will we use the available ROW.  This is especially critical as available ROW seems to be one of the larger limitations to increasing dedicated infrastructure for transit, bikes, and pedestrians.

Increase in VMT – Most modeling of AVs we have seen show an increase in VMT, but this is more dramatic in scenarios where we all have our own vehicles vs shared fleets.  This is especially so if we don’t tax empty cars (zombie cars) driving around as they wait for their owner or go do errands on their own.  How will this increased VMT affect other modes, congestion, etc? How can we make sure we limit it?

Efficiency of Streets (for cars) – AVs in theory will be more efficient, require less space and be able to move faster.  Many models have been created that show connected vehicles zooming towards each other at intersections and just barely missing as they efficiently move people and goods.  What this fails to recognize is that one of the larger impediments to this type of free-flow movement is the fact that multiple users exist in the right-of-way.  Pedestrians and bikes would not work well in these scenarios.  This leads to thinking that there may be two worlds of cars on streets – those where they dominate (definitely freeways, but will that also start including arterials and collectors…) with free flow of vehicles and other areas where other modes are considered as well.  Will the mixing of modes be frowned upon because it is such a limitation to this efficiency?  Will some areas ban bikes/peds?

Street as a Utility – This is more of a meta-concept, but the idea is that we need to stop thinking of the street as a public space that we can all use whenever and however we want, but instead should think of it as a utility that has limited capacity.  Related to how we pay for the amount and time of our electricity use (in places), we can think of streets similarly.  This might lead to something like a geometry tax (you are charged for how much space you take up on the roadway divided by the number of people in the vehicle – a great deterrent to zombie cars).  — Stay tuned for an upcoming post focused on this topic!

Finance – We have done a quick pass at how these technologies will be affecting municipal revenues and – in short – it will not be pretty or easy (see our report here and see analysis of parking/car related revenue impacts here).  A lot of disruption (for example the drastic reduction of parking fees and traffic tickets while we are needing to pay for retraining large groups of the population who used to work in retail or driving jobs). Limited budgets will affect everything else government tries to do and services it provides – streets included.

 

Parking garages are already becoming dinosaurs

I’m seeing a giant meteor coming that will, metaphorically speaking, put a huge hole in municipal budgets. This meteor will be AVs. The meteor that pushed dinosaurs to extinction may have done so with one big hit, the AV evolution might be a bit slower. A recent article in Governing Magazine provides us with evidence that the impact of AVs is being foreshadowed by the likes of Uber and Lyft (often collectively referred to as TNC or transportation network companies).

Airport managers nationwide are expressing concern in how the TNC are disrupting the budget models that airports have long had in place. Carter Morris (VP with the American Association of Airport Executives) has stated that “airports need to adapt and do it quickly.” Many airports have seen dramatic drops in fees collected from taxi companies and car rental companies because so many people are just using the TNCs instead. So now more than 200 airports nationwide are charging pick-up and/or drop off fees for the TNCs, just as they might have with taxis—though the exact revenue models are quite varied. As fee revenues decline, airports may look to airlines to pay more, which could drive them away from the small/medium size airports.

And if you are wondering how much of an impact TNCs are having on the ground transportation game, look no further than “San Francisco International Airport, where TNCs accounted for more than two-thirds of commercial ground transportation in May.” Lyft and Uber are preparing for an AV future, airports should too!

To learn more about the impact of AVs on municipal budgets in the Urbanism Next report coming out in late July. You’ll find a link to the report here on the blog.

Lyft: 1 Billion AV-EV Rides Per Year by 2025

We have often talked about some of the important parameters guiding the future effects of AVs on cities to be the question of AV fleets vs individual ownership as well as AVs cost.  Lyft recently announced that its platform will provide 1 billion autonomous vehicle rides per year by 2025 – and they project these rides to be electric vehicles.  This points heavily towards a model of mobility as a service – at least in parts of the country – and a dramatic drop in the number of parking spots needed in cities.

Supporting the idea that autonomous fleets are in our future, GM (Lyft’s partner in the AV/EV/Ride-sharing arena) said that its Bolt AV will be costing something in the six-figures, most probably precluding it from the private ownership model, but absolutely viable in the ride-sharing model.

All signs pointing to Robin Chase’s FAVES in our future (Fleets of Autonomous Vehicles that are Electrified and Shared).  Good news for those interested in urbanism and sustainability.

Federal AV Legislation???

There seems to be a push for federal AV legislation as the GOP is putting a package of bills forward on this topic.  Of issue for Urbanism Next topics is that the bills continue the national trend of dealing with AV regulation in terms of how to accommodate the autonomous vehicle and not on the secondary effects these vehicles will have on our cities.  The GOP package is focused on how the vehicles themselves will be regulated and permitted – for instance, a draft of the bills have an exemption of up to 100,000 vehicles per manufacturer from federal motor safety vehicle rules.

A big question here is what role the feds and/or the states will have in regulation.  A good argument can be made about the problems with a patchwork of regulations across different states that are both cumbersome to manufacturers and a burden for the states themselves to develop – especially with so many unknowns about how this technology will play out.  National leadership makes sense, but we are in a strange situation where this technology is advancing very quickly and therefore giving the states the ability to work more nimbly at a more local level may be prudent.

Again – in relation to Urbanism Next concerns, we would not want to see federal regulations that limit states’ ability to create and experiment with incentives and potential taxation structures that will help promote community benefits.  The goal is to make great places to live and to improve quality of life (and figuring out how AVs fit into that picture), not just to get AVs on the road.

(UPDATE:  A more recent article tracking the mark-up of the package of bills is here)

 

Micro-Transit is not a free-for-all

Micro-transit (privately operated transit) is seeing a new rise as Lyft-Line and Uber-Pool bring together each company’s ride sourcing model with the power of combining different riders along a route.  As more people choose these options, the system becomes more and more efficient as there are greater chances of finding a few people who want routes similar to yours.

While some have envisioned this as a free-for-all where micro-transit now operates from any destination to any destination, eliminating some of the hierarchies inherent to fixed route transit, this is not exactly the case.  Both Lyft and Uber have recently made moves to make their ride services more efficient by having riders walk to higher volume streets.  Lyft has introduced ‘Pickup Suggestions‘ and Uber has their ‘walk to the corner system‘  – incentivizing people to walk to the nearest avenue or arterial instead of being picked up on a more minor street.  This reduces travel time which allows more people to be picked up (without becoming frustrated at the wait).

From a city development perspective, this points to the continued importance of higher volume streets as transit hubs (even if it is not traditional transit) and begs the question of how to make pickups and drop-offs most efficient along these high volume routes (a designated spot on each block?).  There are obvious benefits to having some kind of hierarchy in micro-transit – how should we design streets that can accommodate this?

Image Source: Uber

AV buses coming to Oslo–can be hailed by smartphone app

Oslo, Norway will get AV bus transportation in 2018 (article can be found here in Norwegian). The bus system they are testing out will provide on-demand point A to B transportation in combination with fixed route services. The on-demand service will be linked to a smartphone application that will allow riders to hail the bus—similar to what we see with Lyft and Uber. The buses will carry 15 riders and can be essentially ‘driven’ by the passengers within a designated service area. The test will allow Oslo to determine if AV buses can help the city deal with a growing population without increasing the number of cars.

 

 

AV developers planning for a future without major roadway improvements

A key issue facing cities, states, and the federal government as they ponder the AV future, how do we properly prepare the roadways for AVs? Some suggest putting sensors on roads, but in an already fiscally constrained environment the idea of spending more on our roads for technology that is not yet fully functional is a non-starter.

The major players in AVs today are, not surprisingly, fully aware of this reality. This is why these companies are developing technology to adapt to current roads and current driving conditions rather than pushing for new technology. “Uber, Waymo, Ford, General Motors and others, all of whom have targeted around 2021 for the unveiling of fleets of ride-hailing focused self-driving cars, are developing vehicles with sensors and mapping systems that won’t rely on roadway upgrades.”

And while building smarter roads would make for safer and easier AV travel, it is clear that companies like Ford understand that “you can’t count on that being there, which is why our technical approach is to build the capability completely on the vehicle,” says VP of research and advanced engineering Ken Washington.

The forthcoming Urbanism Next white paper will cover a range local government secondary effects that we expect to see arising from the introduction of AVs. Look for it in the coming weeks.

 

Two tech giants ink deals with two car rental giants

In the last few days, it has become apparent that the owners of the largest fleets of private vehicles, car rental companies, are finding ways into the AV conversation as well. Alphabet (parent of Google and Waymo) recently signed a deal with Avis to manage their fleet.  While Apple signed a deal with Hertz to lease vehicles from the car rental giant to test their AV technology.

The types of ways in which these partnerships may develop are starting become clear, as Avis owns the car sharing company Zipcar. Waymo executives have indicated that this was one the selling points for the Avis partnership. Zipcar already has a distributed fleet of vehicles around many urban areas that are available on demand for people needing a short-term car rental. While neither Apple nor Waymo appear to have signed any exclusive deals here, they are pointing toward, at least in the Waymo-Avis deal, a shared ownership model for cars and AVs in the future.

To Mix or Not Mix, That is the Question

The deployment and impacts of autonomous vehicles, the sharing economy, and e-commerce are going to impact different parts of metro areas differently.  How street space is planned in the suburbs will be much different than in denser, mixed use urban areas or nodes.  For the walkable or bikeable places of our cities – which are increasingly in demand – it is not clear how to make a workable mix of autonomous vehicles and walking/biking human beings.  One solution is to completely segregate the modes since any human can stop a vehicle simply by being present in front of it.  Another approach is to criminalize that behavior (vehicles will have cameras and spatial location and knowledge of traffic light status, after all, making it easy to take a picture and send an automated ticket), and another option is to simply eliminate the car from urban spaces and prioritize walking, biking, and transit since they are the most efficient ways of getting about (and healthy, less polluting, and happy-making).  This article from the Guardian nicely frames these issues.  Which alternate future do you want?

US Federal Government taking more steps toward more robust AV policy

Writing software to navigate the driving characteristics, challenges, and rules of cities around the world is clearly a challenge. Some in the automobile industry are nudging the US Department of Transportation to develop more specific policies for AVs. Transportation Secretary Elaine Chao has indicated that a new set of voluntary guidelines will be issued by the end of 2018—though they will remain voluntary.

Ford Motor VP Ken Washington is asking the US federal government to do more:
We must have concrete federal guidelines and additional data to inform how we will bring this technology to market in a way that will cause more good than harm.”
Much of current the current talk of AV policy has surrounded the technical aspects of AVs—with very little attention paid to the secondary effects of AVs. Faculty, staff, and students with Urbanism Next are taking this gap in attention seriously. We will be releasing one of the first looks at secondary effects on local government budgets (expenditures and revenues) later this month.

Engineering scholars recognize the complexity of the urban environments as one of their key challenges moving forward as well. For example, they recognize, as compared to highways, AVs in cities require “progress in both transport technology and infrastructure to effectively deal with the increase in operating velocity of autonomous systems as well as the complexity of urban environments…. Different cities have different driving characteristics and traffic rules, and therefore what works in one environment, may need a lot of refinements if it’s applied to a different environment.”

AVs are going to be a global phenomenon, thus adaptation to AVs will take on many forms and we are now at the moment in time where we have the potential to have the most impact on how cities adapt or shape their future with AVs.

Will AVs bring doom & gloom or a big boom to the economy?

Intel and Strategy Analytics researchers are claiming the impact of AVs will yield a $7 TRILLION boost to the economy. They feel that the effect of AVS “could add as much as $2 trillion to the US economy alone by 2050,” according to a recent article in Wired magazine. Much of the money will, expectantly, go to manufacturers of the vehicles but “mobility-as-a-service will supplant the value of vehicle sales as core sources of shareholder value creation” in the long-run the report says.

How do they suggest you get a share of the benefits?

  1. Work in data (“Storing, organizing, and analyzing that data will be a big job”);
  2. Work in IT (“someone needs to tend to these data architecture beasts—not crunching the numbers themselves, but making sure the systems are humming along as they should”);
  3. AV mechanic (“Robocars won’t need you, but they’ll still need mechanics”)
  4. Something we don’t yet understand (“No one has yet predicted how many jobs the autonomous future will create, and that’s partly because the future is so messy”)

Looking Beyond the Personal AV to See a Larger Potential for Citywide Connectivity

The shape of our current urban spaces and transportation networks are shaping up to strongly influence the approach cities and countries are taking toward AVs. The American influence on AV developing, not surprisingly, is pushing somewhat toward a personalized vision of AVs. A number of European countries and cities are taking a more public transit-oriented approach to AV development.

A recent article in the New York Times dives into these differing approaches.

“The coming age of driverless cars has typically centered on Silicon Valley highfliers like Tesla, Uber and Google, which have showcased their autonomous driving technology in luxury sedans and sport utility vehicles costing $100,000 or more. But across Europe, fledgling driverless projects like those by Deutsche Bahn are instead focused on utilitarian self-driving vehicles for mass transit that barely exceed walking pace.

The article further points out that AVs in combination with existing public transit systems have the potential to greatly “reduces the complexity required to make the machines navigate across an entire city.”

AV technology has the potential to extend beyond vehicles on roadways, as a number of Dutch cities are realizing. A number of leaders in that country see a future with “driverless boats” that can ferry passengers around the city and potentially “autonomous boats will be able to automatically dock with each other, creating on-demand bridges and walkways whenever necessary.”

AV Micro-Transit Could help TOD and First/Last Mile

One of the larger concerns with the rise of AVs and ride-sourcing services has been its potential drain on transit riders that could  – even with only a draw on few riders –  make transit itself economically infeasible.  This article from the New York Times discusses the development of AV micro-transit 12 person shuttles that might be just the boon transit has been looking for.

These shuttles are being developed in Europe and focus on slow (20 mph), limited range travel.  While these shuttles would never be able to provide desirable alternatives for cross town trips, they are ideal for getting people to and from transit.  Due to the shared destination/origin point of transit, this type of shared mobility on demand would greatly extend the catchment and draw of main line bus and rail transit.  The limited areas it would travel to and from (around a transit stop) make the technology much easier to attain in the near term.  This provides a hopeful version of the future where AVs might actually help transit oriented development instead of destroying it.

More Retails Closings Projected This Year Than At Recession Peak

The bad news for retail continues with Credit Suisse’s report that 8,640 stores are projected to close this year.  That far eclipses the 6,163 stores that closed at the peak of the recession.  The culprit seems to be a combination of e-commerce as well as the over building and expansion of retail.

As similarly reported in previous posts, they are also projecting that a quarter of all malls in the country will close in the next five years with low-end malls being hardest hit.  This will not only affect local economies, but it will also leave communities with the task of figuring out what to do with large, vacant and deteriorating buildings in their midsts.  The effects of this will unavoidably expand well beyond any mall’s property lines.

Credit Suisse is also projecting e-commerce clothing sales to more than double to 35% of that market by 2030 compared to the current 17%.  This sector in particular will be interesting to watch as that shift could mean the closing of stores, but potentially also a shifting towards more omnichannel approaches and smaller ‘guideshops’ replacing current retail models (see Urbanism Next Research Papers for more on this).

STORE CLOSINGS – Full Year Estimates
Source: Credit Suisse

When Single Occupancy Vehicles Looked Successful

The typical U.S. commute trip fills a multi-seat car with a single human being (25% of capacity) and that car sits idle most of its existence (90% of the time).  This is an inefficient use of our limited roadway capacity, land for storing vehicles, dispersed settlement pattern and provision of services/utilities, use of fossil fuels, etc. But imagine if we look back at the single occupancy vehicle as a golden age of efficiency?

Autonomous Vehicles don’t need drivers, meaning that if we own them personally, many trips by car will be taken with no one inside.  An AV could drop you off at the market and circle the block until you are done.  It could drop you off at work and return home or other remote parking space.  An AV could be summoned to pick up your child at school and take her to soccer practice.  While there is certainly some convenience in any of these scenarios, a good portion of all those trips will have no occupants and thereby taking up limited and valuable space on the street.

This article by Howard Jennings of Mobility Lab discusses three ways to apply the principles of Transportation Demand Management (TDM) to AVs: 1) “policies should always seek to encourage AVs that move more people in fewer vehicles”; 2) “pricing models offered by automotive and tech companies should be structured to make shared AVs, not personal AVs, the model of choice”; and 3) city pricing models should be structured to disincentives the least efficient mode of transportation. including a fee for zero occupancy vehicles.

Urbanism Next Research Papers Series – Re-Imagining Retail

While we have been compiling research and articles on this blog for the last few months, we have also been working on our own research.  Today marks the start of our publishing a series of brief papers on issues related to Urbanism Next.  The intention is to introduce you to some key topics that will be affecting how cities develop as they face ongoing and transformative changes in technology.

The first paper is co-written by Galen Carlson and Nico Larco and is focused on Re-Imagining Retail.  Building on earlier posts about the challenges retail is currently facing, we look at the transformation retail is currently going through and the shift from brick-and-mortar, to e-commerce, to omnichannel approaches.  The paper describes trends and includes data and resources that can help you understand where we are at, where we are heading, and where you can learn more.

Look for additional papers on residential preferences, warehousing, and the effects of urbanism next issues on municipal budgets – coming in the coming weeks.

Autonomous Trucks – And a New Freeway Land Use

Autonous freight is just around the corner as many believe it will be the first transportation sector to shift to autonomous control.  That said, do not expect self-driving trucks to be cruising around cities just yet.  An article from SupplyChain247 looking at the advent of autonomous freight describes the next step like this: “This is likely how driverless trucks will work at its infancy: At the city limit, …[a] computerized truck hands off to a human driver who navigates the city streets to the destination. A human driver will still touch every load.”  Line hauls on the freeway will be autonomous, but this will connect to a transfer station where the an actual driver will climb onboard to make the final delivery, load new cargo, and bring the truck back out to the transfer spot.

Freeways will now need these transfer spots (modified truck stops?) and warehouses may have an even stronger incentive to move out beyond urban development to avoid the cost of the transfer, allowing trucks to come directly into the warehouse.

Sharing (AVs) is caring (for the environment)

Autonomous vehicles have been described as a heaven or hell scenario.  Many of the depictions of the hell scenario center on private ownership of AVs.  A recent report from the University of California Davis and the Institute for Transportation and Development Policy provides evidence to back this up.  Looking at three scenarios,  UCD and ITDP shows how congestion and emissions will climb under a Business as Usual or Electrification+Automation (without Sharing) scenario.

itdp

David Robert at Vox provides three lessons from this study:

Lesson one: the carbon work is mostly done by electrification, the urbanist work by ride-sharing

Lesson two: the scenario with the greatest social benefits requires the most policy support

Lesson three: geometry requires sharing

This new research and Roberts’ charge makes it clear:  there is a role for urbanists and policymakers to make the case for sharing.

Ride-Hailing Services are Getting People to Sell Their Cars (some people…)

A recent poll by Reuters/Ipsos (another article here about it) asked people selling their cars (nearly one quarter of Americans during this last year) why they were selling.  Of these people, 9 percent said they were explicitly doing so because they were now using services such as Lyft and Uber as their primary means of transportation.  A similar percentage said they would be selling additional cars and rely on these types of services for transportation within the following 12 months.

While these percentages are small, it could be early evidence of a trend towards less car ownership and truly having mobility as a service take hold.  The ramifications of reduced car ownership and increased use of ride-hailing services are tremendous – large reductions in automobile production, reduction of parking requirements, potential increases in density as the need for parking diminishes, wholesale redevelopment of parking – especially in suburban areas (think of completely redesigning every strip mall in America…).

Recent conversations we have been having with consultants and developers is already pointing in this direction.  Parking use is starting to dip – especially in larger venues as more and more people turn to Lyft and Uber.  Change is coming.

Brick and Mortar Retail Continues to Vanish

To add to the sobering news on brick and mortar retail in our earlier post, new articles point to continued weakness in the retail market and more store closing.  A recent WSJ article lays out what is currently happening and compares it to more historic trends to highlight its magnitude.  As this article is not publicly available, we are going to list a few of the key quotes below:

  • More than 2,880 stores closed from Jan – early April 2017.  That is twice the amount closing last year for the same period
  • If that trend continues, there will be 8,600 store closings this year – much more than closed during the 2008 recession.
  • 10 Large retailers have filed for bankruptcy as of mid April 2017.  This compares with 9 total large retailers in ALL of 2016.
  • Last year, E-Commerce sales increased from 10.5% to 15.5% of all retail.

Retail is experiencing a large transformation – and this will have a strong impact on brick-and-mortar stores – forcing many to close.  This will result in loss of property tax revenue, sales tax revenue, and will force communities to deal with abandoned buildings that bring down values and often increase crime.

Urbanism Next is Hiring! – Please Distribute!

SCI is looking to hire a Program Manager for our Urbanism Next Research Initiative.  This initiative – as you know – is focused on the effects autonomous vehicles, E-commerce and the sharing economy are having and will have on city form, development, and design.

This position will be in charge of managing the initiative which will include organizing research, developing relationships with partners in the private, public and academic sectors, organizing events, grant writing, and leading dissemination and outreach.

We are looking for someone who is a self-starter, smart, a team-player, detail oriented, and comfortable talking to a range of potential partners.  The position will be based in Portland.

If you know anyone who might be interested, please let us know and share the link to apply – https://tinyurl.com/urbnextpm.  A more detailed position description is also copied below.

More information about SCI can be found here: http://sci.uoregon.edu.

Feel free to distribute to your networks!  Thanks!
Best,
-Nico
SCI Co-Director
University of Oregon

 

A scramble for AV related attention may be wasting public resources

Not surprisingly there are a lot of states (or at least their leaders) scrambling for the attention that AVs can create. A recent article on CityLab points to some of the challenges of regulating and encouraging AV development, testing, and innovation.

For example, Michigan—a state with a long history in the automobile world—is positioning itself not just as a testing ground for AVs, but also a place where AVs can be developed and built (creating a lot of jobs). While other states that do not have Michigan’s automotive history might just be scrambling to get a little attention by allowing AVs to be tested in their states—perhaps in a way that gives away a lot to the developers by lowering regulatory barriers to testing.

The authors of the article point out that “the winning move for states in the competition for AV pilots is simply not to play” but rather to make a strategic decision about whether or not they want to be active or passive players as the technology develops. The scramble for attention could play well electorally but may be a waste of public resources and create distractions or worse.

AVs are coming and cities need to start preparing

In the wake of this week’s Portland charrette/workshop on the potential of AVs to transform urban spaces, a new CityLab article is right up our alley here at Urbanism Next.

A take away from the charrette and the article is that cities need to be proactive partners and be sure they are assertive as we transform to AV transportation. “…if cities aren’t learning anything from these partnerships, local officials and citizens are going to push back and say: Why do tech companies get everything and we get nothing?”

Regulatory capture is a real threat as traditional automakers try to block new comers from entering the auto market, but some sort of regulatory action will be necessary—it just needs to be designed in such a way to keep us safe without stifling completion. CityLab notes that “With federal policy, too, the goals of automakers may not always line up with what’s good for cities. Ford, General Motors, Toyota, Volvo, Uber, Lyft, and others continue to lobby congressional policymakers for a “national framework” regulating safety performance standards, so as to avoid 50 versions of AV requirements.”

What is good for auto companies’ bottom lines, may not be good for cities. The authors of the CityLab article note that “While the industry pushes for national AV standards, cities may want to retain local control over things like speed limits, designating special AV zones, and setting trip fees in order to meet the safety needs of their specific neighborhoods.” Balancing the needs of all levels of government will be a key challenge in the next 3-5 years, being proactive and thinking about these challenges is what Urbanism Next is all about. Benjamin Clark and Nico Larco will be releasing a white paper on some of the financial challenges and opportunities for cities in about a month. Be sure to check back here on the blog for more info on that white paper.

 

Impacts on Transit

Fehr and Peers have been modeling the impacts of autonomous vehicles on transit and their projections are dire.  Coupled with a 12-68% increase in VMT will be a 16-43% decrease in transit trips.  This would severely strain transit systems throughout the country – forcing many to close and constraining the network and service frequency of those that survive.  This has tremendous implications for equity concerns, development patterns, and congestion. The reduction of transit services will compound the traffic problems created by the predicted increase in VMT.  Eliminating transit would create gridlock in many areas as we simply cannot funnel as many people through a road segment in low occupancy cars as we can in a bus, train, or tram.  As Glen Bolen of Otak has said – ‘You can’t fix geometry, it’s fixed’.

New Regulatory Guide for AVs Released by the National League of Cities

The National League of Cities has released a first of its kind autonomous vehicle regulatory guide for cities.  AV technology is advancing faster than many cities expect, and faster than many managers will be able to handle their adoption. The report notes that:

“With the many benefits that AV technology promises, including reduction in traffic deaths, increased mobility for the disabled and seniors, reduced congestion, and enhanced connectivity for all demographics, cities have a unique opportunity to be proactive to not only engage in smart planning for AVs, but to also shape the policy around AVs to ensure such benefits are fully realized.”

The report suggests that cities:

  1. Develop their own safety and privacy guidelines related to AVs. Transparency will be the key to a successful innovation, the report suggests.
  2. Data will have real value to city management. “Cities should consider their data needs, and the relationship they seek to build with AV manufacturers as well as transit platforms and other mobility providers.”
  3. While federal AV policies are likely to be focused on safety, local and state governments have great opportunities to shape policy on how AVs shape our communities. “Cities have an opportunity to come together and lobby their state governments to advance their concerns around the safe operation of AVs in their communities, including insurance requirements and local approval of any proposed AV testing in a city.
  4. Look at procurement policies now to avoid future issues with the new technology. “Cities should assess their current procurement policies, and look specifically at whether these policies might inadvertently erect any roadblocks to purchasing the technology and smart infrastructure necessary to support AV deployment.”
  5. Policy coordination and development is going to have to be multi-disciplinary. “With technology like AVs, cities need to get the right people to the table, which includes urban planners, public works, information technology, procurement policy, and law enforcement. Modifications to existing codes may be appropriate, or cities may have to think about the development of a new autonomous vehicles or smart infrastructure code.”
  6. Be open to dialogue with residents and don’t assume they want AVs. “Cities should engage in an open dialogue between all their residents and respond to varying levels of acceptance of this technology.”
  7. New infrastructure will be needed, make sure it is not left off the table as AVs roll in. Cities should “link funding with new technologies to additional funding for capital improvements as well as existing maintenance.”
  8. Data and analysis will become a bigger part of city management—be prepared. “The data processing requirements needed for cities to take advantage of the data being generated within them is often out of reach of many small and mid-sized cities. Partnering with local academic institutions has given many towns and cities affordable access to the data storage and processing ability they need.”

(Note: scholars, like myself, here at the UO are glad to work with cities interested in exploring this issue.)

Online Retailing Giant Amazon to Start Collecting Sales Tax Nationwide

Amazon is going to start collecting sales tax in all US states that collect sales tax on products it sells. Roughly half of all goods sold on Amazon are sold directly by Amazon (and something like half of e-commerce goes through Amazon, so this yields about ¼ of online sales), so this will have some seriously positive impacts for state and local governments across the nation. One of the largest complaints that brick & mortar retailers have had for years is that e-commerce retailers like Amazon have an unfair price advantage because they were not charging sales tax.

It is reported that “This tax loophole also means states are missing out on an estimated $23 billion annually.” That is a big hole, and the move by Amazon is going to slowly plug that hole and start to level the playing field.

As Amazon moves to same/next day delivery they have needed more distribution centers, thus making the sale tax dodge harder and harder for the online giant. The move by Amazon is a foreshadowing of what is to become of online retail and what it means for state and local governments. So while the demise of big box retail seems eminent, the revenue projections may get rosier for governments that are dependent on sales taxes.

Think Out Loud – Urbanism Next on the Radio!

Urbanism Next was recently featured on public radios ‘Think Out Loud’ program.  Although mostly targeted on autonomous vehicles, in keeping with this blog, the interview focused on the secondary impacts on cities. You can listen here or take a look at an article about the interview here.

E-Commerce is Shifting/Closing Traditional Retail

A series of articles together paint a dire picture for traditional brick and mortar retail.  Overall, the structure of retail is changing – online sales are growing, stores are becoming showcases for sales that will happen on mobile devices, and warehouses are continuing to boom.  E-Commerce is continuing its influence and increased its rate of growth from $30 billion per year from 2010-2014 to $40 billion per year in the last three years.  This has led to a disappointing jobs report in March with retail losing nearly 35,000 jobs in that month alone.   This is part of a larger trend of job losses and store closing.  The US currently has more than six times the amount of retail space per capita than Europe and that historic trend is starting to feel like a bubble.  Since October, the US has sees a loss of 89,000 jobs in the retail – more than all of the employees in the US coal industry that was the poster child of economic hardship during the presidential campaign.

All of this, coupled with a booming economy, seems to suggest that we are seeing a categorical shift in retail and not a momentary blip.  Brick and mortar stores will continue to close – and this will continue to create issues for land use, urban activity, tax revenue, and labor.

 

Scenarios of Technology Adoption in the UK

A recent report by RAND Europe takes a closer look at potential scenarios of technology innovation and the impacts on cities and design.

The scenarios touch on several areas of interest:  autonomous vehicles, next-generation connectivity, user apps and Big Data, advanced manufacturing, Internet of Things, and sensors in infrastructure.

The authors look at three scenarios and depict what the future might look like:

  • Driving Ahead:  AVs and shared vehicles lead to a growth in vehicle travel and congestion.
  • Live Local: Digital substitution for travel and environmental concerns limit the adoption of AVs, while road pricing is sophisticated, leading to lower per capita travel.
  • Digital Divide:  Inequality leads to varying rates of adoption of technology; businesses move away from central London, and a peer-to-peer and sharing-based economy emerges.

Focusing on London, this thorough report goes on to look at barriers and enablers for adopting key technology, focusing on legal and regulatory frameworks.  The authors offer a strategic roadmap of policy and innovation investment.

Focusing on these nuanced details is important.  As the authors point out, these technologies will change transportation, travel, and lifestyles, and we need a vision in order to prepare for it.

Read the full report: http://www.rand.org/pubs/research_reports/RR1377.html and a summary from Mobility Lab:   https://mobilitylab.org/2017/03/22/report-envisions-possible-paths-transportation-technologies-20-years/.

Tax rideshare or say goodbye to transit?

Carlo Ratti of MIT’s Sensable City Lab offers an ominous warning:  tax rideshare, or destroy public transit.

Citing data on the per-mile cost of ridesharing services, and projected costs of self-driving costs, Rotti says ” In the US now, the cost of a car such as Uber per mile is $2.20 ($2.85)…”When you get to self-driving cars and you don’t need to have a person any more, and [when] a self-driving car can run 24/7 and is used more efficiently, the cost per mile is anything between 30 and 60 cents. Now if that happens, nobody will take the subway.” (Bleby, Australian Financial Review)

In his interview with the Australian Financial Review, Ratti brings up important points about pricing rideshare and AVs, and discusses the need to consider city design.

Read more: http://www.afr.com/real-estate/planners-beware-car-sharing-could-destroy-public-transport-carlo-ratti-says-20170320-gv2c28#ixzz4dVxEU4eQ

New Report Aims to Gauge How Adaptable American Cities Will Be To AVs

A recent study by INRIX Research took a close look behind the hype of AVs effect on cities. In their report, they try to determine which type of cities might be better (or worse) hosts for the pending AV invasion.

In their report INRIX looked at the top 50 US cities, compiling data from 1.3 billion car trips to try and determine the types and lengths of trips that would best suit AVs versus the current fleet of vehicles.

Cities ranked higher or lower on INRIX’s scale of adaptability based on typical trip length. With average trip length data INRIX awarded lower scores for cities with longer average intra-city trips and higher scores for cities with shorter intra-city trips. They found that New Orleans, Albuquerque, Tucson, Portland (OR), and Omaha were the most adaptable to AVs. While Detroit, San Francisco, Baltimore, and Forth Worth were the least adaptable.

Link to the full report can be found here: http://www2.inrix.com/2017-autonomous-vehicle-study

Rethinking the Parking Garage

With the large projected reduction in parking needs arising with the proliferation of AVs and particularly shared AVs (around 90% less spots needed) there is a growing question of how we transition between current needs and this looming future.  A new article in Wired looks at how architects are re-thinking parking garages so that they can function today, but can be easily converted in a shifting future.  This will be an important issue for architects and developers to address.

(Source: LMN Architects)

 

AV’s Effects on Labor – It isn’t good…

[This post is slightly outside of the central focus of the blog – secondary effects on city development and design – but the issue of labor shifts due to the rise of autonomous vehicles is both important in itself and we believe could be a rallying cry to raise awareness of the effects of new technologies on cities.  Concerns about labor need to be addressed and can help raise the visibility of concerns about changes in land use, design and development.]

A recent report titled ‘Stick Shift’ by the Center for Global Policy Solutions is one of the first comprehensive attempts to address the widespread effects of automated vehicles on the labor market.  In line with many early predictions, AVs will lead to large shifts including a loss of more than four million jobs. While troubling in itself, this is compounded by the fact that these are jobs that are currently giving a wide swath of the population with low levels of education an alternative with decent pay that is keeping families out of poverty.  This is especially troubling for minority populations “who are overrepresented in these occupations and who earn a ‘driving premium’—a median annual wage exceeding what they would receive in non-driving occupations” (given their level of education).

There is also a political dimension to this issue as “The top five states with the greatest percentage of workers in driving jobs in rank order are Mississippi (3.70 percent), Wyoming (3.64 percent), West Virginia (3.60), Idaho (3.45 percent), and North Dakota (3.44 percent).”  How this type of change plays out in light of our current national narrative on work is difficult to predict, but would seem to only exacerbate current red state/blue state tensions.

The report ends with a series of policy recommendations that are necessary but also difficult to imagine in the current political climate.  This collision of new technologies and real world pain and disruption in the labor market will somehow, however, need to be addressed.

The Blight of Failing Malls – A Rising Burden of E-Commerce

A new article from Business Insider looks at the continuing decline of indoor malls around the country.  Of the 1,300 malls in the US, a staggering 310 are ‘in high risk of closing’.  The largest culprit is the loss of anchor tenants like Macy’s, JC Penny, and Sears – all of which have been seeing large numbers of store closings in part due to the rise of e-commerce (see earlier post about this).

The article discusses the range of consequences of these closings including a rise in crime, increasing blight in the surrounding area, and the loss of municipal revenue coupled with a rise in costs for needed fire and police services.  Dead malls – and the e-commerce that is contributing to their demise – have large repercussions for cities.

As e-commerce expands and potentially reduces the number of strip malls as well (in addition to enclosed malls), these repercussions will amplify.  A recent conversation with the planning director of a suburb city focused around the devastating effects the reduction of strip malls and commercial activity in his city would have on municipal revenues.  This was especially difficult as he saw limited abilities, compared to more urban locations, for suburban cities to redefine themselves and create vitality, draws, and their associated revenues.

Ridesharing is killing transit! Or is it?

A new report released by Schaller Consulting looks at the impacts of app-based ride services (or Transportation Network Companies –TNCs– like Uber and Lyft.)  And the findings are interesting, but complicated.

As the author of the report pens in “Turns out, Uber is clogging the streets.” Although “Uber promised to take 1 million cars off the road in New York City,” since June of 2016, passenger volumes for TNCs have tripled up to 500,000 per day. TNCs drove 600 million miles and subway and bus ridership fell.”

If what we are seeing is a first hint of a larger shift of TNCs siphoning off transit trips, then the implications could be large and painful.  Transit would decline, equity could become more of a problem, and many cities would start to run into exasperated issues during rush hour as everyone who would be on transit was now in cars – a large geometry/roadway capacity problem in big cities.  Imagine most of the people on NYCs subways all of a sudden trying to move along streets in individual cars.

And the scale and speed of the growth of TNCs should give us pause – tripling of trips in just a few months is a growth rate where unintended consequences will sneak up on us quickly.

But Laura Bliss at CityLab encourages us to consider the nuances in the Schaller report, asserting that TNCs fill gaps where taxis are hard to come by or transit access is less available.  In many ways, they are  increasing mobility and accessibility.

Both Schaller and Bliss encourage cities to avoid being complacent and to get out ahead of these issues. The same will be true for AVs.

How should city officials/planners respond?

  • Make transit more appealing
  • Implement road pricing during times of congestion
  • Make TNCs pay more for streets to encourage customers to use transit instead
  • Reduce demand for single occupancy vehicles in general
  • Demand more detailed data from TNCs to gain a better understanding of the dynamics