Category: Parameters/Inputs

These are the issues surrounding AVs and E-Commerce that will affect urban form and development

Amazon Is Looking to “Fix” Some Inefficiencies with Some Potentially Positive Impacts

Photo by Alfonso Navarro on Unsplash

One-click ordering. Free shipping. The ability to have millions of different goods delivered directly to your doorstep within days, or even hours, of ordering—in its quest for growth, Amazon has often seemed willing to go to extreme lengths to get consumers making purchases from the site time and time again. Now, according to a recent article from the Wall Street Journal (paywall), Amazon is starting to tighten its belt and think more about the bottom line. It has started targeting items it has internally designated as CRaP, or “Can’t Realize a Profit.” Items that fall under that category are typically fairly cheap, under $15, but they are heavy, making them more expensive to ship. Beverages are a big one in this category. In order to “fix” the issue, Amazon is working with suppliers to streamline processes, such as having some vendors ship directly from their own warehouses, or changing package amounts. As the Wall Street Journal reports, Amazon used to sell a 6-pack of Smartwater for $6.99 as part of its “Dash” one-click reorder program. However, the company worked with Coca-Cola and changed the Dash default amount to a 24-pack for $37.20 to make it profitable for Amazon. That 6-pack isn’t unavailable—it’s now an item in Amazon’s Prime Pantry whereby consumers can choose multiple items to fill up one box in order to reduce shipping costs.

It is interesting that Amazon now seems to want to rectify some of the system inefficiencies it is responsible for creating. Having multiple items ship separately just to get to them to consumers more quickly has never sounded like the most sustainable option, both financially for Amazon, and for the environment. Encouraging consumers to box multiple items together into one shipment instead? Having some suppliers ship directly from their own warehouse as opposed to sending their items to an Amazon facility to be shipped from there? Amazon may be more focused on its bottom line, but these shifts could have important environmental benefits since an optimized system with fewer deliveries equates to fewer trips, which means reduced greenhouse gas emissions. And goodness knows we need that. As Streetsblog noted just today, we absolutely have to reduce driving if we’re going to be able to combat climate change.

Shaping Transportation Through Pricing

Cities are beginning to consider the potential impacts that autonomous vehicles will have on their transportation systems and whether those impacts can be shaped to support city goals. A recent article from The Economist explored how pricing can be used to shape the outcomes of autonomous vehicles.

The article offers ways that AVs can mitigate certain negative impacts created by cars over the past century. The negative effects that vehicles and vehicle infrastructure have inflicted upon cites, like congestion, sprawl, and ecological damage, could all be reversed through the reallocation of space that is currently dedicated to cars. Alternatively, these problems could get worse if the use of AVs is not effectively managed.

As the article states, “It all depends on the rules for their use, and in particular the pricing.”

It is suggested that road pricing will become more feasible due to an AV’s ability to recognize where the vehicle is at all times, allowing for better congestion management. Ride pricing can also be used to reduce congestion, making peak trip times more expensive.

In suburban job centers, public transit systems that have prioritized commuter movement into the central city often no longer match commuting trends of the region. While AVs provide a cost-effective opportunity for ride sharing companies or transit systems to move people more efficiently between suburbs, they could also encourage sprawl by allowing people to live even further from their place of work. Again, pricing mechanisms can be used to discourage this behavior.

Lastly, the current auto-oriented transportation system dedicates large amounts of valuable land to parked cars. If AVs reduce the need for parking, this land can be repurposed for higher value uses, and in some cases can even transform the land to provide valuable ecological functions. The Economist argues that the current overuse of space for parking is due to an improper pricing scheme. Essentially, the negative externalities of cars have not been appropriately included in their cost of use. The authors close on the hopeful note that this time around, cities may have learned from their mistakes and will price AVs appropriately to achieve their desired outcomes.

Steph Nappa is a Master’s Candidate in Community and Regional Planning and an Urbanism Next Fellow at the University of Oregon.  She is examining how to re-design city streets to prioritize bicycles, pedestrians and transit in an era of autonomous vehicles.

AVs to bring the Grocery Store to You

By the end of 2018, you may have groceries at your doorstep without a driver. Kroger is working with Nuro, a company started by former Waymo employees, to develop a self-driving delivery vehicle for groceries. Kroger already delivers groceries in many markets it serves, so this would a service that would allow the company to no longer send out drivers. This may be evidence of some of the first jobs lost due to AVs, but depending on the demand for this service it could be just the start of adding more jobs (people selecting and bagging the groceries for the AV delivery).

Kroger’s Delivery AV (Andrew Brown/The Kroger Co. via AP)

While the second model, being worked on by Robomart, in development is a mobile grocery store. Robomart would bring the store to you. Based on the public images of the vehicle in development, this vehicle would primarily stock fresh fruit and vegetables. They are counting on people’s hesitation to allow others to select fresh fruits and vegetables.

(photo via Robomart)

Like the Domino’s Pizza AV delivery pilot project, these uses of AVs are likely to be coming soon to all types of goods and services that currently have brick and mortar presence in our lives.

 

Online sales can now be taxed after Supreme Court rules in South Dakota v. Wayfair

State and Local budget officers around the country released a collective sigh of relief this week as the Supreme Court ruled in their South Dakota v. Wayfair ruling that online retailers can be forced to collect sales tax. In a ruling from 1992, known as the Quill ruling, the Supreme Court had previously ruled that retailers without a physical presence in a state didn’t have to collect sales tax for catalog orders. The thought for many at that time had been that sales tax collection was too complicated for small catalog (and eventually online) retailers to charge the correct rates and remit payment accurately. As Supreme Court Justice Kennedy noted in his majority opinion, “States may not impose undue burdens on interstate commerce.” In the past, the collection of sales tax was seen as an undue burden on interstate commerce, but with the advent of technology and spread of online retail, this challenge became less and less of a burden.

As the Tax Policy Center points out, this “new” ability of states and local governments to collect taxes is not a new tax at all, but rather this tax revenue is “a tax that most consumers already owe.” (You are typically asked how much you purchase online when you file your income tax return and asked to pay for uncollected sales tax–though most people ignore this request.) As we have previously written about here on the Urbanism Next blog, the amount of tax that has gone uncollected because of the previous Quill ruling, some estimate this to be as high as $34 BILLION annually (for the whole US). In the Wayfair ruling Justice Kennedy was right to note that “Quill creates rather than resolves market distortions. In effect, it is a judicially created tax shelter for businesses that limit their physical presence in a State but sell their goods and services to the State’s consumers, something that has become easier and more prevalent as technology has advanced.” Online retail was/is creating market distortions, as any local retail could have told you for the last 15 years or so. And finally, Kennedy notes that the US government could no longer rely upon an “anachronistic rule that deprives States of vast revenues from major businesses.” This realization that online retail is just retail will help fill holes in state and local budgets that have been growing and growing. The Quill ruling was, for some online retailers, creating an incentive to not invest in brick-and-mortar retail because they didn’t want to comply with the sales tax provisions. With the Wayfair ruling now the law of the land, there may be some real positive outcomes for establishing some physical storefronts online retailers that they had been hesitant to do.

 

Naturally, states that have taken advantage of the no sales tax business are not particularly happy about the ruling. New Hampshire is home to Wayfair and other online retailers has seen its political leaders calling the Wayfair ruling ‘disastrous.’ Perhaps for them, but not for the rest of the country.

 

 

 

 

However, the Wayfair ruling doesn’t resolve all sales tax questions. The Tax Policy Center notes that “While the Court gave states broad leeway to collect sales taxes, it left many questions unanswered. For instance, should tax be collected based on the location of the seller or the buyer? If the latter, should it be based on a billing address or a shipping address? Should small firms be exempt from the requirement to collect tax? If so, how should small be defined?” This means that Congress can and should act soon to clarify these questions so that states and local governments can begin to plan more appropriately for their future. Until Congress acts, the states have the authority to enforce and collect sales taxes as they see fit. For the most part, states have indicated that they will only collect sales taxes for future sales, but that doesn’t mean a state could look backward and collect on sales from prior years. Given that most online retailers didn’t collect the sales tax, they may be liable for paying them nonetheless, which could pose a hardship on those retailers. This backward question seems like one that would be politically hard to justify for many states and local governments, but only time will tell how tenaciously it is enforced.

 

 

 

Changing Parking Infrastructure with Autonomous Vehicles

While much has been said about the impact autonomous vehicles could have on the demand for parking, less has been said about what to do with the parking we have now, or what we should do with parking that has yet to be built. Parking can be split into three categories: street parking, surface lots, and parking structures. Street parking is addressed mostly through road diets in speculative pieces, and surface lots are equally easy to use as a flat, blank slate to be reinvented into something else. But what about parking structures?

Parking structures are both a challenge and an opportunity for innovative architects. They’re concrete structures with blocky columns, sloped floors, ramps between floors, irregular ceiling heights, and awkward floor plans. None of these attributes make them ideal to remodel and given the uncertainty regarding how much parking we’ll need in coming years cities may feel hesitant to take action just yet.

However, this is not a ubiquitous opinion. A few cities have been recognized for plans to turn parking lots into other uses; while not as difficult to do as parking structures, it demonstrates that cities aren’t thinking they need as much parking as they have on hand. Eventually, more articles will be written about converting parking structures into affordable housing, office space, or other uses. Here is an example of a proposed parking garage in Seattle that is convertible to residential space. For existing parking structures, remodeling their husk into a new use could be difficult and expensive, but not impossible. Here is an example of a difficult space – an abandoned subway restroom – being turned into a home by a British architect, and here a very skinny corner parcel in Japan was turned into an apartment building. These are not spaces that are considered prime real estate for redevelopment; they are not large spaces, they have funky shapes to work with, and most people would consider it a difficult endeavor to convert the space to something new and useful. But, if we can build apartments in geometrically restrictive triangles and dilapidated public restrooms, surely a rectangular, multi-story building in the heart of downtown shouldn’t be an insurmountable challenge?

Designing new parking structures poses different challenges and opportunities. Some cities are eliminating parking, but others are continuing to face a parking deficit that they don’t think autonomous vehicles will arrive in time to fix, or, that autonomous vehicles will still need lots of space to park (even if the cars are able to park closer together and line up headlights-to-taillights). Though the design of AVs is not completely clear, we know a few ways that parking garages could be more compact because of them. AV-ready garages could be re-designed:

  • Parking spaces could be narrower, since passengers are likely to be dropped off at their destination and never set foot in the parking garage itself, cars won’t need the space to open doors. Aisles could be narrower as well because AVs drive more precisely.
  • Parking spaces and aisles will likely both change sizes to reflect the size of vehicles, which might be stratified into a floor for traditional looking cars (personal use) or for rectangular shuttles (transit storage).
  • Parking garages could use charging capabilities, and could possibly incorporate car wash stations.
  • Loading lines could maximize efficiency and eliminate aisles. Assuming all cars in a garage are automated, instead of the traditional layout of singular rows with aisles in-between, loading lines without space between cars or aisles could be used for maximum efficiency (this would work for shared cars in which the car at the front of the line can be deployed for any rider).

Graphic Source: Designing parking facilities for autonomous vehicles by Mehdi Nourinejada, Sina Bahrami, Matthew J. Roorda

The previously listed considerations account for changes in technology, but not for changes in parking demand. Parking structures should be retrofitted to non-parking uses as demand for parking decreases; turning the more opportune floors of a structure (street level for connectivity, or higher stories for better lighting or views) to people-related uses, like this. To do so, new parking garages need to be re-designed to:

  • reduce the number of columns, and space them so they don’t disrupt the living room that may inhabit the space in future
  • use flat floors
  • eliminate ramps, or use ramps that are easily integrated into a floor plan;
  • Increase ceiling heights to make room for insulation, drywall, and the other building necessities of interior design without becoming too short for comfort;
  • Plan with the future floor plans of housing or office space in mind;
  • Allow for natural lighting. The cars won’t appreciate it, but future tenants will. A concept can be found here.

Although autonomous vehicles aren’t here yet, widespread adoption of ride-hailing services has already seen to decreased revenues for parking lots and garages. Parking lots are being bought and repurposed by developers in large quantities. Green Street Advisors, a California based real estate research firm, projects that parking needs in the US will be cut in half over the next 30 years due to a combination of ride-hailing and autonomous vehicles. It’s time to make plans for our changing parking needs, both from the effects we’re seeing today and the effects we’ll experience soon.

Jenna Whitney is a Master’s Candidate in Community and Regional Planning and an Urbanism Next Fellow at the University of Oregon.  She is examining how cities are planning for a multimodal future in the era of autonomous vehicles.

E-commerce may not be the only influence of store closings in the US

There are various opinions about the role of e-commerce has had on the brick and mortar store and decline of in-store shoppers. Some articles argue e-commerce is the main contributor to store closings today. Further, as technology becomes more advanced and delivery services more efficient (including the adoption of AVs for delivery), the retail apocalypse is definitely approaching. However, other emerging articles are erring on the side that while the phrase ‘retail apocalypse’ makes for an eye-catching headliner, it might not be telling the whole story. If physical stores are actually dying, some argue, why are stores like Dollar General, Ulta Beauty, and Nordstrom Rack still announcing locations of additional stores?

Rather than placing all the blame on Amazon for this new phase of retail, an article published by Bloomberg states that the US was bound to see a shift towards smaller retail footprints because we overbuilt retail space in the 1980s and 90s. The author also assumes that even without the rapid integration of e-commerce, consumer behavior today-particularly of Millennials would still prefer “the experience factor” of shopping. Different from past generations, it is now more important than ever for stores to be “unusual and delightful.” They need to create true destinations for people to enjoy. Perhaps retail isn’t dead altogether, but boring retail is.

Another recent article published in The New Republic also argues e-commerce isn’t the only driving factor of a shifting retail market. The writer postulates that many stores closures and bankruptcies can actually be attributed to an even greater threat… debt, which explains why profitable stores such as Toys ‘R’ Us had to close their doors earlier this year. This article states that in reality, e-commerce might have only played a minimal role in the company’s demise, while the larger issue is that the company acquired an astounding $5 billion debt with interest payments of $400 million per year after it was bought by a private equity firm in 2006.

Whether you agree or disagree with the retail apocalypse and/or the driving factors of a shift in retail, Forbes writer Steve Dennis puts it best, “Who cares?” Yes, while the causes and trends do matter, they only matter to an extent. The impacts of shifts in retail are troubling for communities, regardless of the causes.  The one thing that we should all focus on and know for a fact, is that retail is changing. Is your community ready? How do you see it adapting towards the future of retail space?

 

The Amazonian Effects on Local Revenue

Amazon has been subject to criticism over the years for not paying sales taxes. Initially, Amazon and other retailers paid taxes in states where they had a physical presence. By 2017, Amazon began collecting sales taxes for all states that levy such taxes (as we reported here), though the retail giant still does not collect taxes sold by third parties (except in Washington and Pennsylvania.) As Ben Casselman reports in the New York Times, collections at the local level are problematic. This raises important considerations from a local budgeting perspective. Cities are losing property tax revenue and local sales tax revenue as retailers shutter because of losing out to e-commerce like Amazon. Even worse, the lost local sales tax revenue is not being replaced as residents purchase goods online instead of at brick and mortar stores.

Source: Institute on Taxation and Economic Policy

Collecting local tax revenue is complicated – in 37 states, local governments can levy their own taxes. But collecting and remitting these taxes is not negotiated as part of the deals between the states and Amazon. A recent report by the Institute of Taxation and Economic Policy outlines some of the challenges. It is important for cities to realize the stakes and work with states and e-commerce to collect taxes.  As Casselman writes: “(the issue) is less the fault of Amazon than of state tax systems that don’t require, and in some cases don’t allow, online retailers to collect local taxes.” It’s easy to understand why large retailers may not want to negotiate with each of the hundreds of local jurisdictions – but states can pass legislation or negotiate on behalf of the local jurisdictions within their state. That’s particularly important in states that don’t require collection of taxes unless the business has a local presence.

 

Amazon not fulfilling their end of cities’ investments?

A recent study published by the Economic Policy Institute (EPI) might have communities rethinking the costs and benefits of investing in Amazon warehouses.

The report announced that US state and local governments have offered Amazon a total of over $1 billion in tax revenue to lure Amazon warehouses to their communities. Amazon has expanded their operation from 10 warehousing centers in 2000 to approximately 100 centers across the nation today. Why are cities investing so heavily in Amazon locations? Warehouses can employ anywhere from hundreds to thousands of people, which is fairly enticing for cities that have high rates of unemployment or lack a diverse economic base. Not to mention the attractive contributions that Amazon provides to communities where their employees live.

But, the new EPI’s report argues that the job growth generated by Amazon warehouses is merely an exaggerated perception. Many cities may notice the percentage of warehousing sector employment increase (30%), but Amazon warehouses are not a silver bullet to significantly boost the overall employment rate. In fact, the report discovered that in some counties the total employment rate had actually decreased since Amazon warehouses opened.

The release of the study comes at an interesting time. Last fall, Amazon announced their search for a second headquarters (HQ2). Over 200 cities applied for the bid. The new headquarters was estimated to generate over 50,000 jobs and add $5 billion to the local economy. Cities offered amazing and enticing planning strategies to competitively attract Amazon to select their proposal; many offered millions of dollars in tax incentives, promises to invest in rapid transportation modes, and some even offered to de-annex land for Amazon, and the list goes on. But latest EPI report raises questions about these incentives and enticements; it joins a small but growing chorus of people who expressed concerns about offering Amazon deals that may be too good to be true.

The EPI Report urges local communities to slow their roll on handing out tax incentives to Amazon and to stop looking for such short-term solutions. Their advice to cities? Focus on long-term strategies and more traditional investments to spur economic development—specifically, invest in efficient transportation and quality public education.

The AV retail experience is coming

“Today, you have to travel to the store. In the future, with e-Palette, the store will come to you!”

Akio Toyoda, President and Member of the Board of Directors for the Toyota Motor Corporation recently announced the e-Palette; a fully electrical autonomous vehicle (AV) that can be used for just about anything including being an at-your-door retail “store”. Toyoda states the e-Palette will not be any “ordinary” electrical AV—it will extend beyond the mobility of people and will fill a societal need to mobilize services and commerce.

The e-Palette will be revolutionary in the retail market because not only will it deliver a customer’s order, but potentially a range of options – truly bringing the store to you.  Imagine ordering a pair of shoes and having multiple pairs of those shoes in a variety of sizes arrive at your door for you to try on. There will be no driver or need to travel your local centers of commerce. While this may be unimaginable today, it might very likely be the next generation’s retail experience. Toyota, along with partners like Amazon, Uber and Pizza Hut hope to launch the e-Palette by 2020.

The e-Palette has the potential to bring the convenience of retail to an entirely new level and it could have positive impacts such as reducing the number of single-occupancy trips per day and decreasing vehicle miles traveled per person. As people drive less, motor vehicle lanes could be reallocated to additional sidewalk space for pedestrians or to increase areas for curb access. But the e-Palette could have negative implications as well, such as the deactivation of downtowns, increased store closings, increased rates of social isolation and disengagement from the larger community among residents.

In response to these concerns, what are critical strategies cities can plan for to incentivize active downtowns, retail centers, or plazas? Additionally, the e-Palette will inevitably require new tax policy and mobile-retail regulations in general. How will the e-Palette concept be integrated into the budgetary needs of a city?

If you are interested in learning more about thee-Palette, you can watch the press conference here.

 

Interested in learning more about the retail apocalypse or the role of e-commerce in cities of the future? Join us at the Urbanism Next Conference where a series of leading scholars and practitioners will present their research on “Are stores doomed?”

Is Ride Share the Cure?

In discussing how the future of transportation will function, and in particular the future regarding autonomous vehicles, rideshare (Uber and Lyft) is often touted as a way to improve mobility and reduce the number of cars on the road, meaning less traffic, parking and pollution.

But, rideshare hasn’t been upholding this promise. Recent research shows that the introduction of Uber and Lyft to cities has increased congestion and air pollution, the combined number of taxi, Uber, and Lyft vehicles in Manhattan has increased by 59% from 2013 to 2017. Notably important is the fact that rideshare is increasing VMT by creating rides – a study by U.C. Davis transportation researchers found that between 49-61% of trips either wouldn’t have happened or would have been accomplished by transit, bike, or on foot if rideshare hadn’t been an option.

Many think Uber and Lyft function the same way AV will be used, but simply have drivers.  Thus, the initial research on the impacts of Uber and Lyft are troubling. Both rideshare and self-driving cars promise to eliminate the need for parking, improve safety, possibly reduce the number of cars on the road, and ease environmental concerns. However, a substantial amount of rideshare vehicles are idle without passengers at any moment in time, in Manhattan the number of empty Ubers and Lyfts is approximately one-third of the rideshare fleet.  The convenience of rideshare has not yet discouraged car ownership or reduced vehicle miles traveled, and until the fleet is electric, air pollution and GHG remain an issue.

So the question remains, how can cities prevent autonomous vehicles from increasing sprawl, adding to congestion, or continuing to emit GHGs? A few ideas such as the following might work:

1) Policies such as charging a fee for “zombie cars” (AVs without passengers) to discourage AVs from driving without passengers;

2) Mandating that AVs be shared instead of private;

3) Limiting the number of AVs on the road by relying on sophisticated algorithms to optimize the number of cars on the road based on the number of passengers hailing rides; and

4) Transitioning rideshare users to the higher capacity of public transit through various economic incentives or penalties. These are some examples of policies that cities could enact to curb congestion caused by rideshare and AVs.

Jenna Whitney is a Master’s Candidate in Community and Regional Planning and an Urbanism Next Fellow at the University of Oregon.  She is examining how cities are planning for a multimodal future in the era of autonomous vehicles.

Thriving and surviving retail sectors during a “retail apocalypse”

As writer Andrew Van Dam states in a recent Washington Post article, “retail is one of the biggest, most diverse sectors of the economy.” Not only does it vary in types of products sold (i.e. clothing, electronics, and food markets), but also range in size, specialized vs. big-box department stores, and upscale boutiques vs. discount stores. Therefore, it is not surprising that each sector is experiencing different impacts from emerging technology and shifts in the market economy, some are even defying the presumed certainty of the retail apocalypse.

While many sectors are struggling to keep pace with the competition, others seem to be thriving and even hiring new employees. According to Van Dam, retail employment only actually decreased 0.4% from 2016 to 2017. As it shows in the graphic below, this is comparatively mild to the hits of the two recessions since the late 1990s.

The overall employment impacts start to become more interesting when we look at specific types of retail that are being affected the “retail apocalypse.”

The retail sectors with the highest average monthly job loss Jan-Nov. 2017 are:

  • Department stores (excludes discount stores)
  • Warehouse clubs, supercenters
  • Pharmacies and drugstores
  • Electronics
  • Women’s Clothing

…and the retail sectors with the highest average monthly job gain from Jan-Nov. 2017 are:

  • Electronic shopping and auctions
  • Home Improvement Centers
  • Discount Department stores
  • Bridal, lingerie, costume and other clothing
  • Trophies, collections, art supplies and other miscellaneous

As shown in the graphic above, 4 out of the 5 sectors have been fairly consistent in gaining jobs for the retail economy, both from 2009-2016 and also in 2017. Discount Department Stores, which had previously experienced job loss from 2009-2016, saw an unprecedented spark of job gain in 2017. In general, all five sectors outpaced their job gain in 2017 compared to the aggregated job growth from the last 5 years. In general, there are more retail sectors that experienced job gain in 2017. Still, the total number of jobs that were lost is greater than the number of jobs gained.  The top job loss sectors, Warehouse Clubs/Supercenters and Department Stores, lost over 5,000 jobs in 2017.  This is nearly the total amount of jobs of all the top job gain sectors.

The retail sector lost approximately 66,500 jobs, which is striking given the economy as a whole added over 2 million jobs in that same period.

Nationally, these trends may seem relatively minor, but they can have lasting impact local communities. In some communities, job loss in these sectors could mean significant impact to local unemployment rates and the decline in property tax revenue.  How will cities that depend on these retail sectors as major employers adapt to job loss or store closings? And while impacts may seem minor in 2017, will this trend continue…should we start planning for a continual decline of retail employment for the future city?

The full graph of retail sector job loss and gain can be found here.

Interested in learning more about the retail apocalypse or the role of e-commerce in cities of the future? Join us at the Urbanism Next Conference where a series of leading scholars and practitioners will present their research on “Are stores doomed?”

Alexa, schedule a Whole Foods delivery

Photo by Anne Preble on Unsplash

That’s what some Amazon Prime members in Austin, Cincinnati, Dallas, and Virginia Beach might be saying today after Amazon announced that it will begin offering free two-hour grocery delivery from Whole Foods. As you might recall, Amazon rocked the grocery world when it announced it was purchasing the upscale grocery chain in August last year. Now, some customers will have the option of ordering natural and organic products from their local Whole Foods store and having it all delivered for FREE within two hours. According toBloomberg Technology, 90% of Amazon Prime’s 90 million users live within 10 miles of a Whole Foods, so the announcement of a free delivery service perhaps should come as no surprise. And from a cost standpoint, you can see how this would pencil out—instead of pulling items off a shelf in some distant warehouse that then have to be transported to local destinations, goods will come directly from a nearby store right to your doorstep.

Photo by Drew Beamer on Unsplash

This convenience does not come without implications, of course. For one thing, we could see an uptick in delivery traffic in the cities where this program is rolling out. (Did I mention that delivery is FREE?) Increased delivery traffic could result in increased congestion, particularly in dense areas, as drivers look for loading zones or possibly double park to drop off orders. (Even more reason why cities need to start digitizing those curbs.) There’s also the question of what this will do to suppliers. As Bloomberg’s Olivia Zaleski mentions, shelf space at Whole Foods could get a whole lot more expensive as suppliers compete for placement. And then there’s the competition that other grocery stores will experience–just this week, the Portland-based upscale grocery chain New Seasons announced that it will be closing a Sunnyvale, CA store it opened less than a year ago and will not be building the other California stores it had planned. They cited “growing pressure from new business models, including stores offering in-store pick-up of online orders and meal kit delivery services” as contributing to the decision. Imagine how much tougher it could get for them now that a direct competitor for their retail market can offer fast and free delivery.

Let us not overlook the equity implications of this announcement either. If you can afford an Amazon Prime account, you likely live within 10 miles of a Whole Foods, as noted above. Now you can get free delivery of fresh, organic foods. But what if you can’t afford an Amazon Prime account? E-commerce promises convenience, and perhaps no other company understands “that the most important value in American retail today is what’s is technically known as ‘consumer convenience'” than Amazon. But convenience comes with a price tag that many people cannot afford. How do we move into the future without widening the gaps between haves- and have-nots even more?

Join us for discussions about the equity implications of emerging technologies and what to do about them at the Urbanism Next Conference next month!

Seeing curbs for what they are: hot commodities

Flexible curbside uses (excerpted from NACTO’s 2017 Blueprint for Autonomous Urbanism)

If you’ve ever dropped someone off at an airport on the Wednesday before Thanksgiving, you know that finding even the tiniest amount of space at the curb to wedge your car into is near impossible. As you battle for curb space, you may not be seeing dollar signs—but cities are starting to. As Karen Hao writes in Quartz, “The humble curb is quickly becoming the city’s hottest asset.” With the rise of transportation network companies like Uber and Lyft, more and more drivers are looking for places to pull over for periods of time. Add to the mix delivery trucks also vying for that space, and you could be heading for a real congestion headache. Recognizing that this problem is only going to increase as we move towards a driverless future, some cities like Washington D.C. have taken a first step towards treating curbs like commodities—they are inventorying and digitizing them, starting with their loading zones. By digitizing that data, they can begin to measure supply and demand for curb space and charge accordingly. As the author of the Quartz article notes, DDOT started charging higher prices for the use of certain loading zones using the data it had collected.

Curb space is hot and as parking becomes, well, less hot, the loss of parking revenue is going to have an impact on municipal budgets. Charging for curb space could be the way of the future. Want to know more? Join us for the Urbanism Next Conference March 5-7 in Portland, OR and check out the session on the Future of the Curb, featuring Gillian Gillett with the City of San Francisco, and Allison Wylie of Uber. Come hear what they have to say about the city’s hottest asset!

New Report: Rethinking the Street in an Era of Driverless Cars

Communities get few moments to rethink their streets and make decisions that will serve the basic purposes of transportation, address urgent challenges like climate change, rising obesity, social isolation and conflict, and expand opportunities for general happiness throughout society.  Such a pivotal moment is upon us, as autonomous vehicles represent a potentially disruptive technology that can re-make the city for good or for ill.

Urbanism Next has released a new report delineating ways our communities can begin repurposing their most common public space – the streets – to better serve public uses.  Driverless cars may need less parking, narrower lanes, and may be able to occupy bi-directional shared lanes, all leading to a significantly reduced need for road space currently used to move and store vehicles. Where driverless cars are primarily available as fleets where users are buying rides instead of vehicles, the space savings may be more significant.

City planners, policy makers and community residents have a unique, and immediate, opportunity to rethink their streets with purposeful and creative consideration about how this critical public good may best serve the public for generations to come.  Read this Urbanism Next report to learn more.  And to see other Urbanism Next briefs, visit this page.

The Far, Way Off, Hard to Imagine Future of 2019

General Motors just announced that in the far off distance future of 2019 – next year – they are prepared to introduce commercial scale fleets of electric, autonomous vehicles to be used for ride buying, not individual car purchasing.  This may be the most major announcement of its kind to date and significantly accelerates the need for communities to figure out everything, including managing curb drop off and loading, surplus street and surface parking, the re-use opportunities of the public right of way, the impacts on land value and municipal budgets, plus issues of safety, security, etc.

Because the future seemed so, well, far into the future, most communities, from elected leaders to developers to livability advocates, don’t even know where to start in thinking about all of these things.  The GM announcement is not an announcement about just transportation, it is an announcement about everything that has to do with how and where we live, making the upcoming Urbanism Next conference much more critical for all communities, whether in attendance or not.

Town Seizes Control of Its Own Streets

One of the biggest assets any city owns is its streets.  And since no driver likes to be stuck in traffic, the predominant fix to congestion for the last 60 years has been to expand the street right of way to add more lanes.  Time and again, this new road space only leads to more car trips and the very congestion street expansion was supposed to fix.

There are a a lot of new experiments going on across the country about this problem, often by re-allocating some of this public space for other public uses like bike, pedestrian, or transit spaces, or to re-purpose parking and lanes for leisure (think parklets) or ecological function. These types of efforts recognize the trade-offs in use of the street and figure that if a community can’t solve congestion, it can at least provide more efficient transportation alternatives and better use of this public space.

But what if a community simply banned excess cars to eliminate congestion, thereby taking a more active role in the management of its street right of way? Not banned cars to create a car-free utopia, but simply banned excess cars?

This is the idea of Leonia, New Jersey, which is upset by being a vehicle shortcut preferred by navigation systems like Google Maps and Waze. The excess ‘outsiders’ are causing severe traffic issues and the approach of Leonia is to give tickets to anyone outside the community driving in certain areas at certain times.

While I have significant concerns about a city banning outsiders as disturbingly exclusionary, especially on the use of public streets for legal purposes, what is intriguing in this story is the appetite to seize greater control of the public right of way to help carry out the community’s values, which in this case is congestion-free streets.

While the approach of banning outsider’s cars from public streets seems misguided and unnecessary (just do traffic calming to reduce speeds locally and they won’t be attractive for commuters), proactively deciding how the street right of way will be accessed is a critical issue for cities beginning to think about how autonomous vehicles alter their future.

AV companies require access to the right of way to operate and right now may be a unique opportunity for many cities to decide what parts of town are accessible by what types of vehicles. AVs will require local maps that include where they can and cannot go, so while it may not be wise for a community to outlaw non-residents from its public streets, cities can restrict what types of vehicles can go where.

This is an important consideration as autonomous vehicles roll out much faster than most cities are planning for their implications on traffic, land use, or general quality of life issues.  Cities must remember that they own the transportation pipeline – their streets – that AVs will depend on and utilizing this asset to achieve community goals is something that cities can proactively control.

 

Trucking industry expected to be AV leaders

Over the last few months, we have been talking some about how the trucking industry could be impacted by AVs – see here and here.

The push for automation in the trucking industry continues to build. Trucking companies have been installing equipment to partially automate their rigs over the last few years—similar to many features added to mainstream cars/SUVs. This includes assisted braking and collision-avoidance systems. Automated lane steering is coming too. Beyond the tweaks to rigs on the road today, it is expected that over a billion dollars will be invested in the self-driving truck AV innovations this year.

The cultural resistance of gear-heads to give up their cars is not a phenomenon that is expected to pose challenges in the trucking industry. Consequently, it is likely that the big-rig operators will be in the AV game far earlier than the ‘average Joe’ on the street.

Driving with the wind in your hair will still be possible, but you might not be in control of the wheel (photo credit: JohnLund.com)

The trucking industry also doesn’t see the complete removal of drivers from the cabs of the rigs anytime soon. Unlike AV cars, long-haul trucks spend most of their lives on the vast stretches of highway that can be less complex to navigate that the chaos of city streets. A study by Roland Berger would give credence to the idea that intra-city truck driving may be harder to automate based on current cost models –but long-haul trucking is more susceptible. Some are projecting that a truck driver’s future career might be piloting trucks closer to home—driving upward to 30 different rigs in a day—guiding them from the highways to their final destinations. Many of the AV truck companies “are almost universally pitching themselves as a friendly partner [to the industry] instead of a job killer” because they are trying to “increase productivity, but also make the job more attractive.” This is going to be very important as there are shortages of drivers nationwide, and AVs may help to make the job more attractive and less stressful.

AV trucks platooning to save on fuel costs. (photo credit: ITS International)

Savings for the trucking industry will come from savings on insurance by reducing crashes, being able to keep drivers driving long and keep them more rested, and by platooning to save on fuel costs. Many of these things are already happening, but as the technologies advance, the savings are expected to grow exponentially. AV trucks are on the road around the country, but their impact is still not quite realized.

 

 

 

 

 

 

 

 

Autonomous Transit is almost here!

While autonomous personal vehicles seem to be in the news nearly every day in one form or another, less has been publicized about the rise of autonomous transit. One new experiment,  Autonomous Rail Transit (ART), will be appearing in Zhuzhou, China in 2018.

ART is a mixture of train, bus, and tram. ART does not require fixed infrastructure, but does follow specially painted lines on pavement, so it’s a hybrid between fixed rail and an open ended autonomous environment that is harder to control but easier to adapt. Having the ability to follow a track of painted lines opens the options to allow ART on any paved street relatively quickly and predictably and no new infrastructure would be necessary. It can be quickly materialized in cities that are willing to re-draw the lines on streets; potentially providing the flexible option that cities need for public transit to compete with personal vehicles. ART is a cheap way to move a lot of people, it’s the size of a small train but costs about as much as a bus, which is why cities favoring public transit are drawn to efficient and cost-effective solutions such as ART. Routes could be easily and inexpensively redrawn to adjust to behavior, or increased ridership, or land use changes, or just to tweak the system appropriately. Public transit is critiqued as being slow to implement, slow to change, and expensive. ART, by comparison, is none of these things.

Will the future of autonomous transit be a combination of fixed lines, semi-fixed routes like ART, and fully flexible neighborhood micro-transit?

Jenna Whitney is a Master’s Candidate in Community and Regional Planning and an Urbanism Next Fellow at the University of Oregon.  She is examining how cities are planning for a multimodal future in the era of autonomous vehicles.

AV taxi service coming in 2017 (or maybe 2018, we’ll see)

While GM and Tesla may continue to feud publically about whether or not Teslas are already level 4 or 5 AVs, Waymo/Google is claiming to be MONTHS!! away from starting a taxi service in the Phoenix area. The reports indicate it “ is likely to launch first in Chandler” where Waymo has been testing their vehicles.  The choice of Chandler and Arizona as the testing ground are no accident. The wide streets, few pedestrians, and fewer regulatory hurdles have made this a prime test spot for what many expect to be the future of transportation.

While Arizona law currently relies upon a human to be able to be in charge of the vehicle, Waymo appears to be working around this requirement to have a driver by having a human ‘on call’ remotely that is able to monitor the vehicles to respond when things get “sticky.” The push right now by Google execs is to get the Waymo taxi rolling in 2017, but given how far ahead Waymo appears to be compared to their rivals, slipping the start date to early 2018 probably won’t take away the ‘first to AV’ title.

 

 

 

 

AVs and Public Transt: They may replace short-trips on buses, increase equity and access, and other issues

AVs have real potential to provide easier and more convenient transportation options for people. They have the potential to provide seniors and the disabled access to the world outside of their homes in ways that are now often too expensive to widely adopt. The cost for paratransit, provided by public transit systems, is quite expensive. The Government Accountability Office (GAO) reports that ADA compliant paratransit costs an average of $29.30 per trip in 2010, this is “an estimated three and a half times more expensive than the average cost of $8.15 to provide a fixed-route trip.” And the GAO additionally reports that the cost of paratransit increased by 10% from 2007 to 2010. Consequently, ADA paratransit has the potential to greatly benefit from AVs—which we presume will have substantially lower operating expenses. In the current model of public transit operating expenses are roughly twice that of the capital expenses. And while operating expenses are likely to drop dramatically if we no longer need drivers for paratransit, there still may be a need for assistance on-board AVs that are ADA compliant and utilized for paratransit—but this is an open question.

Some discussions we’ve had in our workshops over the last 9 months circle back to when elevators switched from being operated by a human in the elevator, to when they were automated. For about 20 years, so I’ve been told, buildings with elevators continued to staff elevators because people were not comfortable riding an elevator without an operator. Today it seems sort of creepy (most of the time) to have an elevator operator—though some places like the Space Needle in Seattle have an operator, this is less about needing someone to operate the actual elevator and more about the experience. Some of the concerns that have arisen in our discussions of AV busses generally is that the bus drivers provide more services to riders than just driving. They assist riders get to where they need to go. They provide a sense of safety to the riders that there is a public employee looking out for them. The general sense that we have gotten from most people we are talking to is that we will likely need to have employees on AV fixed route buses to act as guides, babysitters, and general monitors to provide riders with a sense of comfort on the busses. It is easy to imagine a woman or child (or anyone really) riding a bus getting scared when a creepy person approaches them—the bus driver (now) or transit employee (in the AV) can help provide a buffer between creepy folks and the rest of us.

While AVs have the potential to enhance public transit by providing more efficient fixed route and paratransit services, AVs also have the potential to decimate demand for public transit. Transit systems, bus ridership in particular, are already seeing declines in ridership because of the TNCs (Uber/Lyft)— “Compared to other public transit options, buses are used more for short trips—the kind of trips that ride-hailing companies like Uber and Lyft tend to make.” The utilization of TNCs for shorter trips need to be part of our planning for transit in the long-run with the increasing presence of AVs or we will have to subsidize all riders on public transit even more. Change is coming…change is already here.

 

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.

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.

 

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.

 

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:

 

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.

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)

 

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?

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.”

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.

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.

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.

 

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.

 

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