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.
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.
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.
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
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.
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.
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.
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.
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?
Work in data (“Storing, organizing, and analyzing that data will be a big job”);
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”);
AV mechanic (“Robocars won’t need you, but they’ll still need mechanics”)
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”)
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.
“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.”
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.
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.
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.
“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:
Develop their own safety and privacy guidelines related to AVs. Transparency will be the key to a successful innovation, the report suggests.
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.”
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.
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.”
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.”
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.”
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.”
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.)
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.
On the heels of USDOT announcing 10 pilot designees for testing AV technology, one state is getting out ahead of AVs. Legislation proposed in Massachusetts would ” allow self-driving cars on public roads, but impose a mileage-based tax on their use, allow some large municipalities to ban them, and require all such cars to be zero-emissions vehicles.” (Boston Globe, January 19, 2017) As pointed out in the article, AVs currently fall into a legal gray area in Massachusetts and many states.
APA reports that Michigan, Arizona, California, the District of Columbia, Florida, Nevada, North Dakota, Tennessee, and Utah have statutes regulating AVs. (“Michigan joins small number of states with self-driving car laws.” – APA blog)
CityLab has posted a report from this years Consumer Electronics Show and – unsurprisingly – the roll-out of AV’s seems to be focused on shared fleets and they will focus on freight and high occupancy transport. Cost seems to be the largest factor early on with AV technology being cost-prohibitive for individual ownership (although Tesla might have something to say about that). Another reason is simply the ability to monitor and modify cars and algorithms – much easier to do roll-out and testing in limited contact points via larger shared fleets.
This is not to say that shared vehicles are the only future for AV’s – but thier initiation happening as shared vehicles is promising and gives a bit of time to figure out how best to promote and cement that future over individual ownership – probably the most critical issue in avoiding a dystopian future.
While there has been a good amount of speculation about how Shared AV’s (SAV) will push or hinder sprawl, little of it is based on research. This new study (presentation linked) by Wenwen Zhang and Dr. Subhrajit Guhathakurta from Georgia Tech uses a sophisticated analysis of travel datasets from Atlanta coupled with home purchase information from Zillow to predict how fleets of SAV’s might shift where people will choose to live. While the study has some aspects to work out (value of travel time, pricing effects of new mobility on housing), the takeaway is a substantial shift in residential preference.
Author Zhang states that “The transportation system we investigated is Shared Autonomous Vehicle (SAVs) which is a ubiquitous transit system. Our results show that younger households (<40 years old) will move further away from downtown for cheaper housing units and better education resources. Meanwhile, elder households (>40 years old) will move towards the downtown area to avoid long average waiting time. However, all workers will move further away from their working places. The best interpretation of our model results would be workers will have more freedom in terms of residential location choices, i.e. they can live closer to other education facilities and infrastructures that they need to consume, rather than being constrained by the location of their offices.”
The image below – from the study – sums up how a post AV/ridesource world will have more people choosing to both live and work farther from city centers. (blue is current household distance from CBD or work, green is AV future distance from CBD or work). The charts shown are for people under 40 with kids.
It should be noted that this study focuses on SAV’s where wait times are the key factor pushing some people to live closer in and within higher densities (to avoid wait times). We might rightly assume that privately owned AVs (that eliminate wait times) could push people further out.
This should be a wake-up call to anyone worried about sprawl.
Distance of Household to CBD:
(Avg Current = 20.70 miles, Avg w/ SAV Fleets = 22.31 miles)
Distance of Household to Work:
(Avg Current = 29.48 miles, Avg w/ SAV Fleets = 36.03 miles)
While the article lays out convincing parameters for these scenarios, it doesn’t address the potential for differentiated models based on density. Cities may lean towards fleet ownership and/or shared rides, but as we move further and further out into the suburbs, fleet management will be more difficult to do efficiently and profitably. This seems like it would push towards more private ownership in these locations. If so, some of the parking related benefits of AVs – to name only one of many issues – may be uneven across urban areas.
Urbanism Next - Sustainable Cities Initiative (SCI) - University of Oregon ____ Blog Contact: Nico Larco - firstname.lastname@example.org