Government regulatory agencies are generally slow and cautious, so much so that when the California Public Utilities Commission eventually voted to allow driverless robo-taxis to operate in San Francisco 24/7, a ruling the commission made in August, the topic had already exhausted its 15 minutes of fame.
Google’s unit Waymo and the GM outfit Cruise are operating the robo-taxis, also called autonomous vehicles, in the hilly seaside city, and have started in other urban areas, such as Miami and Phoenix.
While the California Public Utilities Commission ruling may read like yesterday’s news for the cities and transport industry, the regulatory thumbs up is profound and unfolding in real time. Automated delivery systems for people and other cargo are rapidly evolving from testing grounds to implementation.
Tech-industry hype might be warranted in the case of autonomous vehicles, a practical technology that appears likely to overhaul urban transportation systems and commutes not only across the nation but worldwide.
Perhaps with a dose of hyperbole, ARK Investment Management, the tech-centric investment shop run by the nearly iconic CEO Catherine Wood, has stated that “autonomous vehicles could be one of the most productive innovations of all time,” and that global gross domestic product (GDP) could be 20 percent higher than otherwise by 2030.
Robo-taxis alone will easily dwarf steam engines and the entire information technology industry in boosting productivity and GDP, asserts ARK Invest, in a July report. The firm might be optimistic, but there is no gainsaying that a major cost of urban living is in transportation, particularly when congestion enters the picture. No city-dweller needs to be reminded of the sight of commuters, mail delivery trucks, busses and taxis negotiating tangled streets, or 18-wheelers groaning into the edges of town.
Anyone in rush hour traffic has seen all of the above camping on freeways, consuming working hours and wages without producing much. Yet, within decades or less, most taxis, shuttles and urban deliveries, as well as inter-urban transit, could well be robot-assisted, or so say industry observers.
THE MATH ADDS UP
Initially, robo-taxis, a still-developing technology now entangled in government regulations, will have an uphill battle in winning market share and luring metropolitans from their cars. But as early as 2030, the cost of hailing a robo-taxi daily will be nearly equal to owning a car and driving oneself around, and even less if the customer accepts a fellow passenger pickup, or “shuttle” arrangements, McKinsey & Co., the management consulting firm, recently reported.
If enough residents of a city sign up for autonomous vehicle ride-sharing services, and are willing to, say, walk a few blocks to a pick-up spot, the prospects for successful and low-cost commuter robo-shuttles becomes much brighter. That is to say, increasingly efficient routes can be designed to accommodate morning and evening commutes. With greater efficiency will come declining costs.
Meanwhile, in the next decade old-fashioned taxis and “personal ride-hailing services” (read Uber and Lyft) will cost as much as six times per mile to operate as autonomous vehicles, estimated McKinsey in its recent report The road to affordable autonomous mobility.
For traditional taxis, and even modern-day ride-hailing services, the outlook is cloudy.
Business and accounting services giant KMPG more or less echoed McKinsey’s view in its recent report Future of public transport, in which it said, “mobility-
as-a-service and autonomous vehicles have the potential to be cost competitive with public transport services and more convenient in servicing the last mile of customer journeys.”
It should be noted that public transit, when available, is and will remain the least expensive transit alternative, at least for the passenger (many transit systems are subsidized by taxpayers), especially if no cost or value is placed on passenger time expended in transit, or on personal safety.
The low costs of public transit and the declining cost of autonomous vehicles automatically raises the question: Can the two transportation modes be coordinated to synergistic effect?
CONGESTION
Robo-taxis may also play a role in de-congesting city roadways, especially if woven into existing urban transportation systems.
First, if urban denizens come to accept the robo-shuttle or autonomous vehicle ride-sharing arrangements, there will be fewer cars on the road during rush hour. Secondly, if the robo-taxis are hooked to a central city control system, they can be guided at regulated speeds and routes to help avoid traffic jams, resulting in as much as a 42 percent reduction in congestion, according to UC Berkeley’s Institute of Transportation Studies.
Another decongestion option is the use of city regulations or financial incentives, such as low-cost fares, for riders taking robo-taxis to and from mass-transit hubs. Obviously, the more daily commuters funneled into the trunk lines, the less busy will be city streets.
But this coordination of autonomous vehicles and transit systems will place unprecedented demands on city governance, reported KMPG.
CAN CITY GOVERNMENT MAKE IT WORK?
Urban transit agencies and city governments will have to learn to work with the private sector, rather than regulate transit-related enterprises, suggest experts.
“Agencies will likely become the commissioner of markets rather than the deliverer of services. Future transport algorithms will likely nudge customers through the network, balancing individual preferences with network and social requirements,” advised KMPG.
In practical terms, budget-strapped city leaders in the next decade will likely not choose to operate their own robo-fleets, and thus will have to accommodate fleet-operator needs when fashioning urban transit policies. Rather than regulate to preserve existing franchises, or too-zealously serve certain voter groups, city leaders should “facilitate greater market entry for new and emerging modes,” KMPG reported.
Of course, making considered statements from a perch in academia or a business consultancy is one matter, but it remains to be seen if city and transit leaders can actually embrace and help flourish new city transportation arrangements.
AN END TO MASS TRANSIT
There may also arise tensions between robo-taxis, especially low-cost and privately operated robo-shuttles, and public mass transit systems, that will likely have to be resolved by city governance.
Labor expenses eat up an average of 62 percent of mass transit budgets, according to a recent estimate of the American Public Transportation Association. The prospect of private, driverless shuttles offering better urban transit services at reasonable rates is not one to be dismissed lightly.
Mass transit in the United States has struggled in the post-war era (indeed, peak mass transit ridership in the U.S. happened in 1926) and was knee-capped by the COVID-19 pandemic. About 5 percent of daily commuters nationwide use mass transit.
A recent peak for mass transit ridership was set in the first quarter of 2014, at 2.73 billion rides nationwide. Even before the pandemic, ridership totals were eroding. In the first quarter of 2023, in the post-
pandemic era, there were 1.66 billion mass-transit riders nationwide. Mass transit has yet to leave the pandemic era.
If EV robo-shuttles are improved to the point where trip costs are on par with mass transit, certainly when convenience and other factors are taken into account, a challenge for mass transit operators will be convincing office holders and taxpayers to maintain the subsidies that allow operation.
It should be noted that many U.S. cities, especially in the Midwest, South and West, in general developed in a more automobile-
centric format than older northeastern cities (especially New York City), or urban areas in Europe and China.
Older, denser cites that evolved synergistically with mass transit will likely look to robo-shuttles to supplement urban transit system, rather than replace such systems.
ELECTRIC FLYING TAXIS
Shades of Buck Rogers, or perhaps Blade Runner may arise as several manufacturers insist they will be able to offer electric flying taxi service to urban commuters, and eventually for charges in the range of $5 a mile.
That price tag might sound steep for the daily straphanger, but not so much if city streets are jammed, meaning a couple of hours to a destination by ground, a situation common enough in Atlanta, Mumbai, Los Angeles and Bangkok.
Germany-based Volocopter is leading the field for now, with a battery-powered multi-rotor flying machine that looks like an oversized drone, just large enough for a couple passengers and pilot. The flying taxis could even be autonomous, perhaps more easily than ground-based vehicles, claim its manufacturers.
Morgan Stanley analysts have posited that the urban electric vertical takeoff and landing (EVTOL) market could be valued at more than $1 trillion by 2040.
Remarkably, more than 400 contenders have developed EVTOL designs, and an outfit dubbed Joby, a Silicon Valley startup, has already raised $2 billion from investors, reads a review from the Vertical Flight Society. The EV-copters are also quiet, another advantage in urban settings.
As with autonomous vehicles, the early entrants into the EVTOL field will be pricey, but if popular, economies of scale could come into play.
A flying taxi flight to JFK Airport from Manhattan, if three passengers are on board, could drop to $70 per customer, posited ARK Invest. That happens to be the same price taxis charge, although for a single rider.
Flying taxis may not ever become mass transit vehicles, but sky travelers could still help reduce urban congestion on the margins.
THE IMPACT ON URBAN PROPERTY VALUES
Imagine the future of cities populated by thousands and then tens-of-thousands or even millions of robo-taxis and vans. And some number of electric flying taxis.
One upshot of robotized urban automobiles and delivery van fleets will be the need for ample parking, but only if endowed with power stations and maintenance facilities. The good news is that most U.S. cities have ample, even mind boggling, amounts of parking spaces available. By some estimates, there are 2 billion parking spaces in America, roughly 10 parking spaces per car. Indeed, Jackson, Wyo., was found to have 27 parking spaces for every car in a recent study by the Mortgage Bankers Association’s Institute for Housing America. Other cities were not far behind.
In a typical city, such as Dallas, about one-quarter of land is covered with parking spaces or garages, while 14 percent of gigantic Los Angeles County — a jurisdiction with large swatches of parkland, riverbeds and single-family housing — is dedicated to parking spaces or garages.
Thus, in terms of buildout, the good news is parking facilities are already in place in nearly all U.S. urban areas. Indeed, well beyond what’s needed to handle fleets of robo-taxis turning in for the night to be charged-up or undergo maintenance and cleaning.
It is not too fanciful to ponder America’s shopping malls, now often in the doldrums, but usually situated near major populations, becoming future robo-taxi garages or parking areas. Many major office buildings and districts across the nation have underground parking, also suitable for robo-taxi servicing.
Of course, robo-taxi garages will require extensive improvements in terms of power outlets and facilities for in-house maintenance and repair. But there are already many companies plying parking garages with upgrades for EV-charging stations, including New York City-based Gravity, the company that installed a 24 bay fast-charging EV hub in Manhattan last year.
The benefits of serving robo-taxis and vans for landlord garage owners are obvious, from renting stalls to EV chargers to leasing space to food-and-drink kiosks for repair and maintenance workers.
As for flying taxis, the future and urban property values are hard to even estimate. It may be that city mid-rise buildings with flat roofs will be able to monetize the asset in the years ahead.
IN THE FINAL ANALYSIS
The prospect of fleets of affordable EV robo-shuttles is appealing, especially to urban denizens desiring clean city air and freedom from onerous car payments, insurance, parking fees and repair bills.
There is little doubt that remaining qualms about autonomous vehicle safety are rapidly ebbing, and that the costs of EV robo-transport will decline into the 2030s, just as the costs for all new technologies tend to decline upon commercialization, from solar panels to batteries to smartphones.
The hurdle for enlarged fleets of urban robo-taxis may not be costs or safety, but government.
In the older northeast, expansive robo-fleets might be organized to cooperate with large mass transit systems, as feeder systems to trains and busses. In the more automobile-centric rest of the nation, there is the possibility of business and political battles between robo-fleets and mass transit, with legacy systems coming under stress due to large labor and operating costs.
In the end, the consumer and quality of urban life are the likely winners. With robo-taxis and shuttles, cities will likely become less polluted, quieter, easier to live in.
For urban denizens, daily commutes could become times of relative leisure or even productive work, while the robo-driver negotiates city highways and byways.
Benjamin Cole (7continents7@gmail.com) is a freelance writer based in Thailand.