The Driverless Disruption

There are lots of articles out there about self-driving cars and their possible effects on cities and suburbia and everywhere else. The truth will fall somewhere between nirvana (no need for parking! narrower lanes!) and devastation (5 million jobs lost! sprawl encouraged!).

This article by Joe Cortright for Strong Towns is the only one I remember reading that tries to address the costs to individuals, and the effect that cost will have on behavior and use. I've been wondering especially how fleets of driverless cars will be deployed to meet rush-hour demand, and Cortright thinks that surge pricing will manage it — and will change users' commuting behavior accordingly.

No one knows what the cost per mile will be for a hired driverless car, though it's likely to be lower than one driven by a person. The average cost per mile for the use of your own car these days, according to the IRS, is 54 cents per mile. However, as Cortright says,

Because the marginal cost of a trip is often perceived to be just the cost of fuel (perhaps 15 - 20 cents per mile), households use cars for trips that could easily be taken by other modes. That calculus changes if each trip has a separate additional cost – and consumers are likely to alter their behavior accordingly. Per mile pricing will make travelers more aware – and likely more sensitive to – the tradeoffs of different modes and locations. The evidence from evaluations of car-sharing programs, like Zip-car, show that per mile pricing tends to lead many households to reduce the number of cars they own – or give up car ownership altogether.

That point about the marginal cost of a trip is so true. Once you own a car, you feel as though you might as well use it, except for the cost of gas and parking, which is why people complain so much about gas prices and having to plug parking meters, but much less frequently moan about insurance rates and car prices. Those costs are fixed once you commit, and you're not reminded about them every time you use your car.

Cortright also has thoughts on the effect of driverless cars on mass transit usage, especially buses, and on road-building agencies, which currently rely on gas taxes for a bit more than half of their revenue. (That new fleet of driverless cars is very likely to also be all-electric.)

Disruption, disruption, disruption. Coming soon to a community near you.