The Auto-Auto Race

Cities are a central engine of the modern economy. Enormous gains come from folks interacting and specializing more in bigger cities. What limits these gains, and keeps us from all living in one mega-city, is transportation costs. While the cost of transporting goods and people once mattered similarly, today people transport costs dominate. And while hopes for mass-transit remain, cars clearly dominate human transport today. Thus the near-term future of cities, and of which cities dominate the world, comes down to how cities handle auto innovation. I see three main innovations to consider:

• Mass Mass Transit – If a big city could coordinate to create subways, etc. on the scale and quality of New York, it could support densities like New York. The level of investment and coordination required to pull this off, however, seems well beyond what any known city can muster.  New York only achieved it accidentally (a dotcom-like boom in private subway building).

• Congestion Pricing – Pricing road usage to discourage overuse at peak times offers real gains, by encouraging off-peak work schedules. But these gains are limited by the large coordination gains we achive by having similar work and leisure schedules. This is also up against strong public opinion that roads should be free. A few cities like Singapore, Stockholm, and London have managed limited moves in this direction. I’d guess long run efficiency gains here are somewhere near 5-20%; important, but not revolutionary.

• Automated Driving – In the last month Google told the world it has developed computer driving tech that is basically within reach of doubling (or more) the capacity of a road lane to pass cars. Pundits don’t seem to realize just how big a deal this is – it could let cities be roughly twice as big, all else equal. The main problems here are not technical but legal (& political) – first to not excessively punish tech sellers for related car accidents, and second to sufficiently reward car owners for their contribution to reducing congestion. Achieving these will require great coordination, more than for congestion pricing, but much less than for mass mass transit.

So a huge upcoming policy question is: when will what big cities manage to coordinate to change road law to achieve these huge auto-auto economic gains? Thirty years from now we may look back and lament that big city politics was so broken that no big cities could manage it. Or perhaps history will celebrate how the first big city to do it dramatically increased its importance on the world scene.

Some related quotes:

• As recently as 1950, only 30% of the world’s population was urbanized. Today, more than half live in urban centres. The developed world is now about 80% urban and this is expected to be true for the entire planet by around 2050. … Doubling the population of any city requires only about an 85% increase in infrastructure, whether that be total road surface, length of electrical cables, water pipes or number of petrol stations. This systematic 15% savings happens because, in general, creating and operating the same infrastructure at higher densities is more efficient, more economically viable, and often leads to higher-quality services and solutions that are impossible in smaller places. Interestingly, there are similar savings in carbon footprints — most large, developed cities are ‘greener’ than their national average in terms of per capita carbon emissions. … Similar economies of scale are found in organisms and communities like anthills and beehives, where the savings are closer to 20%. (more)

• [Goods] transport … is … becoming less important relative to GDP. … The full-cost of transporting goods – money costs plus time costs – is … rapidly declining over time. Transport costs … still remain expensive in one area – the movement of human beings. …18% of total expenditures for the average household is spent on … vehicular expenses. This cash cost fails to include the far more important time costs of moving people. … [In] Los Angeles … it would take a traveller about 90% longer to make a given trip during peak periods than if the person could move at freeflow speeds. … Over the past three decades, congestion and delay have been increasing in all size classes of cities. … Between 1980 and 2000, commute times rose by about 13% … Commute times are greater in larger cities. (more)

• Google … has been working … on vehicles that can drive themselves, using artificial-intelligence software that can sense anything near the car and mimic the decisions made by a human driver. … Seven test cars have driven 1,000 miles without human intervention and more than 140,000 miles with only occasional human control. … Robot drivers react faster than humans, have 360-degree perception and do not get distracted, sleepy or intoxicated, the engineers argue. They speak in terms of lives saved and injuries avoided. … The engineers say the technology could double the capacity of roads by allowing cars to drive more safely while closer together. Because the robot cars would eventually be less likely to crash, they could be built lighter, reducing fuel consumption. … Even the most optimistic predictions put the deployment of the technology more than eight years away. … Autonomous vehicles poses thorny legal issues. … Under current law, a human must be in control of a car at all times, but what does that mean if the human is not really paying attention? (more)