Auto-Auto Deadline Looms

It is well-known that while electricity led to big gains in factory productivity, few gains were realized until factories were reorganized to take full advantage of the new possibilities which electric motors allowed. Similarly, computers didn’t create big productivity gains in offices until work flow and tasks were reorganized to take full advantage.

Auto autos, i.e., self-driving cars, seem similar: while there could be modest immediate gains from reducing accident rates and lost productive time commuting, the biggest gains should come from reorganizing our cities to match them. Self-driving cars could drive fast close together to increase road throughput, and be shared to eliminate the need for parking. This should allow for larger higher-density cities. For example, four times bigger cities could plausibly be twenty-five percent more productive.

But to achieve most of these gain, we must make new buildings with matching heights and locations. And this requires that self-driving cars make their appearance before we stop making so many new buildings. Let me explain.

Since buildings tend to last for many decades, one of the main reasons that cities have been adding many new buildings is that they have had more people who need buildings in which to live and work. But world population growth is slowing down, and may peak around 2055. It should peak earlier in rich nations, and later in poor nations.

Cities with stable or declining population build a lot fewer buildings; it would take them a lot longer to change city organization to take advantage of self-driving cars. So the main hope for rapidly achieving big gains would be in rapidly growing cities. What we need is for self-driving cars to become available and cheap enough in cities that are still growing fast enough, and which have legal and political support for driving such cars fast close together, so they can achieve high throughput. That is, people need to be sufficiently rewarded for using cars in ways that allow more road throughput. And then economic activity needs to move from old cities to the new more efficient cities.

This actually seems like a pretty challenging goal. China and India are making lots of buildings today, but those buildings are not well-matched to self-driving cars. Self-driving cars aren’t about to explode there, and by the time they are cheap the building boom may be over. Google announced its self-driving car program almost four years ago, and that hasn’t exactly sparked a tidal wave of change. Furthermore, even if self-driving cars arrive soon enough, city-region politics may well not be up to the task of coordinating to encourage such cars to drive fast close together. And national borders, regulation, etc. may not let larger economies be flexible enough to move much activity to the new cities who manage to support auto autos well.

Alas, overall it is hard to be very optimistic here. I have hopes, but only weak hopes.

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  • tgb

    Many rapidly-expanding cities are in developing nations. There the local government may have less regulation that in more developed nations which could help them adapt to auto-autos faster.

  • James D Miller

    I’m very optimistic about the prospects of self-driving cars over the next 15 years in part because of the huge benefits they will bring to senior citizens who can’t drive, the parents of kids between 11-15, and restaurants that earn lots of profit from selling drinks . I suspect the political influence of these three groups will be enough to cause U.S. politicians to push for self-driving cars.

  • davesmith001

    You are too pessimistic. We don’t live on Coruscant. There are gains to be made elsewhere, although many of them might not show up in GDP. I’d love to be able to read or play with my kids while we drive to Grandma’s.

    • IMASBA

      Judging by recent history it’s more likely you’ll spend your time in a self-driving car answering work-related e-mails and phone calls if you don’t want to get fired.

      It will be a long time before any such advancements will go towards leisure time instead of increased productivity.

      • Dave Lindbergh

        Either way (play with kids or email), it’s a win. Be happy.

        But I think Robin may be underestimating the scope for modest retrofitting of existing infrastructure to exploit auto-autos. Plenty of pre-electricity buildings were strung with wire, and I don’t imagine it will be difficult to find productive use for former parking lots.

        And, if Robin is right, that’s pretty optimistic for Africa’s cities, which have hardly even begun modern development.

        (That’s assuming Africa will _ever_ get it’s act together – there are some good signs lately, and don’t forget that Asia looked like a basket case for a long time too…)

        Starting late always lets you skip the intermediate technologies; a small recompense perhaps, but not nothing.

      • I agree you can convert parking lots to other uses. But it is much harder to make taller buildings where there are shorter buildings.

      • Hook

        I was wondering about the potential North Korea might have if reconstruction ever begins there.

      • IMASBA

        Probably huge potential under South Korean guidance, though the initial costs would be enormous (South Korea has hundreds of billions of headroom though because of their current low debt/GDP ratio).

      • Joe Teicher

        Why are you commenting on OB? Get back to work!

  • sflicht

    There are some benefits of auto-autos which accrue at more accessible margins. For example, traffic won’t get better until a critical mass of cars are AI-driven. But, much sooner, traffic will become more pleasant for those who own self-driving cars. (a) They can work or relax during the commute, and (b) they no longer need to worry about parking since the car can return to the suburbs during the work-day. I can imagine this leading to less crowding on commuter rail and other public transport options.

    But the sign of the consequent effect on urbanization is ambiguous. On one hand, reduced transport costs should improve the productivity of businesses in, and thus the wealth of, urban centers, driving population growth. On the other hand, more pleasant commutes will promote growth in suburbs.

    But one way or the other, the average person will be living in a more densely populated place, and even those in suburbs will be incentivized to acquire auto-autos. So on balance I would expect a sort of positive feedback loop that encourages increased self-driving car adoption, regardless of whether or not the politics of development in urban centers themselves is amenable to higher density.

    In fact, given political considerations, it seems likely that suburbs will drive the AI-ification of cars. The regulatory and risk obstacles of highly-capital-intensive investment in tall buildings in urban centers are hard to overcome. Modestly denser housing in suburbs is easier to achieve, especially since a prominent political obstacle to this is NIMBYs objecting to increased traffic and the need for more parking, both of which are alleviated by self-driving cars.

    Finally, once auto-autos are an established technology, it’s easier for urban centers to overcome the obstacles to dramatically increased density. Once that happens the desired extreme productivity increases might be realized.

    Reflecting on the above, I think there’s substantial reason to be more optimistic than Robin is. It seems to me that plausibly the wealth boost from super-dense cities could occur well after our populations peak.

  • steamboatlion

    The infrastructure is a suck cost. The question is how long before it is liquidated.

    The owners of private infrastructure, like parking will suffer first. Think about how much long stay near the airport parking will be needed when you can send your car home while on your business trip. Those guys will go out of business.

    Governments can force citizens to keep paying for infrastructure that fewer and fewer of them are using until a political tipping point is reached and the infrastructure is abandoned like in Detriot.

    And as other commenters have said, there are enough constituencies with a vested interest in self-driving cars to keep this moving forward.

  • Steven Grimm

    Regarding China in particular, one thing that might make you a bit more optimistic is that they’re not shy about tearing down perfectly usable buildings and replacing them. I witnessed that personally on a number of occasions in my time there. In addition, a lot of development is driven by top-down urban planning. If a regional government gets the notion of building out an urban area optimized for self-driving cars, they’ll be able to put incentives in place to make it pretty attractive to do. (The government’s power is by no means absolute there, but it has vastly more influence than do governments in the west.)

    • IMASBA

      The will to tear down perfectly good buildings has a lot to do with a real estate bubble and the power of the central government is slowly increasing as the country keeps opening up to the free market and elections for local government are instated. Of course automatic cars may be commonplace in as little as 20 years and by then China may still be sufficiently authoritarian to force large scale infrastructure adaptations that are not immediately profitable to any one investor.

  • terry_freeman

    Today’s auto autos are not even remotely capable of driving fast and close together, especially in changing and uncharted territory. Google’s cars drive only on 1200 miles of roads which have been meticulously mapped in advance.

    • sflicht

      But does anyone think it would be particularly difficult for them to meticulously map essentially all the roads in the U.S. in a year or two, if they chose to put their minds to it?

  • jhertzli

    If denser cities with less parking are the way to go, it might make sense to invest in real-estate in pre-automobile cities.

    • Curt Adams

      My money would be on malls and other areas with huge parking lots in the more successful suburbs. People already want to be there, and the redevelopment costs are far, far lower than in the old traditional neighborhoods. Pre-auto areas often have the density to support walking neighborhoods but they were designed for a very different technology and community than we have today.

  • Joe Teicher

    The idea that a major improvement in transportation would lead to us all having to cram into a smaller area for the sake of “productivity” is both counter-intuitive and unpleasant. The introduction of non-auto autos seems to have led to a decrease in density. Metro areas are bigger but urban cores haven’t grown as much. Newer cities are more spread out than older cities. Why would auto autos have the opposite effect?

    • My tastes run for greater agglomeration. But I too don’t see the reasoning that more efficient automobile transportation makes for greater population densities. I would think the way to get greater density is efficient public transportation in the urban center. (Think New York versus L.A.)

      [Maybe I’m a Luddite, but why do we need self-driving cars? If you want to be driven, take the subway. Self-driving cars running bumper to bumper will force driven cars off the roads, and taking a real drive is fun.]

      • Curt Adams

        The subway doesn’t go to your door. In many cases, it doesn’t even go to your state. Auto autos will go to everybody’s door.

        The reasons for higher density are very simple. Developers want to make money, and they get paid basically by the square footage of the buildings they put up. Payment for parking space is trivial. Now go to any suburban commercial or industrial area and look at the lots. The overwhelming majority is parking spaces and driveways. If you no longer need much parking, the developer can build twice the building on the same lot – and they will, because they’ll get twice as much money.

        Longer term, there’s a potential for a big shift in city orientations. There are low-density car-oriented areas and high-density pedestrian-oriented areas. There are economic forces which encourage denser areas over time, but it’s hard to shift because there’s a range of densities that are too dense for cars but not dense enough for pedestrians. Once neighborhoods hit this range, they tend to stop getting denser and so never transition to pedestrian. With auto autos, car-oriented areas will be able to “densify” up to the point where people are willing to just walk instead and so you’ll start seeing the transition.

        I do think the issue of stabilizing population is less of an issue that Robin thinks because a lot of recent construction is relatively low-quality and not designed to last, and the pre-auto construction is now getting really old. So there will be a lot of replacement of buildings and opportunities to build for a more compact community even without population growth.

        Also, since denser neighborhoods are more productive and valuable, there will be a race because property owners in areas becoming denser will benefit at the expense of those in areas that don’t. Huge sections of perfectly viable cities in the Rust Belt become partially abandoned in the late 20th century, even as construction continued in their suburbs. We’ll now see a similar phenomenon, but sort of in reverse, where remoter suburban areas get partially abandoned as people concentrate in livelier suburbs where their friends hang out and their jobs are.

      • The reason Robin gave for why less parking space would be required is people would share rides, and I don’t see why they would do so that much more than with driven vehicles.

        But it now occurs to me what might have been obvious to Robin: the self-driving cars can park themselves somewhere in the periphery. (One hopes gasoline will be cheap.)

      • Gunnar

        I aggree that think self driving cars won’t get people to share rides but rather to share cars. It will be like a giant Taxi service. When you don´t have to pay Taxi drivers the ride should be a lot cheaper. That combined with better efficiency will make using these services cheaper that owning a car. Most people use their cars maybe 1-5% of the time, while a service with thousands of cars in constant circulation should be able to have a much higher efficiency. Instead of the car standing all day in a parking lot it could be driving other people. You just order a car with an app and it drops you off without parking. Then you get a new car for the ride home. The result: No need for as many parking spaces.

      • Gunnar

        Sorry about the spelling :/

      • Well, wouldn’t there be a long wait during rush hour?

        I find waiting for a taxi one of the more unpleasant ways to travel.

        [When I lived in New York, I felt in transportation heaven. But while cars were generally unnecessary and I rarely drove mine, many still insist on driving their own car.]

        Perhaps a reason the infrastructural investments needed for auto-driving cars won’t be forthcoming is that they would be so speculative, so dependent on assumptions about public tastes.

  • Hanson: “four times bigger cities could plausibly be twenty-five percent more productive”

    Researchers observe that efficiency for cities seems to increase more than proportionately to size, say 2.2 times the output when the city doubles in size. That is close to the plausible 25% greater than proportional output for a city 4 times as large. This seems to recommend collecting people together into larger cities to gain that efficiency.

    I want to put a fly in that ointment. This could be another case of the Planner’s Fallacy (my term). Planners obeserve a relationship which has evolved naturally and think that they can change one side of the relationship to affect the other side. That confidence is not at all valid because they have no idea about cause and effect and unaccounted third factors.

    Something has caused the bigger cities to grow bigger. Maybe there are natural efficiencies for each of them which has caused its growth. Maybe they grow until that natural advantage is REDUCED by the additional population to the point where they still have an advantage, but not as great a one. I don’t know and I don’t think that the planners know.

    Detroit has lost about half its population in 60 years. Whatever advantage it once had seems to have disappeared.

    The current planning craze to collect everyone into megacities for a utopian future is completely unjustified. People consume both GDP and unpriced goods (like nice views and ample parking). It is a big mistake to promote plans merely because of dreams of greater GDP, and an even worse mistake to not know what causes what.

    • Doug

      It’s not completely unjustified. Large cities offer a much higher degree of labor market flexibility. People are much more likely to stay in their jobs or accept a sub-optimal one if it means not having to move. Especially if they have a family.

  • JW Ogden

    One thing that may help is that in the USA the biggest cities are gaining population at the expense of the other cities.

    • Ted Craig

      They’re not actually doing this, unless you’re talking about the biggest cities in other countries.

  • Ted Craig

    “Self-driving cars could drive fast close together to increase road throughput” This is usually a formula for less density, not more. Post-war metropolitan areas are more spread out than older cities for a reason – more efficient road structures.

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  • ZacharyBartsch

    You are right that the greatest efficiency gains could be reaped by those cities which are best able to accommodate auto-autos. Or maybe people will move toward [smaller] metropolitan areas which are already incidentally well-suited for such cars.

    Saying that cities would be more efficient neglects the coordinative and capital costs of adjustment. Maybe instead, changing smaller cities and seeing migration is the most efficient outcome. (Some large and rigid cities would become like Detroit. Dynamic ones would be revived after property values have fallen such that adjustment is cheaper.)