There is tremendous excitement – some would say hype – around driverless cars. Just this month, GM and Lyft announced plans to test a fleet of driverless electric taxis within a year, and Fiat Chrysler and Google announced plans to develop 100 self-driving minivans.
At the World Economic Forum, we have been deeply engaged with automotive, logistics, technology and insurance industry executives on this issue for nearly three years. US Secretary of Transportation Anthony Foxx recently chaired one of our high-level meetings on urban transportation that included an array of city mayors.
I have been impressed with how city leaders around the world have embraced bold ideas around autonomous vehicles and new shared mobility models. Some particularly innovative city leaders are considering how to enable a massive transformation to a new mobility system, where fleets of autonomous cars and minibuses transport passengers on demand – sometimes alone and sometimes sharing the vehicle with friends or strangers.
Why are city mayors so enthusiastic about driverless cars and ready to completely rethink their transportation systems?
I would submit five reasons – none of which are directly related to transportation.
1. Cities with driverless cars will attract talent and prosper
The movement of people and goods is the lifeblood of cities, and cities with clogged streets are like people with clogged arteries. This is not just about the economic cost associated with the wasted time of congestion – though numerous studies have shown just how significant this cost is and just how quickly it is increasing in cities around the world.
The more insidious cost of congestion is the impact that it has on labour markets. When cities are congested, the pool of labour talent available for a job in a given location is decreased, which saps economic competitiveness. As mobility throughput increases, the radius of prospective employees for any given job increases.
Klaus Schwab, the Forum’s founder and executive chairman, has said that talentism is the new capitalism. Talent, skills and capabilities – not capital – is now the critical factor of production. Those cities that attract and retain the talent for the jobs of tomorrow will be winners in the global economy. And in order to attract talent, cities need to be mobile and liveable.
2. Driverless cars can decrease the gap between the haves and have-nots
The city mayors who participated in our meetings relentlessly emphasized the importance of equity and inclusiveness. How do we deliver mobility not just for the wealthy and privileged, but also for the disadvantaged and lower-income neighbourhoods? How do we provide affordable mobility options that enable the single mother to take a job in the city centre when she lives in the outskirts?
The last thing mayors want in their cities is a mobility divide – a split between those who can afford mobility and those who can’t. The vicious circle of economic entrapment that results from such a divide is just as harmful as from an education divide. Recent studies from Harvard and New York University have found that transportation can be the single largest factor in escaping poverty.
Transportation accounts for roughly 17% of after-tax income for the average US household – more than any other category except housing. This burden is even higher for lower-income households. If new mobility systems based on autonomous vehicles can offer an affordable and better (faster and more comfortable) transportation option, then that single mother can take the job.
3. Driverless electric cars could make housing more affordable
One of the most fascinating questions around autonomous vehicles is how they will impact urban sprawl. There are two opposing schools of thought. Some argue that driverless cars will enable a new middle class to live even further from the city while maintaining fast access to the city due to the better throughput that results from autonomous vehicles. Others argue that highly-mobile autonomous zones will emerge around dense urban cities, further increasing the desire to live in the centre of the action, and therefore concentrating urban populations.
Mayor Ed Lee of San Francisco sees a third advantage in terms of land use and housing coming from driverless cars: they will free up the land currently occupied by gasoline stations, as it is widely expected most driverless cars will be electric. That in turn would allow cities to reuse these spaces for affordable housing. “Right now, I can’t buy the land occupied by gasoline stations because of the high value the owner derives from its current use. When gas stations become redundant, that space could open up and be used for affordable housing,” he told us in an interview.
4. There will be more space for bikes and parks with driverless cars
I mentioned the linkage between liveability and the ease of attracting talent. A liveable city is safe and secure, delivers city services, includes ample green space, attractive architecture, and is highly walkable and mobile.
We see opportunities for driverless and shared vehicles to unlock huge amounts of value. Consider the case of on-street parking. Shared autonomous vehicles could allow large amounts of on-street parking to be repurposed for green space, for bicycle lanes, or anything other than parking.
Imagine the value of all the on-street parking in somewhere like London. If even a small share of that can be repurposed, it presents huge opportunities to create value in the cities.
5. Driverless cars will improve public health
Approximately 1.25 million people are killed on the world’s roads each year and many millions more are injured. Many cities are taking aggressive steps to reduce vehicle-related fatalities on their streets. New York’s Vision Zero program is a good example: New York City no longer regards traffic crashes as “accidents” but rather as preventable incidents that can and must be systematically addressed. If driverless cars become widespread, far fewer people will be killed and injured on our roads.
There is also the broader linkage between health and mobility. Let’s be frank, sitting in a car – just like sitting at a desk – is generally not the healthiest activity. If that on-street parking is repurposed for safe bicycle lanes (where there is a clear boundary between the pavement for cars and the pavement for bicycles), then far more people would be encouraged to cycle, which in turn would improve public health.
Making the vision a reality
Until recently, many people had reservations about the concept of driverless cars. Could they be trusted? Were they safe? Was it even realistic given the current design of most cities? While these questions are still important, we're now starting to focus on the benefits as much as the challenges. Forum research found that 58% of people said they were either likely or very likely to take a ride in a self-driving car.
I believe we will see at least one city make significant progress towards implementing a fleet of shared autonomous vehicles that meets most of its mobility demands. I don’t know if that city will be Chengdu in China, Gothenburg in Sweden or Austin in the US, but I believe it will happen within the next 10 years. Watch this space.
The World Economic Forum has announced a call for applications from world cities interested in developing a smart transportation plan that integrates the cities’ existing systems with autonomous technologies and new business models. The selected city will work with our advisory panel of industry experts to implement the plan and help make the vision for a new mobility system a reality.