Cities Are About To Change Forever. Here Are 3 Key Decisions They Must Make

By Kevin McCullagh

When Model-Ts started rolling off Ford’s Highland Park production lines in 1908, there were only around 200,000 cars on the roads in the U.S. Few foresaw the spread of suburbia, out-of-town shopping, drive-through restaurants, working at the car wash, and road trips down Route 66. Nor did anyone foresee how economically significant the auto industry would become. By 1955 the nation’s top 10 biggest companies included: General Motors, U.S. Steel, Chrysler, Standard Oil Of New Jersey, Amoco, Goodyear. and Firestone. Cars helped drive huge change in the mid-20th century, including entirely unexpected knock-on effects such as the fact that the 25% of the U.S.’s agricultural land, which had been used for rearing horses, was then freed up for human food production.

[Photo: Piron Guillaume/Unsplash]

The consequences of new technologies are hard to predict. When mobile phones the size of breeze blocks became popular among the Wall Street set, they were written off as Yuppie toys. Now 7 in 10 people around the world use a phone. We now spend much more time browsing photos, ordering cabs, checking the news, and swiping right than we do talking on phones. Four of the top 10 most highly valued companies in the world are Apple, Alphabet (formerly Google), Facebook, and Amazon—all of which earn much of their income via phones in one way or another.

Yet as mobile phone sales peak and innovation in that sector slows, cars are reentering the frame as one of the next drivers of social and economic change in the coming decades. The big impacts will be felt cumulatively, in three successive waves: mobility as a service (MAAS), the rise of electric vehicles (EVs), and automation. As ever the question is less if these developments will happen, but when–and more specifically, when they will start to have widespread impact. The first Benz Patent-Motorwagen was built in 1885, but the first U.S. highway didn’t arrive until 1925 by which point 50% of American adults owned a car. By contrast it took mobile phones less than 15 years to reach the same level of adoption.

These technology and business waves will influence, but not determine, the future. The choices that society makes will. Just as the urban planner Robert Moses took the bold decision to introduce urban expressways into New York, whereas Copenhagen elected to keep its existing road grid, so too will cities have to make decisions about new issues in mobility.

[Photo: Nisian Hughes/Getty Images]

How Heavily Will Cities Regulate Private Ride-Sharing Companies?

The impact of the first wave–mobility as a service–is already being felt in urban centers around the world, epitomized by Uber’s explosive growth since 2014. Urbanites are increasingly opting to access ride-hailing services like Uber, or car sharing from the likes of DriveNow and Car2Go, and for longer trips ride-sharing or car-pooling services such as BlaBlaCar in France. Private car usage and ownership in cities is set to fall, as mobility services grow in reach and drive down prices. City authorities are also playing a part, as they introduce inducements to ditching cars.

This in turn will present the governing authorities of cities with new choices. Gradually drop-off and pick-up areas will replace parking spaces at popular destinations. Those who can afford these services gradually cease to think of cars as general purpose, and begin to select different vehicle types and services for different kinds of trips, from a shared mini-bus for the commute to a slick sedan for date night. Jobs in car dealerships will most likely fall due to the decline in private sales, while those in car maintenance, washing, and valeting will rise—as the cars on the road will be much more heavily used. This wave on its own is relatively low impact compared with what will follow, primarily because it is an incremental improvement on traditional taxi services and uses existing vehicles, smartphone platforms, and consumer behaviors. The key choice is for cities to decide to what extent they should restrict global players and spawn local competitors according to locally defined labor laws.

[Photo: Flickr user Barney Moss]

How Far Will Cities Go To Support EVs?

The next wave will be the shift to EVs. Take Tesla as an example. Tesla’s sales currently account for less than 1% of global car sales–although 29% of cars sold in Norway in 2016 were either pure EVs or plug-in hybrids. Global sales of EVs are likely to pick up as auto companies bring more affordable models to market, and–critically–cities and governments introduce more stringent emissions legislation.

As each successive wave builds on the previous one, the choices and tensions will get more substantial. With EVs, there are obstacles of course. For example network overloads occur when there is a high concentration of EVs being charged at the same time. Private owners of EVs in suburban areas often have a garage/driveway for overnight charging and in many cases at least one other vehicle. But in the inner city, charging infrastructure is wholly inadequate with few credible plans in place. Besides creating a network of charging points, the electricity grid in most cities will require major upgrades to supply the capacity required. For these reasons and more, plug-in hybrids are likely to be the preferred option for years to come.

The urban charging challenge is likely to be tackled in a variety of ways. It will require a great deal more than for existing fuel stations to turn over their forecourts to charging bays. Juicing up a battery takes a lot longer than a fuel tank, so it’s likely that charging hubs will emerge that combine bays with cafes, coworking spaces, and retail areas. Unlike ride-sharing, the swift rise of which took many by surprise, EVs’ impact will take longer as it relies on extensive innovation, particularly around battery performance. In addition, a new urban charging infrastructure needs to be built as well as a system of legislative inducements.

This will require considerable levels of investment, political will, and coordination between different players, from carmakers and charging point providers to city authorities and energy companies. And some consideration of consequences. When EVs are adopted in significant numbers, national governments will be presented with a big taxation choice. After all 4% of U.K. tax revenue comes from fuel duty. As fuel consumption falls, will the tax burden be switched to electricity or road usage or a combination of both?

[Photo: Flickr user zombieite]

How Will Cities Leverage Autonomous Vehicles To Their Advantage?

The first two waves will rock the boat of urban mobility. The third though will flip it. Much of the debate about AVs has until now focused on when the technology will be ready, how road regulations will adapt, and to what extent road accidents will be eradicated. If we raise our horizons beyond these technical questions and assume they will be resolved over the next 5 to 10 years or so, we can ask ourselves: what kind of social, urban, and economic changes do we want autonomous vehicles to drive? And what do cities need to do to make that happen?

The most disruptive change is likely to be the plummeting cost of door-to-door transportation. As most driverless cars in urban areas will be provided as a service by the likes of Uber, and without a driver to pay, price per mile is likely to drop to $0.50 from $1 to $1.50 per mile. This will challenge the viability of buses and trams on many routes, and is likely to blur the boundaries between shared and public transport. One potential model is that local transport authorities will form partnerships with ride-hailing services. In Florida, one authority is currently subsidizing Uber rides on routes it does not cover.

This plunge in cost is likely to increase the demand for mobility solutions. One recent study estimated that demand may rise by as much as 30%. There are two ways in which city authorities can respond to this. On one hand, they can embrace the potential expansion of their citizens’ mobility, and use smart routing and other means to maximize their road capacity. On the other: They can curtail car usage, through various tactics such as dynamic congestion charging. While the latter of these tactics may seem the more likely in today’s climate, this situation may change. Certainly, it will be a matter for different governments and mayoralties to deal with in their own way.

Throughout the 20th century, workers were able to live farther away from work as transportation became faster, although two hours each way tends to be the maximum most will put up with. But what if people could begin and end their working day productively on their door-to-door commute? How much faster could longer distance commutes get, if AVs can use high-speed lanes, where they platoon in close formation? How will the perceptions of sitting in traffic change, if that time can be used for business or pleasure? Would this encourage some to live even farther away from their workplaces than today?

This isn’t a fanciful idea. A recent study by Ford found that 39% of bus, train, and taxi users choose that mode because they want to multitask en route. People will find many other ways to pass the time while being robo-chauffeured, from sleeping and VR gaming, to more furtive, private pastimes–either way switchable tinted glass is likely to be popular feature.

The implications for cities is significant as well. Most driverless vehicles will be more used than typical manual cars, which typically spend 95% of their time parked up. As the need for parking space and potential bus lanes tails off, city authorities will find new public space to play with. To what extent will increasing road capacity figure in city plans? How much space will be needed for charging and valeting cars? These are just some of the questions that will need to be addressed.

Other more contentious decisions that policy makers will need to grapple with will include policy decisions relating to manually driven cars. Will they for example be banned on public roads? How will safety issues be reconciled with those of personal freedom? Northern European nations are likely to emphasize the former while Americans surely are more likely to privilege personal liberty over pure safety arguments.

Another knotty dilemma will hinge around the amount of data collected by AVs. It is estimated that the camera, radars, and other sensors of a typical car will gather 4,000 GB of data per day relating to road, traffic, and weather conditions as well as the behavior of the car’s passengers. While not all of this is likely to be uploaded, who should have access to the data when it is, and more pointedly have the right to monetize it? Should certain types of data such as road conditions be made open-source to aid safety and traffic flows? From a privacy perspective, there is also the much-flagged challenge of cyber security, high standards for which will be a prerequisite.

These are just some of the opportunities, questions, and choices that are coming into view on the road ahead. But as Carl Sagan once said: “It was easy to predict mass car ownership, but hard to predict Walmart.” Following all disruptive shifts throughout history, the knock-on effects and unintended consequences that lie over the horizon are hard to foresee. As the impacts are likely to be as major as the adoption of cars in the mid-20th century, the more we widen the discussion now, the better we’ll be able to steer toward a positive vision of our future lives and cities.

Kevin McCullagh is the founder of Plan, a product strategy consultancy in London. He also writes, speaks, and curates conferences on design, business, and society. www.plan.bz @kevinmccull

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