Original post date: October 10, 2014
Article by: Ben Douglas

Uber CEO Travis Kalanick recently released his vision for the future, touting “a million fewer cars on the road,” along with reduced congestion, emissions, and DUIs. If this vision is realized, in combination with an aging driving demographic and the rise of driverless cars, it would transform urban planning, transportation, and America’s automobile industry.

Urban development is currently constrained by available parking and street congestion. As much as half of the modern American city’s land area is dedicated to the automobile and related infrastructure. Municipal codes require  specific levels of parking space for all  new development. This creates an asymmetry that exacerbates congestion by reducing the land available for streets and driving. Widespread adoption of UberPool, UberX, and other ridesharing services may reduce the need for parking spaces and personal automobiles, thus mitigating this asymmetry and the associated congestion.

This technology may prove harmful to the auto industry, particularly if governments (federal, state, and local) get on board. Precedent indicates this is unlikely, however. Minimum parking requirements inadvertently subsidize private car ownership. The 2009 “cash for clunkers” scheme had a similar effect. Most importantly, the Treasury’s $80 billion bailout of the industry strongly indicates the US government’s unwillingness to tolerate threats to it.

Driverless cars will further decrease the need for the private vehicle commute as the technology becomes safer and more affordable. As of April, Google’s driverless cars had passed 700,000 accident-free miles. To this day, they have had no at-fault accidents. Uber has already committed to purchase 2,500 of the vehicles from Google and Kalanick indicated he considers them the way of the future: “When there’s no other dude in the car, the cost of taking an Uber anywhere becomes cheaper than owning a vehicle. So the magic there is, you basically bring the cost below the cost of ownership for everybody, and then car ownership goes away.”

According to the Eno Center for Transportation, driverless cars “may be available on the mass market by 2022 or 2025.” Nissan and Volvo are already trying to make the technology commercially viable. If successful, driverless cars will transform the future far beyond urban planning and the auto industry. New highway safety and liability laws must be made and decades of road-safety legislation must be overturned to make way for this new innovation.

While the technology is currently too expensive for most consumers, swift improvements and cost reductions are likely. The automobile itself was initially a plaything of the uber-rich until Henry Ford’s assembly line brought it to the masses. The first hard drive held only 5 MB of data, cost $50,000, and was the size of two refrigerators.

It is also important to remember there are significant costs to human driving, lest we commit the nirvana fallacy. An estimated 90% of accidents are due to human error and cost $450 billion annually. In order to be economically viable, driverless cars need not be perfect and cost-free, only safer and less expensive than human-operated vehicles.

The private sector may be picking up the slack in creating a viable, efficient, economically-friendly alternative to the personal automobile commute where public transit has failed. If this proves to be the case, companies like Uber and Google will fundamentally change city life as we know it.

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