Autonomous vehicles impact on real estate

[karen nelson]

What will continued tech advancements in automonous vvehicles mean to development, real estate.

If automonous electric vehicles do really succeed and are super cheap to make many people give up on individually owned cars, and drastically reduce need for parking, it seems that medium dense cities like Twin Cities will gain a huge supply of new land in already developed areas and also make buildings lower cost (no underground parking etc) which could really improve housing affordability. Suburbs could densify around retail by using the parking lots for apartments, offices and attractive parks.

Maybe this whole fight about YIMBYs and NIMBYs will be outdated by tech, the new issue in 10-15 years could be real estate deflation.

I do think this article totally overlooks congestion issue with AVs in dense cities and how transit will still deliver on that

https://www.forbes.com/sites/elyrazin/2 ... 01bd2413c1

[VacantLuxuries]

Ever since reading this article, I've become even less optimistic about the future of autonomous vehicles. It seems like we're opening ourselves up to a future where speed is the distinguishing feature between levels of service. As pointed out many times before here, self driving cars take up just as much space as regular ones - so what's to stop fleet services from prioritizing the customers who pay more a month?

I've seen people argue self driving cars will be the "end" of the urban living trend since it'll be easier to live in sprawl again. If this happens, that'll be true for rich people at least.

http://www.thedrive.com/opinion/16995/h ... neutrality

[Anondson]

Commercial district street curb space will become a hugely sought after real estate in a massively AV future. Drop off zones and stores nearest them will be an interesting trend to track how they are regulated.

[mplsjaromir]

I hate to spoil it but autonomous vehicles aren’t going to work.

[amiller92]

They'll work eventually, but it's going to be farther out than most are predicting, with the end of personal vehicle ownership even farther out and the fantasy of "just send the car home/out to be shared" while you're at work isn't going to work because of the massive congestion it will cause. The foreseeable long range future is a personally owned vehicle that is parked near your destination but you don't have to actively drive it.

Mind you, you will be able to get out at the front door and send it around the block to park itself, so I guess that'll be nice.

[Anondson]

Never count the auto industry out from forcing upon cities laws that are detrimental to pedestrians and bicyclists in order to accommodate the imperfect version of what they are able to create.

[amiller92]

Yes, and it's in interesting set of incentives to think about. The "nobody will own a car, we'll all rideshare" predictions don't sound like a world that the car makers will love, as I think it implies fewer total cars. What steps will they take to avoid it? Will congestion work to their advantage and will the find ways to foster it? I'm assuming they're having interesting conversations these days.

[karen nelson]

I hate to spoil it but autonomous vehicles aren’t going to work.

There is sooo much money and focus pouring into autonomous vehicles, they will figure it out. Consider the sensors and computing power needed to make autonomous vehicles work are dropping in price by double digits each year consistently and AI is getting consistently better also. Add to it electric vehicles, ideally suited as fleet vehicles because of their low maintenance cost and low fuel costs, including their batteries, keep getting cheaper with better range each year.

This will happen, just a question of when and how widespread.

Even if autonomous vehicles need help and aren't Level 5 - think what a fairly dumb but cheap per mile system of small electric shuttles running frequently on a bunch fixed routes could accomplish.

They will figure this out, the global race is on, and everything going into these cars gets cheaper and better every year.

[karen nelson]

My biggest concern is autonomous ride hail systems may monopolize a city like, say Comcast does for ISPs.

Second biggest concern is congestion. There may be less total vehicles but trips will be way up because of cheapness. These people did a study about how people used cars when they could be driven any where for free on demand - and yes, more trips - including for deliveries.

So while parking needs may go down, and traffic may be a bit more efficient, in dense towns, still so many more people choosing single-user car trip if it gets cheap - so congestion. Already, Uber is doing it to NYC etc.

So way to deal with congestion is "surge" pricing. If the autonomous ride provided can monopolize, they can just pocket super profits by jacking up prices at peak times (it will be more costly but still a value option because fast, easy etc) - such surge pricing would be doing same thing as congestion tax/pricing some cities do - but all the money going to monopoly.

I think cities will very soon need to figure out how to put democratic controls on the autonomous systems in their cities if competition doesn't ensure low margins and congestion gets out of control. NYC already demands that data from Uber and Lyft - that should be done, and cities should do the congestion pricing also.

But I'm pretty sure autonomous vehicles will free up parking spaces in net - and make building new units with less parking needs way more affordable, so likely deflationary impact.

[amiller92]

Even if autonomous vehicles need help and aren't Level 5 - think what a fairly dumb but cheap per mile system of small electric shuttles running frequently on a bunch fixed routes could accomplish.

Either you're talking about a bus network, which we have and I'm not sure I see a big difference until the technology gets a lot cheaper than the driver (may not be that far away) and there's a solution to the non-driving things the driver does (or we just abandon those things). Or you're talking about dedicated right of way, which could be faster and more convenient, but we can't get for buses so how are we going to get that?

[FISHMANPET]

Labor is the highest cost for providing transit service, I think there's a lot of opportunity for driver-less bus services.

[MNdible]

I think we've discussed this before, but there's a real opportunity for small driverless shuttles to fill in the "last mile" problem of existing transit. Think especially of some of the large office buildings that are close to but not immediately adjacent to LRT stations.

[amiller92]

My biggest concern is autonomous ride hail systems may monopolize a city like, say Comcast does for ISPs.

Hm. I guess I'm not sure I see a "natural" reason why that would be the case. Leaving aside that ISPs are sometimes granted municipal monopolies, a big reason that type of business tends toward monopoly is the high fixed cost of running another set of wires (or pipes, for other similar industries) that connects to everyone's house. You don't need to do that to add a new ride sharing vehicle, and even adding a new hailing app is relatively low cost.

Obviously, an app is more useful if it's got more vehicles available on it, but I'm not sure that's a real network effect that will act as a barrier to entry, in part because using more than one app isn't hard but also because you have to think someone will offer and open app eventually. At the moment, it seems most drivers are doing both Uber and Lyft (will be interesting if one of those companies tries to make drivers be exclusive).

ETA: Maybe I'm not thinking correctly about this in a world of autonomous vehicles, though, if the app provider also owns and exclusive fleet of autonomous vehicles. That's a much bigger barrier to entry and a reason why they'd try to be exclusive, but it's also a more difficult business model than the current ride hailing companies, who get a real advantage from the drivers owning their own cars. I guess I think if autonomous vehicles work as expected, there will be competition to get private owned ones onto a ride hailing network as a means of keeping ride hailing costs down.

If the autonomous ride provided can monopolize, they can just pocket super profits by jacking up prices at peak times (it will be more costly but still a value option because fast, easy etc) - such surge pricing would be doing same thing as congestion tax/pricing some cities do - but all the money going to monopoly.

Surge pricing does not require monopoly, and would occur in perfect competition as well. The whole point is that the price changes to make supply and demand meet as conditions change.

[amiller92]

Labor is the highest cost for providing transit service, I think there's a lot of opportunity for driver-less bus services.

Right, losing the driver could bring down costs marginal costs a lot, as long as we don't worry about things like helping disabled passengers board, strapping down wheelchairs, adjusting stops so people aren't trying to climb over snowbanks or exiting into puddles, giving directions, providing supervision for unruly passengers, enforcing decorum, etc.

Some of those things could obviously be replaced with better stops/stations, maps and route finding, better designed buses, but not all.

[FISHMANPET]

Yeah doing a find/replace driver with driverless in our current system would not be great, but I think collectively there's a bit more imagination behind the problem than that.

[David Greene]

I hate to spoil it but autonomous vehicles aren’t going to work.

There is sooo much money and focus pouring into autonomous vehicles, they will figure it out. Consider the sensors and computing power needed to make autonomous vehicles work are dropping in price by double digits each year consistently and AI is getting consistently better also. Add to it electric vehicles, ideally suited as fleet vehicles because of their low maintenance cost and low fuel costs, including their batteries, keep getting cheaper with better range each year.

The technology is not the problem. I don't think it will be ready in the timeframe many have predicted, but it will get there.

The much bigger problems are social and political. People will want to own their own vehicles and will be reluctant to let others use them (damage risk, etc.). There's a comfort level of security with ownership that doesn't exist with true sharing. Need a car right now? I've got one. People will probably use autonomous vehicles for some of the same advantages transit has: time-savings by doing reading/work/whatever during their commutes.

I think it's just as likely that autonomous vehicles will increase congestion as much as it is that they will descrease it. They won't decrease parking considerably because all of those owned vehicles will have to park somewhere. They *may* shift parking to the outskirts of, say, downtown, but momentum is a killer. If traffic is a problem with single-occupant vehicles, what will it be like with *zero*-occupant vehicles? Moving parking further out makes that even worse. In addition, I think there's a real possibility that autonomous vehicles make sprawl worse, as a 45-minute commute doesn't look so bad when you can be productive during it. Be prepared to fight freeway expansion.

On the political side, the carmakers are going to promote ownership as much as corporately possible. Look for regulations on autonomous vehicles designed to promote ownership (liability laws, etc.). Also forget about upgrading your software -- you'll have to buy a new car.

On the plus side, if electrics make up a significant amount of the fleet, we'll see a lot more charging stations come online. I've been fairly amazed at the increase in stations even in the short two years we've owned our LEAF. Autonomous operation should provide a decent boost in range.

Truly autonomous transit vehicles would be a real boon (except for the operators) but concerns about making them work for the disabled are real. Also something will have to be done about safety/passenger misbehavior. There isn't a simple solution. I don't think we'll see them on regular-route service for quite some time. LRT, BRT and expression buses are real medium-term possibilities. The ATU will certainly demand a "safety officer" or some such thing on board, to make sure things are running smoothly. I doubt they would be paid less than an operator. If so, the advantages of autonomous vehicles become less clear.

[xandrex]

In regards to transit, we already have vehicles that, yes, are driven, but don't provide any help with wayfinding, boarding the disabled, proof of payment, or security: It's light rail. Obviously that comes with some advantages - level boarding, a smoother ride, etc. that mitigate some of the above effects.

That said, it's not hard to imagine that if we can build autonomous transit vehicles that safely roam the streets that we can't also find a way to solve some of those issues with technology (and/or better bus stops). If a safety/decorum officer of some sort needs to be on the vehicle, I wouldn't be surprised if they were more or less paid minimum wage (since most of their job would just be sitting there). That could take a huge bite out of wages if workers weren't entirely eliminated from that particular part of the process.

[karen nelson]

My biggest concern is autonomous ride hail systems may monopolize a city like, say Comcast does for ISPs.

Hm. I guess I'm not sure I see a "natural" reason why that would be the case. Leaving aside that ISPs are sometimes granted municipal monopolies, a big reason that type of business tends toward monopoly is the high fixed cost of running another set of wires (or pipes, for other similar industries) that connects to everyone's house. You don't need to do that to add a new ride sharing vehicle, and even adding a new hailing app is relatively low cost.

Obviously, an app is more useful if it's got more vehicles available on it, but I'm not sure that's a real network effect that will act as a barrier to entry, in part because using more than one app isn't hard but also because you have to think someone will offer and open app eventually. At the moment, it seems most drivers are doing both Uber and Lyft (will be interesting if one of those companies tries to make drivers be exclusive).

ETA: Maybe I'm not thinking correctly about this in a world of autonomous vehicles, though, if the app provider also owns and exclusive fleet of autonomous vehicles. That's a much bigger barrier to entry and a reason why they'd try to be exclusive, but it's also a more difficult business model than the current ride hailing companies, who get a real advantage from the drivers owning their own cars. I guess I think if autonomous vehicles work as expected, there will be competition to get private owned ones onto a ride hailing network as a means of keeping ride hailing costs down.

If the autonomous ride provided can monopolize, they can just pocket super profits by jacking up prices at peak times (it will be more costly but still a value option because fast, easy etc) - such surge pricing would be doing same thing as congestion tax/pricing some cities do - but all the money going to monopoly.

Surge pricing does not require monopoly, and would occur in perfect competition as well. The whole point is that the price changes to make supply and demand meet as conditions change.

From what I have read, those who have studied this well seem to have similar view as you, so I am hopeful that monopolies will not be an issue. Tony Seba's Rethinkx report seems to think that the barriers to entry for a Transportation as a Service (Taas) ride-share autonomous vehicle systems will be low enough that it will keep even an essential monopoly on its toes - their comparison is Amazon's cloud services, even though they dominate, they seem to be keeping at reasonably low margins as they know if they got too greedy, others could swoop in fairly easily.

But if you have all the effeciencies of owning the whole local fleet of ride-share cars , (and maybe even shuttles and shared ebikes - that is you are THE transportation provider of all the for-hire wheeled things in a city - as Ford has reportedly pitched as idea to Minneapolis) and you have THE software system that operates them in a given metro region, the for a new competitor to succeed, they would have to come in day one with a very large fleet vehicles and well fleshed out user-interface software and traffic management software ... or be prepared to bleed cash figuring out a way to pry people from a transportation OS people already know and like (see MS windows, Apple apps/ITunes eco system - Google had to give out Android for free to get traction). But given it is a a one or two winner takes all situation often with new tech, getting funding to try to wipe out an incumbent may not be as difficult as it is on other traditional businesses. IDK.

Also, though autonmous ride-share systems vehicles could get very cheap on a trip/mile basis and thus tend to take over, I think annual cost of individual owned autonomous vehicles still may also get so cheap, that it would keep Taas systems honest.

There will be so much tech advancement in batteries and the expected efficiencies that should lead to individually-owned autonomous electric vehicles getting much cheaper because fleet-vehicle tech will relentlessly improve. These individually-owned autonomous electric vehicles (AEVs) would super cheap to fuel, maintain, and insure just as the ride-share fleet AEVs will be. And the individually owned autonomous cars would have lots of the same conveniences of ride-share - like today's Uber rides or tomorrow's fleets of ride-share AEVS, because your car could drop you off and park elsewhere, if need be, and you could still do other things while in it because you don't have to drive.

The individually-owned autonomous cars won't be driven nearly as much as ride-share fleet AEVs, so the up front cost of individually-owned cars would spread over far fewer trips/miles, be more expensive on a monthly basis. But say using ride-share fleet AEVs would cost people $150 a month on average and an individually-owned AEV would cost , say, $350/month on average ($25k-$30k car with very low operating costs - cheap insurance, cheap fuel, cheap maintenance)...then folks living in single-family homes who already have parking at home and plug-in for overnight electricity and parking at work, they may gladly pay the extra to have some convenience of individually owned AEV. So the you might have a ton of people with 5-year-old autonomous electric cars that are already paid for, as competition to ride-share fleets. So if the ride-hailed vehicles started charging too much per trip, people would just keep owning their own autonomous vehicles. Come to think of it, people who owned individual cars will likely also have the option to allow others to use them while they had them parked (AirBnB for your car - many Tesla owners already to this via Turo app), so that would serves as another form of competition to ride-share fleet monopoly.

I think in suburbs, the ride-share AEVs that need no parking will be less appealing, because what else you going to do with your garage and off-street parking anyways - making it into an ADU would cost lost of money for eletricity, plumbing etc. Also individually owned AEVs will allow people to store gear in their cars, so families with kids, sports folks, and work vehicles where you want to keep tools, supplies etc in car - those folks will see the extra cost to keep an individual owned-car as a value proposition. So hopefully that keeps the ride-share systems from getting to greedy.

But in denser cities, where parking adds big costs, where workplaces and retail will not offer parking anymore, and for people who don't need to store stuff in a truck or mini-van, ride-share autonomous fleets could actually charge a lot of money and people would still ditch their individually owned cars for them. The value is there because parking space costs so much dang money in denser places (big cities, downtowns and main streets of smaller cities/towns) and reducing parking needs and spreading cost of AEVs out of many 100ks of miles a year will save so much money will make the "cost of goods" to the supplier is super cheap...it's just a question of how much competition there will to keep margins lower.

[karen nelson]

The technology is not the problem. I don't think it will be ready in the timeframe many have predicted, but it will get there.

The much bigger problems are social and political. People will want to own their own vehicles and will be reluctant to let others use them (damage risk, etc.). There's a comfort level of security with ownership that doesn't exist with true sharing. Need a car right now? I've got one. People will probably use autonomous vehicles for some of the same advantages transit has: time-savings by doing reading/work/whatever during their commutes.

I think it's just as likely that autonomous vehicles will increase congestion as much as it is that they will descrease it. They won't decrease parking considerably because all of those owned vehicles will have to park somewhere. They *may* shift parking to the outskirts of, say, downtown, but momentum is a killer. If traffic is a problem with single-occupant vehicles, what will it be like with *zero*-occupant vehicles? Moving parking further out makes that even worse. In addition, I think there's a real possibility that autonomous vehicles make sprawl worse, as a 45-minute commute doesn't look so bad when you can be productive during it. Be prepared to fight freeway expansion.

On the political side, the carmakers are going to promote ownership as much as corporately possible. Look for regulations on autonomous vehicles designed to promote ownership (liability laws, etc.). Also forget about upgrading your software -- you'll have to buy a new car.

On the plus side, if electrics make up a significant amount of the fleet, we'll see a lot more charging stations come online. I've been fairly amazed at the increase in stations even in the short two years we've owned our LEAF. Autonomous operation should provide a decent boost in range.

Truly autonomous transit vehicles would be a real boon (except for the operators) but concerns about making them work for the disabled are real. Also something will have to be done about safety/passenger misbehavior. There isn't a simple solution. I don't think we'll see them on regular-route service for quite some time. LRT, BRT and expression buses are real medium-term possibilities. The ATU will certainly demand a "safety officer" or some such thing on board, to make sure things are running smoothly. I doubt they would be paid less than an operator. If so, the advantages of autonomous vehicles become less clear.

I just was writing some of the same things you were saying - in terms of ride-share, Transportation as a System - taking over, I think it will be all about how cheap autonomous electric vehicles can get - and think tech advancments in computing, sensors, processing power, batteries etc shows use that will be very cheap. And then you get the fleet cars doing 10-12 trips a day instead 2-3 for individually-owned cars, or 100k miles a year - these ride-share hailed vehicles could get super cheap per trip. If they get down to less than $100 a month all-in for every trip you want to take in a city for most people that drive 10k miles a year....watch out.

Because, what really, really makes them cheap in denser places is reduced parking needs - not so much in the cost of the car, but the cost of all the parking people are providing. If residential and commercial developers can build with no parking and still get tons of demand (in fact maybe even a premium for nice walkable density zones and lower costs/rents because building for no parking reduces $/sf of the projects), then ride-shares will take over in those areas, as there would be no parking available, and those denser, no parking areas will spread. (Cheap ride-shares may even tend to clump things in even wide open places like suburbs - in the way that main streets, and built-up neighborhood central districts developed back before cars and elevators).

On parking and congestion - I think ride-share autonomous vehicles will not doubt increase number of trips by cars or smaller vehicles (vans, shuttles) because they will be cheap and easy to use. They will also no doubt poach from transit and biking (as Uber/Lyft already are doing). How much this makes density of cars on roads at any given peak times or how much all these more trips will decreases travel times - we shall see. The autonomous vehicles will make traffic more efficient, so the net might not be that bad, and if there is some sort of congestion pricing/surge pricing - that would serve to level out use away from peak demand.

I do think ride-share fleets in most cities will greatly reduce total number of vehicles, even if more car trips are happening.

And autonomous cars can park far more efficiently. Autonomous fleet vehicles could park super tight in lines of cars, an if they are ride-share, they order they park in the pack won't matter when everyone leaves work, ride-share cars can peel off out of tight pack of parked cars, one by one as people leave work. And the cars can all park say, a mile or two away, and starting driving back to where all the people are when they start leaving and demanding cars - got to love software and AI - so even with the same number of cars, parking area needed would be way less and far more optimized. And I firmly believe, there will also be less cars. So parking needs reduced.

Also, if public transit adjusts wisely, I see small shuttles running frequently on many more heavily used routes, as way to reduce amount of cars. Trains and big electric BRTs will still make sense for densest areas, routes with lots of congestion, but may other minor routes that are currently too expensive to run city bus routes on, would become economical to have, say 12- person shuttles coming every 5 minutes. Have enough easy on-off shuttles coming every 5 minutes, that cost next to nothing to ride, and that got priority over single-rider cars of any type, that would seriously eat away from individual car use and relieve congestion, even if you have to hop on and off a couple different shuttle routes to get where you going, if they were faster than cars and much cheaper.

And a whole subset of ride-share AEV cars or vans or shuttles could easily be designed to accommodate loading people in wheel-chairs, kids in strollers, people with bikes etc. - just have a ramp out the side or the back of the vehicle.

[amiller92]

But if you have all the effeciencies of owning the whole local fleet of ride-share cars

That's really the question, I guess, but it seems like you wouldn't want to own the fleet, which is a big bag of fixed costs, if you could avoid it and instead get people to purchase their own cars and lend them to the network the way rideshare works now.

you have THE software system that operates them in a given metro region, the for a new competitor to succeed, they would have to come in day one with a very large fleet vehicles and well fleshed out user-interface software and traffic management software

I guess I was assuming we were talking about truly autonomous vehicles, that each drive themselves. But I suppose you could also have a network of vehicles that's centrally controlled, in which case that sounds like it would tend toward monopoly. I think there'd be a ton of push back against that model, though. People like their freedom and all.

Come to think of it, people who owned individual cars will likely also have the option to allow others to use them while they had them parked (AirBnB for your car - many Tesla owners already to this via Turo app), so that would serves as another form of competition to ride-share fleet monopoly.

I think the only way rideshare as the primary transportation provider ever takes off is car sharing.