Why peak car ownership in 2020 isn’t so farfetched

RMI

On Tuesday, the National Highway Traffic Safety Administration (NHTSA) released formal recommendations designed to help states regulate autonomous vehicles.

The guidelines follow advice from the business and safety community: Establish standards for states to adopt a uniform set of rules for autonomous vehicles that ensure human safety, while allowing innovation to continue. The guidelines have been in the works for several months, but their release comes at a time of great activity in the autonomous vehicle space.

The rise in interest in autonomous vehicles is just one indication that the era of high numbers of personally owned vehicles in the U.S. is coming to an end. A new RMI report explores the possibility that a new mobility system will emerge in the next few years that is superior to our existing system in almost every way.

A broken mobility system

We might not think that our current transportation system is broken, but the reality is that we have just gotten used to an archaic, dangerous, dirty, costly, and time-consuming system. Consider these facts:

1. America’s roads are more deadly than every battlefield we have ever fought in combined. The cumulative loss of life in auto accidents exceeds all terrorist and war casualties in our history, including 35,000 last year alone.

2. Our personal vehicles emit over 1 billion tons of CO₂ each year, as well as harmful particulate matter. Our oil dependence is a national security risk.

3. Personal autos are the second highest expense for most U.S. families, second only to housing and greater than food and leisure combined, yet they sit unused (parked) 96 percent of the time. This is terrible asset utilization.

4. We spend about 20 days per year in our cars and waste a week of that delayed by ever-increasing traffic.

We’ve gotten used to this objectively “bad” system because, until now, there was simply no competitive alternative for most Americans. For a variety of reasons, most Americans do not take public transit. Other alternatives like taxis, limos, and Uber are very convenient and have the potential to reduce car ownership, but only a very small percentage of Americans use them as their primary mode due to cost—having your own human chauffeur is expensive.

A new mobility system

But having a robot chauffeur is not expensive. This may seem counterintuitive, but RMI’s report, Peak Car Ownership: The Market Opportunity of Electric Automated Mobility Services, finds that human drivers are about ten times more expensive than a state-of-the-art autonomous vehicle system. Like the printing press, assembly line, word processor, and countless other examples, automating things makes economic sense. In fact, RMI found that the proliferation of mobility services—such as Uber and Lyft—performed by autonomous vehicles could result in the following:

1. By 2018, solely using autonomous taxis for transportation could cost the same as owning and operating a car.

2. Total revenue for early-to-market automated mobility providers could be more than $100 billion by 2024.

3. Automated mobility services could capture two-thirds of the entire U.S. mobility market in 15 to 20 years.

4. Oil companies will lose revenue, utilities will gain, and carmakers will be split.

This is unprecedented; for the first time in history there will be a cost-effective alternative to owning a car that is superior to our current system in almost every possible way. Consider the upside compared to our current system:

1. Loss of life on our roads could plummet by tens of thousands per year since over 90 percent of accidents are caused by human error.

2. High-mileage vehicles greatly accelerate electric vehicle proliferation, reducing emissions enough to affect global temperature and national security.

3. Costs to consumers and society could fall by $1 trillion per year, especially benefitting low-income Americans.

4. Our cities will no longer be designed around cars, but designed around people. We could recover the staggering amount of time and land devoted to cars.

Pitfalls and setbacks are possible, but our current system sets the bar pretty low. A new system that is potentially superior in almost every way must be supported and championed by elected officials, safety advocates, environmental organizations, advocates of income equality, and urban designers.

Uber, in partnership with Ford and Volvo, has begun testing automated mobility service with its customers in Pittsburgh, and Elon Musk stated in his “master plan part deux” that Tesla would soon launch an electric, automated mobility service using its electric vehicles. Tesla has already logged about 200 million “autopilot” miles and is releasing updated autonomous software at fairly rapid pace. Ford announced it will mass-produce autonomous vehicles for use in ride-hailing services (with no steering wheel at all) by 2021. Lyft and GM have already begun testing autonomous electric Chevy Bolts, and similar to Uber, they plan to deploy them to Lyft customers in 2017. Autonomous technology leader Google continues to test its electric autonomous vehicles in several U.S. markets, though it, too, must be surprised by the rate of advancement of potential competitors.

On the surface, all of the activity in Detroit and Silicon Valley may seem like business as usual—large corporations vying for the shiniest new toys to sell to consumers. But when viewed in the context of our failing transportation system, the automation of personal mobility is much more than that—it’s a revolution on the order of the assembly line, on which automobiles got their start 100 years ago.