December 11, 2015

The Future of Passenger Cars

The Future of Passenger Cars

Recently, I traded in my 10-year-old Lexus for another Lexus. If I keep my new car for the next 10 years, the next car I buy might be a self-driving or autonomous car. I also might never need to buy another car, because, by that time, transportation alternatives might make car ownership unnecessary in most locations.

There are many challenges for traditional automobile companies today:

  • The baby boomer population is aging and will stop buying new cars when they no longer can safely operate a motor vehicle. The Millennials are buying fewer cars and driving fewer miles than any previous generation since World War II.  Today, we are buying 17.5 million new cars each year.  That purchase volume may shrink significantly over time.
  • Alternatives like Zipcar, Uber, Lyft, and improved public transportation make owning or leasing a car less necessary in more densely populated urban areas.
  • Perhaps the biggest nightmare scenario for traditional automakers is that the Millennials are more concerned about the car’s operating systems than they are its performance, as noted in this report.

  • Companies like Google and Apple, which control smart phone and tablet operating systems, are now experimenting with both autonomous cars and the use of alternative fuels.  They may significantly influence the direction of the automotive industry. We could see consumers buying basic components of their cars separately, just as they bought computer components separately, beginning in the 1980’s.

There are several fundamental problems with the way we use passenger cars to achieve mobility and access today:

  • We operate them less than 5% of the time.  In effect, we pay an exorbitant amount of money for something we use a very small percentage of our waking hours.
  • A huge amount of real estate is consumed in parking and storing cars.  Much of that real estate is very high-priced: in upscale residential neighborhoods and in high-rent downtown commercial areas.  In my home town of Darien CT, people park their cars at two train station parking lots on prime real estate before 8 am and leave them there until after 6 pm.  There is a continuous battle between retail merchants and the Connecticut Department of Transportation about how many spaces need to be allocated for rail versus retail customers, since the rail customers leave town for many hours every day.
  • Most vehicles accommodate 5-6 passengers, but when they are in use, the only occupant is the driver. Over 85% of the vehicles clogging major highways like I-95 are single-occupant vehicles.
  • Passenger cars of all sizes share roads with vehicles ranging in size from bicycles and motor scooters on the low end to 18-wheel tractor-trailers on the high end.  In emerging markets like India, they share the road with animals, people walking with pushcarts, rickshaws, and pedi-cabs.  Not surprisingly, people in smaller vehicles are injured or killed in high numbers.
  • Because of incomplete, expensive and inflexible logistics systems, many vehicle trips exist because someone goes somewhere to pick up something that could have been delivered.  Fortunately, same-day delivery services are beginning to replace these unnecessary trips.
  • There are many livery trips in which packages could be delivered along with passengers, but this service is in its infancy.
  • High priced drivers operate many buses with fewer than five passengers.  If single-occupant vehicles are inefficient in having one occupant in a five-person vehicle, having three people in a 50-person bus is even more inefficient.  Using 6-passenger autonomous cars in dedicated or “managed” lanes would be far less expensive than continuing money-losing bus systems, and could be financed by firms like Google and Apple, who are trying to promote autonomous cars.  Transportation experts are beginning to promote this concept.

  • Many drivers do not belong on the road, but need to operate a vehicle to have mobility.
  • Conversely, many parents drive their children and their aging parents because of inadequate mobility alternatives in many communities, wasted time for the parents.
  • Motorized vehicles are used on trips that could easily be replaced by walking, except that road and sidewalk linkages do not exist.  For example, along Route 1 in Norwalk, Connecticut, there are many “big box” retailers.  The distances between doorways of each retailer and its nearest neighbor are less than 100 yards, but people shopping in the retail outlets have to drive from one parking lot to the other because there is no walking path in between.

Aside from the issue of residential sprawl, which takes many trips out of walking, bicycling, or small, motorized vehicle distances, we have created a highly inefficient system for providing mobility to people.  Not only that, we have engineered the certainty of traffic congestion into the system because of a variety of governance decisions:

  • Few people in the state or federal government transportation departments have a demand reduction responsibility. Government transportation departments are focused on increasing the supply of transportation or of promoting group or public transportation, instead of single-occupant vehicles. For example, partial or complete telecommuting is a great option for an increasing percentage of our workforces, but the transportation departments have no competency in promoting these alternatives, and the labor departments are oblivious to them.
  • Relative to ride matching options, the people and institutions responsible for them focus totally on the societal benefit of congestion reduction, as opposed to their social benefits for the individuals involved. Firms like would be better at ride-matching than ride-matching firms focused on transportation efficiency. gets a little closer to this, but it is still too oriented to the transportation and efficiency benefits. uses reward systems to encourage ride-matching, but the relationship-building benefits have not been highlighted.  Probably the closest to this is the web site, which broadly promotes the value of community and relationship-building, but is not as systematic as some of the firms that get people together.
  • Governments have no one focused on aligning their policies to move people out of older vehicles that require more human skill, and into more autonomous, safer and lower polluting newer vehicles.  In fact, in Connecticut, because our personal property taxes are based on appraised value, we actually penalize motorists who buy newer, safer, more autonomous, and lower emissions cars.
  • If people drive fewer miles and do so under safer conditions (less discretionary late night driving), we are lagging in giving them discounts on automobile insurance.

We go through all sorts of hoops to reduce carbon emissions through taxes and penalty proposals, when one of the biggest opportunities is right in front of us.  We also try to reduce healthcare costs, one driver of which is the cost of treating people injured in automobile accidents or who are inhaling pollutants from vehicles around them. Getting people out of single-occupant vehicles would deliver multiple benefits, but governments have to create an integrated accountability to drive health, reduced single-occupant vehicle usage, and reduced environmental emissions.

Government policies have to be aligned better with health, reduced environmental emissions, safety, and reduced traffic congestion than they are today!