Twenty years from today, autonomous vehicles will be the prevailing mode of transportation. The result? Widespread unemployment within the taxi and trucking industries, legal issues regarding accidents, regulatory issues relating to GPS and telemetric data generated by vehicles … and poorer local governments.
Automated vehicles are intended, in part, to make roads safer, lower emissions, reduce traffic congestion, and save energy. Forget distracted driving, poor reflexes, and driving while under the influence—the machine will not find its mind wandering after a long day at the office. Overall, that’s a good thing, of course: The U.S. Department of Transportation National Highway Traffic Safety Administration projected that 32,675 people died in motor vehicle fatalities in 2014. However, better road safety, decreased congestion, and lower environmental impacts will pose surprising challenges to local governments and communities, as some colleagues and I discuss in a recent report from the Brookings Institution.
Since California legalized driverless vehicles, Google has logged more than 1.8 million driverless miles with just 13 accidents reported—all allegedly due to human error. Tesla, Mercedes, and others are not far behind. Tesla’s CEO, Elon Musk, predicts the tremendous safety record of driverless vehicles will demand the banning of nondriverless vehicles on public roadways. And once driverless cars become mainstream, deep revenue sources acquired from driving-related violations such as speeding tickets and DUIs will dry up.
In 2014, Los Angeles generated approximately $161 million from parking violations. Red light violations have come with a fee of $490. Californians caught driving under the influence are fined up to $15,649 for a first-offense misdemeanor DUI conviction. If you’re under 21, that amount could go as high as $22,492. Cities in California collect, on average, $40 million annually in towing fees, which they split with towing firms. And this doesn’t even cover speeding tickets. The hundreds of millions of dollars generated from poor driving-related behaviors fund transportation infrastructure, public schooling, judicial salaries, domestic violence advocacy, conservation, and many others.
Take this one step further. Currently, vehicles sit unused 95 percent of the time. Given the huge popularity of the transportation sharing economy, led by companies like Uber and Lyft, it may become more practical for urban citizens to avoid the costs of ownership completely and embrace a driverless sharing economy. If vehicles are busy almost every hour of the day, dropping off one traveler to pick up another based on highly predictive algorithms that harness user data to maximize efficient use of resources, then parking and towing revenue all but disappear, too.
In essence, the sharing economy is a large, facilitated peer-to-peer platform. Accordingly, local governments have tended to act like the music industry did when Napster disrupted its space. They have tried to step in by regulating these networks. For instance, San Francisco and Portland have sued Uber and worked to limit its ride-hailing services for various named reasons such as safety and operating an unlicensed taxi service. But these actions are probably, at least in part, an attempt to protect their tax revenue.
Even more worrisome from a financial standpoint is what happens when these vehicles become truly eco-friendly. Gas and petrol taxes and fees for emissions are contingent on there being adverse ecological impacts or unrenewable energy use. Pedestrian-friendly cities like Vienna have removed some car lanes and made cycling often more practical than driving. If sustainable urban planning succeeds, then what happens to local government operations? In Washington, D.C., new innovations as simple as phone apps in combination with routine improvements like meter upkeep have already accidentally reduced parking ticket revenue, with a drop from $90,610,266 in 2012 to $84,458,255 in 2013. For instance, users can use their smartphones to remotely feed their meters before they expire, submit parking ticket photos and enter violation codes to an app that provides helpful information on getting the ticket dismissed, and gain real-time GPS traffic navigation through social apps like Waze that reroute drivers through the least congested traffic routes while keeping their friends informed of their destination time down to the minute—so users don’t need to speed to be efficient and they have less incentive to text while driving because others already know when they’ll arrive. At the moment, governments make an awful lot of money off of dumb human decisions. How will your city council make up for the lost cash flow?
For now, enjoy your last few headaches of arriving to your car just as a meter attendant is placing a ticket on it. Feel a twinge a nostalgia and hope that local government uses those funds well, for their days are numbered in issuing such citations.