“Autonomous Vehicles Might Drive Cities to Financial Ruin” – (Wired)

In a recent post exploring the rise of AI and the dramatic effects, it will have on contemporary society as we know it, one of the issues it (I) covered was the soon to arrive issue of unemployment on a MASSIVE scale. Comparisons are made to past transitions, but really, there is no precedent.  Not just on account of the percentages, but also due to our population alone. There are WAY more of us making tracks now than during any past transition. The stakes could not be higher.

I explored some possible solutions to make the transition less drastic, my favorite being universal basic income. Though I explored that in enough depth to be satisfied, Wired has highlighted a new and equally important problem with this transition.  The issue of local budgets becoming EXTREMELY tight on account to autonomous vehicles more than likely operating outside the traditional confines of must city revenue streams (gas taxes, parking tickets, etc).

If we go into these situations unprepared, the conclusion seems altogether terrifying. Cities that were already structurally deficient in many ways in THIS paradigm now fall apart, filled with aimless and angry people, automated out of existence.

Then there is the now past peak of worldwide oil production, a wall we will also begin to increasingly hit in the coming years. Then again, one terrifyingly dystopian issue at a time.


In Ann Arbor, Michigan, last week, 125 mostly white, mostly male, business-card-bearing attendees crowded into a brightly lit ballroom to consider “mobility.” That’s the buzzword for a hazy vision of how tech in all forms—including smartphones, credit cards, and autonomous vehicles— will combine with the remains of traditional public transit to get urbanites where they need to go.

There was a fizz in the air at the Meeting of the Minds session, advertised as a summit to prepare cities for the “autonomous revolution.” In the US, most automotive research happens within an hour of that ballroom, and attendees knew that development of “level 4” autonomous vehicles—designed to operate in limited locations, but without a human driver intervening—is accelerating.

The session raised profound questions for American cities. Namely, how to follow the money to ensure that autonomous vehicles don’t drive cities to financial ruin. The advent of driverless cars will likely mean that municipalities will have to make do with much, much less. Driverless cars, left to their own devices, will be fundamentally predatory: taking a lot, giving little, and shifting burdens to beleaguered local governments. It would be a good idea to slam on the brakes while cities work through their priorities. Otherwise, we risk creating municipalities that are utterly incapable of assisting almost anyone with anything—a series of sprawling relics where American cities used to be.

A series of sprawling relics where American cities used to be.

Like this?

The fact that Detroit blight jumps right to the forefront of the mind when the topic of urban wastelands is broached, is unfortunate. I don’t live anywhere near the city (nor have I ever visited), but even I know that the remeaning residents are often doing anything in their power to improve their environment. The evidence is scattered all over Youtube and social media in general.

I decided to use the example, frankly, because I didn’t like the way the author seemed to gloss over the notion of the deterioration of cities using the term relics. A relic to me is something old and with former purpose, but now obsolete.
Cities (like Detroit) will likely never be obsolete.  They will just continue to suffer the continued effects of entropy, while still being necessary for the survival of their inhabitants.

It may just be a linguistic critique, but it still doesn’t sit well with me.

Moving on, the other reason why Detroit (and really, many similar cities all over the US) come to mind is that it’s not the first time innovation has left locales in the lurch.  Detroit (and the others as well) have other factors at play as well (white flight being one), but a big one lies in the hands of private entities. Automation itself requires fewer positions, and when combined with an interconnected global economy, the results can be tragic.
As much as I am fascinated by technology (and view it as being the new societal stasis from now on), it’s hard not to see it as one of the largest drivers of income inequality.
Workplace innovations are almost as a rule, NOT good for anything but the bottom line. As you need fewer workers (and can employ them in places with inhumanly low wages), it’s almost inevitable that inequality will only balloon.

In the past, one could balance this out somewhat with the service sector, an industry that is a necessity everywhere and can reliably create cash flow from essentially nothing. It has served as somewhat of a crutch for some unemployed people. These jobs are by no means on par with previous positions (something many slanted commentators overlook either ignorantly or deliberately), but none the less, they serve a purpose.

Or, at least they do for the time being.

The first big round of automation and economic shifts hit the manufacturing sector hard, leaving in its wake the many examples of civil and urban decay. Though the new economic realities of free trade were not really an issue for the service industry (generally, the opposite actually), that paradigm may well be starting to shift.
Already, automation is slowly making its presence seen in the world of service. On top of this, online retailers are gradually rendering once absolutely necessary brick and mortar retail stores and complexes obsolete. While I can see some areas of the service sector as being permanent, local retail is not one of them. At least not in the numbers it generates today.

Hot or cold food is a challenge from a logistics perspective (when the lengthy supply chains of your average online retailer are considered). This, coupled with people wanting to eat out every so often, will hold a place for the family restaurant (or possibly even the fast food outlet) in the local landscape for the time being. Stores on the other hand (particularly larger retailers) are a different matter.

There will exist local shops, I have no doubt there. But I doubt that the selection (or prices) would come anywhere close to what consumers can now get in big box retailers, or will then be able to get with big online retailers. This, combined with the increased automation of future service encounters, could make things very challenging for anyone with any hesitation towards technology. I suspect that many such people will move (or be pushed out) of larger cities and towns, far from the machine.

The demise of big-box retail is, on one hand, a good thing. They tended to be notoriously toxic when it came to local economies to begin with, not beyond many types of bullying tactics in order to maintain such perks as tax-free status. Consider the case of the big box retailer that relocates a couple miles over to another country in order to break a union, skip out on a local tax, or whatever action they deemed punitive. Therein the county ends up reaping all the negatives of such an enterprise without having any of the positives.

The world can do with less big boxes sucking up energy and contributing to an EXTREMELY energy inefficient way of life that we can no longer afford for a number of reasons. But having said that, economically, this will only succeed in turning almost the whole of most countries into the loser county to the big boxes relocation. One or 2 cities that are home to the distribution facilities will see some benefit, but that is it. The rest see nothing but the infrastructural wear and tear, and the trash.
And things probably won’t be rosy even for the seemingly lucky host cities of these distribution centers, because of the power these entities now have. Take the case of Seattle.

It would seem that I am now miles from where I started off (autonomous vehicles & city budgets). But it all plays into the very same thing. Just as I suspect that the majority of future retail distribution will be based out of a small number of warehouses and based around a largely autonymous transportation (be it truck, plane or drone), I can also see such a model for autonomous vehicle distribution.
When the time comes when rented autonomous vehicles are reliable enough to allow the majority of people to ditch one of the largest expenses in their lives (a vehicle), it will become increasingly financially feasible to own and maintain large fleets of always ready autonomous vehicles. Like how self-hauling rental services operate almost ubiquitously on the North American continent with one control center, I can see an alike entity operating huge fleets of self-driving vehicles.

Though these vehicles will utilize some local services (mechanics, cleaners, maybe electricity), as the article states, I doubt it will ever come close to covering the costs of maintaining the infrastructure on which they depend on for their operation. Which more than likely means that consumers will be footing the bill, be it through taxes or user fees.

The problem, as speaker Nico Larco, director of the Urbanism Next Center at the University of Oregon, explained, is that many cities balance their budgets using money brought in by cars: gas taxes, vehicle registration fees, traffic tickets, and billions of dollars in parking revenue. But driverless cars don’t need these things: Many will be electric, will never get a ticket, and can circle the block endlessly rather than park. Because these sources account for somewhere between 15 and 50 percent of city transportation revenue in America, as autonomous vehicles become more common, huge deficits are ahead.

Cities know this: They’re beginning to look at fees that could be charged for accessing pickup and dropoff zones, taxes for empty seats, fees for parking fleets of cars, and other creative assessments that might make up the difference.

But many states, urged on by auto manufacturers, won’t let cities take these steps. Several have already acted to block local policies regulating self-driving cars. Michigan, for example, does not allow Detroit, a short drive away from that Ann Arbor ballroom, to make any rules about driverless cars.

A preemptive strike.

Not that such surprises me. Auto companies already are blurring the line that once separated them from tech companies. I say this due to a bit of exposure to the computers that drive today’s vehicles, having helped a self-taught mechanic tinker with the tune of his 2013 Ford F150. The internet is a limitless resource for this sort of thing. I taught him the basics of how to use this tool, and he ran with it.

It’s not surprising that automobile manufacturers are greasing the gears in statehouses all over the country already. I wouldn’t be surprised that other tech entities are also doing the same thing.

This loss of city revenue comes at a harrowing time. Thousands of local public entities are already struggling financially following the Great Recession. Dozens are stuck with enormous debt loads—usually pension overhangs—that force them to devote unsustainable portions of their incoming revenue to servicing debt. Cities serve as the front lines of every pressing social problem the country is battling: homelessness, illiteracy, inadequate health care, you name it. They don’t have any resources to lose.

The rise of autonomous vehicles will put struggling sections of cities at a particular disadvantage. Unemployment may be low as a national matter, but it is far higher in isolated, majority-minority parts of cities. In those sharply-segregated areas, where educational and health outcomes are routinely far worse than in majority white areas, the main barrier to employment is access to transport. Social mobility depends on being able to get from point A to point B at a low cost.

Take Detroit, a city where auto insurance is prohibitively expensive and transit has been cut back, making it hard for many people to get around. “The bus is just not coming,” Mark de la Vergne, Detroit’s Chief of Mobility Innovation, told the gathering last week, adding that most people in the City of Detroit make less than $57,000 a year and can’t afford a car. De la Vergne told the group in the Ann Arbor ballroom about a low-income Detroit resident who wanted a job but couldn’t even get to the interview without assistance in the form of a very expensive Lyft ride.

As explored before, I suspect that the scaled economies of owning and operating massive fleets of self-driving vehicles may help with this problem. But with the shrunken job market and other local problems coming down the pipe, this hardly even seems a benefit worth mentioning.

That story is, in a nutshell, the problem for America. We have systematically underinvested in public transit: less than 1 percent of our GDP goes to transit. Private services are marketed as complements to public ways of getting around, but in reality these services are competitive. Although economic growth is usually accompanied by an uptick in public transit use, ridership is down in San Francisco, where half the residents use Uber or Lyft. Where ridership goes down, already-low levels of investment in public transit will inevitably get even lower.

When driverless cars take the place of Uber or Lyft, cities will be asked to take on the burden of paying for low-income residents to travel, with whatever quarters they can find lying around in city couches. Result: Cities will be even less able to serve all their residents with public spaces and high-quality services. Even rich people won’t like that.

America has been under-funding essential services across the board for decades. The fact that this is likely to REALLY bite the nation in the ass when they are least prepared to deal with it, is just the cherry on top.

Also, I don’t know that Uber and Lyft will necessarily get replaced. I suspect that they may still exist, but just with much fewer employees. Who knows, one (or both) may become one of the autonomous vehicle behemoths I see existing down the road.

As for the comment about rich people . . . get real. Nothing matters outside the confines of the gated communities in which they reside. Even when the results of their actions are seemingly negative to them in the long term.

Money is a powerful blinder.

It will take great power and great leadership to head off this grim future. Here’s an idea, from France: There, the government charges 3 percent on the total gross salaries of all employees of companies with more than 11 employees, and the proceeds fund a local transport authority. (The tax is levied on the employer not the employee, and in return, employees receive subsidized or free travel on public transport.)

This helps the public transportation angle, indeed. But it doesn’t even touch the infrastructure spending shortfall, a far more massive asteroid to most localities.

At the Ann Arbor meeting, Andreas Mai, vice president of market development at Keolis, said that the Bordeaux transit authority charges a flat fee of about $50 per month for unlimited access to all forms of transit (trams, trains, buses, bikes, ferries, park and ride). The hard-boiled US crowd listening to him audibly gasped at that figure. Ridership is way up, the authority has brought many more buses into service, and it is recovering far more of its expenditures than any comparable US entity. Mai said it required a very strong leader to pull together 28 separate transit systems and convince them to hand over their budgets to the local authority. But it happened.

It’s all just money. We have it; we just need to allocate it better. That will mean viewing public transit as a crucial element of well-being in America. And, in the meantime, we need to press Pause on aggressive plans to deploy driverless cars in cities across the United States.

Public transit is just a part of the problem. I suspect a very small part, at that. And likely the easiest to deal with.
You can not have a public transportation system (or at least not a good one) without addressing infrastructure deficits. And this is just the transportation angle. You also have to contend with water & sewage, solid waste removal,  seasonal maintenance and other ongoing expenses.

Indeed, it is a matter of money and funding allocation. However, the majority of the allocation HAS to start in Washington, in the form of taxation on wealth. As bitter of a pill as that is to swallow, the failure of that course of actions may well make us nostalgic of post-2016 turmoil. Pretty much every leader post-Regan added a little more fuel to the powderkeg, but failure to prepare for coming changes adequately may well set the whole damn thing off.

As for pressing pause on the deployment of driverless vehicles in the cities of the world, we already know that such a plan won’t work. The levers of power are being greased as we speak. Thus, the only option is preparation. Exploration. Brainstorming.

There likely is not going to be a paradigm that fits all contexts, and there will be no utopias. But there is bound to be something between the extremes of absolute privatization and dystopia.

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