Thoughts on Driverless Cars (part 4 of 6)

This is a continuation of my thoughts on where we are headed with driverless cars. I would recommend reading this series from part 1.

Previously, we discussed “How does ride-hailing fit into all of this?” In this post, I wanted to provide some my thoughts on how driverless technologies will change our cities, towns and other urban environments.

How will driverless cars change our environment?

With driverless technologies the amount of space between cars when driving can be significantly reduced. Automated  reactions to what is in front of a vehicle mean that vehicles don’t need as much empty space between one another when commuting.This means more cars could proceed through a single green light, drive in a single lane on highways and roads, and overall provide better throughput in our transportation infrastructure. As a result of these changes the way cities evolve will change quite dramatically.


Because we can place many more vehicles on the road, it may make sense to reduce the number of lanes and build parks instead. To push this level of infrastructure change is both (1) idealistic, and (2) a significant monetary investment. I would expect that little is done to change the number of lanes on the road, and instead allow for many more vehicles to travel on the road. If the lanes were to reduce, it would probably be for additional commercial and residential property as opposed to parks. Its up to state and municipal governments to determine how they should address the more empty streets.

Extending the suburbs

While trends are pushing populations towards urbanization, driverless technologies will actually instead extend suburban boundaries. Current suburban boundaries average around a ~40min commute radius around commercial epicenters. With driverless technologies, traffic congestion due to breakdowns or accidents should reduce significantly, leading to reduced commute times. Factor this in as well as the fact that riders can perform other tasks while commuting (e.g. working, teleconferencing, etc) and the radius will dramatically increase.

Although people will pursue suburban living for more space, and better schools, suburbs will begin to take a different shape. People will not want to drive to restaurants from their homes, people want their services to be walkable and nearby, so suburban downtowns will become more common where people congregate to experience cultural events and activities.

Powering the commute

One of my earlier stated assumptions was that most if not all driverless vehicles will be electrically powered (see part 1). But where does the electricity come from. I also assumed that most of the population will not own their own vehicle, and powering cars via your home solar system would not make direct sense. Where the economies of scale work the best is if power plants are still used to power driverless cars, but don’t require much distribution to reach each person’s home. Instead because many vehicles are idle during the late evening hours, power plants can be utilized during typically idle times to charge driverless EVs that have navigated themselves directly to the power plant. This eliminates distribution loss, and provides better energy production efficiency for the vehicular world.

Socioeconomic stratification

With better schools and more space creating extended suburbs, where do middle and low-income individuals and families reside. Again, assuming the 40min commute time radius, they will opt for shared OpEx (pooling) transit models that are cheaper, but will require more time, thus bringing their radius closer to the urban centers. Urban centers will continue to be costly, as younger generations look for high density cultural activities in their downtown, so we will see a “donut” of low to middle income residential areas around the city centers.

State and municipal groups will need to find ways to help integrate these areas to encourage more mixed income zones as this has been proven to lead to greater prosperity.

Number of vehicles

Americans on average spend <4% of their time driving. As a result, it makes sense that we increase the average car’s utilization so we can more actively use these highly engineered pieces of machinery (don’t expect more than 25% utilization though). This means a lower number of total vehicles will be on the road, but also as a result, higher quality, better performing vehicles will be required. Vehicles will wear out faster (more miles/day will require more frequent maintenance) and as a result, the total number of vehicles required for production will be roughly the same.

Maintenance and Recycling

Although there will be less vehicles on the road, the number of miles driven on them will increase, creating more frequent maintenance activities. Parking providers (as discussed in part 3) will need to service vehicles in addition to charge vehicles during the >75% of their idle time. This servicing will include repairing and replacing parts.

Given predictive modeling and machine learning, fleet operators will be able to predict when parts on vehicles will fail. As with aircrafts, it is important that these vehicles get back on the road as fast as possible. Fleet operators will lean on parking lots to expedite the servicing of these vehicles.

Additionally, the wear and tear on these vehicles will require frequent replacing of parts and often times may require recycling of parts. This faster consumption of parts may lead to more waste, and as a result fleet providers will put pressure on car manufacturers to ensure these vehicles parts are more modular (allowing for faster replacements) and more recyclable, so they can be reused and not lead to greater waste.


Manufacturers are naturally worried about this future given that less cars are on the road, the customer getting more power (since fleets will be purchasers), but in the long run this will be more valuable for them. Companies such as Boeing and Airbus continue to produce more planes and their revenues have been increasing at an annual rate of ~5%. OEMs will turn into a similar model, where they will provide longer lasting , higher performing cars that can be easily serviced.

Manufacturers have focused primarily on ensuring vehicles can run for 100K miles, and more on style. As fleet operators become the primary owners of vehicles, the primary focus will be on maximizing operational utilization and as a result focus on longer lasting vehicles, and less on style.

Fleet operators, as the assets start to age, and operational costs of repairing, and modern comforts lead to lower ridership will begin to sell their autonomous vehicles to lower income areas.


With higher vehicle utilization, there will be fewer vehicles that need to be parked. Most homes will not desire a garage to park their car, instead opting for fleet-based vehicles instead. Additionally, there will be a reduced need for street parking, as parking lots and parking structures will be the main storage for vehicles. With less space being occupied by idle cars, there is more space for walking, commercial and recreational buildings, as well as parks and recreational area. These parking areas will be refurbished just as the lofts and PDR lots of the past have been refurbished for new residence and commercial areas respectively.

Rural areas and construction sites

Two areas where we will see mixed use of driverless technologies is in rural areas and construction sites. Long distance travel in rural areas that takes place on highways will be a primary use for driverless technologies (and perhaps certain areas in the future may become a driverless only area), but it when it comes to less traveled roads or construction sites – areas where there is little to no data, we will require human driving – and this will require special vehicles and special drivers licenses. Supporting these cases will be extremely important for the future of driverless technologies. In fact, for a road to be approved, it may require X hours of model training before it can be sanctioned.

What do you think will happen with cities and rural areas as a result of driverless technologies? I’d love to hear your thoughts.

In the next post, I’ll discuss my thoughts on who will have the biggest impact in this market.

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