I am not convinced that autonomous vehicles will make “location” irrelevant. 

But I do agree with the following line from this recent Bloomberg article called, A Driverless Future Threatens the Laws of Real Estate.

“The link between property and transport has been perhaps the most durable in human history.”

So this remark by David Silver could very well be correct:

“Real estate might be the industry that is most transformed by autonomous vehicles.”

Technological advances in mobility have historically brought about decentralization because each advance – from streetcars to the automobile – made it reasonable to travel further distances.

Of course, autonomous vehicles are also expected to free up our time and focus while in transit – although trains do that for us today albeit with that pesky last mile problem.

But just like the internet in the late 90′s didn’t make location irrelevant (the opposite appears to have happened), I am similarly unconvinced when it comes to autonomous vehicles. What we consider a desirable location may simply shift.

So this is not to say that the won’t see profound change in our cities. We will. Which is why we’re all trying to get ahead of it.

Albert Wenger of Union Square Ventures recently gave a talk at the 2017 Blockstack Summit about “Decentralization and the Knowledge Age.”

He starts by talking about motivation and coordination.

The state, he argues, is good at coordination, but not so good at motivation. The market, on the other hand, is good at motivation, but not so good at coordination. Money and self-interest are powerful incentives.

He then talks about how networks have improved the market, the firm, and the state. When the cost of sharing information drops, everything gets better.

But there are downsides to networks. For one, they form monopolies. Consider Facebook in social. Google in search. Amazon in ecommerce.

They also create environments ripe for censorship and “algorithmic abuse.” Everything you see in your feeds is optimized to make you respond and/or feel a certain way. The line between delivering you relevant content and deliberate manipulation is perhaps a fine one.

So what’s the solution? Decentralized blockchain networks are one exciting possibility. But they also have their own limits and drawbacks. Albert touches on those in his talk.

The video is about 24 minutes. If you can’t see it below, click here.

[youtube https://www.youtube.com/watch?v=LgQT874KHuw?rel=0&w=560&h=315]

I speculate a lot on this blog about what electric and autonomous vehicles will mean for the future of our cities. The reason it’s speculation is because it’s phenomenally difficult to know with any sort of certainty what the downstream effects of these technologies will be.

I’ve seen some people claim that a car is still a car. That is, all of the same rules will apply even if they’re powered completely by renewals and we manage to make drivers obsolete (5-10 years?). But I fundamentally disagree with this line of thinking. There will be both positive and negative consequences. They are just yet to be seen.

Benedict Evans recently wrote a post where he started to think about where some of these changes might happen. And so I thought it might be valuable to throw a few of these into the discussion mix. Here are some of his ideas:

• About half of car maintenance spending in the US goes to things directly related to the internal combustion engine. Electric takes that away.

• There are about 150,000 gas stations in the US. They go, along with their associated convenience stores, which is where the margins are made. Interestingly enough, more than half of all US tobacco sales happen at gas stations. Where does that go?

• It is estimated that electric vehicles will increase overall electricity demand by 10-20%. But this could disappear with the battery storage and off-peak power.

• Globally, about 1 million people die every year from car accidents. In the US, something like 90% of all accidents are thought to be caused by human error and about 1/3 of fatal accidents involve alcohol. Autonomy has the potential to take most of this away. Personally, I think we’ll look back and think about how dangerous driving used to be and wonder how/why we all did it.

• A complete rethink of parking. This obviously gets talked about a lot. ~14% of LA’s land is thought to be used for parking. My guess is that parking ratios/requirements go way down (we’re already in the 0 to 0.3 per residential unit territory here in Toronto) and parking garages transform into yards for AVs.

• Autonomous vehicles once again rewrite the retail real estate landscape. Benedict believes they will create more billionaires in real estate and retail than in tech or manufacturing. I like how he describes big box retailing as an arbitrage of land costs, transportation costs, and people’s willingness to drive and park. This point is likely about AVs + e-commerce. See yesterday’s post about Amazon.

• Finally, his last point is that autonomous vehicles could become a kind of mobile Panopticon. The Panopticon was an institutional building typology conceived of by Jeremy Bentham in the late 18th century. It was based on the idea that inmates could all be monitored by a single watchman, without any of the inmates knowing if they were, in fact, being watched. It was a way of trying to impose strict obedience in prisons, and so on. Since virtually all autonomous vehicles require some sort of computer vision, Benedict argues that they could become the 21st century watchmen. Move over CCTV.

The other big question is about decentralization. New transportation technologies have consistently promoted greater suburbanization – think streetcar suburbs to car suburbs. The fact that you’ll be able to use your time more productively in an autonomous vehicle is continually floated as an argument for this trend to continue. But I haven’t made up my mind about this one.

Do you have any other thoughts on the downstream effects of electric and autonomous vehicles?