I just came across the below talk by Tony Seba about the coming “clean disruption” of energy and transportation. The talk follows his book of the same name. Click here if you can’t see it below. It runs about an hour, but I would encourage you to give it a watch.
The first few minutes will be things I’m sure many of you have heard before, such as the failure of Kodak to embrace digital cameras (film business considered too valuable), Moore’s Law, and so on. But he then moves on to cost curves, battery storage, solar power, and autonomous electric vehicles (A-EVs).
You all know that I am fascinated by these topics, so here’s one piece that stood out for me: 2021 is his prediction for the year in which A-EVs become real and disrupt both internal combustion engine (ICE) vehicles and individual car ownership.
I just came across the below talk by Tony Seba about the coming “clean disruption” of energy and transportation. The talk follows his book of the same name. Click here if you can’t see it below. It runs about an hour, but I would encourage you to give it a watch.
The first few minutes will be things I’m sure many of you have heard before, such as the failure of Kodak to embrace digital cameras (film business considered too valuable), Moore’s Law, and so on. But he then moves on to cost curves, battery storage, solar power, and autonomous electric vehicles (A-EVs).
You all know that I am fascinated by these topics, so here’s one piece that stood out for me: 2021 is his prediction for the year in which A-EVs become real and disrupt both internal combustion engine (ICE) vehicles and individual car ownership.
Obviously this won’t happen overnight, but Tony’s belief is that 2021 will be the year that the economics of A-EVs become so compelling (10x) that it will crush our current business models.
The argument is that on-demand ride hailing/sharing and A-EVs will converge and that Transportation as a Service (TaaS) will provide our mobility needs at a fraction of today’s costs. We’ve talked about this prediction before on the blog, but never has a timeline been attached to it.
All of this reinforces two thoughts that I’ve been having over the past few years. One, I will probably never buy another combustion engine vehicle. And two, I should probably avoid buying another vehicle, period, until the next wave of business models becomes clearer. Leasing likely makes more sense at this stage if you need a car.
In fact, Tony believes that with the collapse of individual car ownership, the resale value of cars could become negative. That is, you’d have to pay people to take a car off of your hands, because everyone will recognize the cost advantage of just using TaaS.
We are doing everything we can to future proof our development projects so that they are ready for electric vehicles. But if A-EVs and TaaS completely erase individual car ownership within the next 5 years, then all of us in the industry are going to need to do much more to ready our buildings and cities.
Embedded at the bottom of this post is a great rapid-fire talk by Edward Glaeser about technology and the city.
Technology has always been a fundamental driver of change within our cities and I like how Glaeser starts by referring to these forces as either centripetal and centrifugal. The car was an example of the latter. It spread us out.
At the same time, Glaeser points out that the car was really the first time that urban mobility patterns shifted from hub-and-spoke to point-to-point. Transit systems rely on hubs and some walking, which in a world of cars has led to something we call the last mile problem.
So if all of a sudden AVs are able to decrease the cost of mobility, provide capacity benefits, and increase rider enjoyment (because you’re no longer a driver), vehicle miles traveled are going to go through the roof. This makes a strong case for some form of road pricing.
But it also means that unlike traditional cars, which were a centrifugal force, AVs could in fact turn out to be a force that further centralizes us within dense urban centers.
When you listen to Glaeser’s talk, you will quickly understand why so much attention (this blog included) is being paid to autonomous vehicles. They are one of – if not the – next great technology bound to reshape our cities.
Obviously this won’t happen overnight, but Tony’s belief is that 2021 will be the year that the economics of A-EVs become so compelling (10x) that it will crush our current business models.
The argument is that on-demand ride hailing/sharing and A-EVs will converge and that Transportation as a Service (TaaS) will provide our mobility needs at a fraction of today’s costs. We’ve talked about this prediction before on the blog, but never has a timeline been attached to it.
All of this reinforces two thoughts that I’ve been having over the past few years. One, I will probably never buy another combustion engine vehicle. And two, I should probably avoid buying another vehicle, period, until the next wave of business models becomes clearer. Leasing likely makes more sense at this stage if you need a car.
In fact, Tony believes that with the collapse of individual car ownership, the resale value of cars could become negative. That is, you’d have to pay people to take a car off of your hands, because everyone will recognize the cost advantage of just using TaaS.
We are doing everything we can to future proof our development projects so that they are ready for electric vehicles. But if A-EVs and TaaS completely erase individual car ownership within the next 5 years, then all of us in the industry are going to need to do much more to ready our buildings and cities.
Embedded at the bottom of this post is a great rapid-fire talk by Edward Glaeser about technology and the city.
Technology has always been a fundamental driver of change within our cities and I like how Glaeser starts by referring to these forces as either centripetal and centrifugal. The car was an example of the latter. It spread us out.
At the same time, Glaeser points out that the car was really the first time that urban mobility patterns shifted from hub-and-spoke to point-to-point. Transit systems rely on hubs and some walking, which in a world of cars has led to something we call the last mile problem.
So if all of a sudden AVs are able to decrease the cost of mobility, provide capacity benefits, and increase rider enjoyment (because you’re no longer a driver), vehicle miles traveled are going to go through the roof. This makes a strong case for some form of road pricing.
But it also means that unlike traditional cars, which were a centrifugal force, AVs could in fact turn out to be a force that further centralizes us within dense urban centers.
When you listen to Glaeser’s talk, you will quickly understand why so much attention (this blog included) is being paid to autonomous vehicles. They are one of – if not the – next great technology bound to reshape our cities.
“Maybe autonomous cars will be different from other capacity expansions,” Mr. Turner said. “But of the things we have observed so far, the only thing that really drives down travel times is pricing.”
The argument here is that capacity expansions – such as additional lanes – never solve the problem of gridlock. Yes lane widening projects increase capacity, but the latent demand is so strong that the problem never gets solved. Even in places like Houston.
We talked a lot about this phenomenon on the blog a few years ago when Toronto was embroiled in debate over the Gardiner Expressway East. But it’s interesting to think about self-driving cars as simply another incremental capacity expansion.
I have no doubt that this technology will make more efficient use of our roads. Carpooling will be a lot easier – as is already the case. Cars will be able to drive closer together. We’ll be able to stop abrupt breaking and swift land changes, which actually create systemic traffic problems for everybody else. And the list goes on.
But there will still be limits to how many people can be efficiently moved on a particular strip of road. Exactly how there are limits to how many people can be efficiently moved via a particular subway tunnel, streetcar line, and so on.
So if latent demand continues to outstrip available capacity, which has historically been the case, then we are once again back to the politically unpopular idea of pricing away congestion. As much as people criticize it as regressive, I believe that’s where we’re headed.
“Maybe autonomous cars will be different from other capacity expansions,” Mr. Turner said. “But of the things we have observed so far, the only thing that really drives down travel times is pricing.”
The argument here is that capacity expansions – such as additional lanes – never solve the problem of gridlock. Yes lane widening projects increase capacity, but the latent demand is so strong that the problem never gets solved. Even in places like Houston.
We talked a lot about this phenomenon on the blog a few years ago when Toronto was embroiled in debate over the Gardiner Expressway East. But it’s interesting to think about self-driving cars as simply another incremental capacity expansion.
I have no doubt that this technology will make more efficient use of our roads. Carpooling will be a lot easier – as is already the case. Cars will be able to drive closer together. We’ll be able to stop abrupt breaking and swift land changes, which actually create systemic traffic problems for everybody else. And the list goes on.
But there will still be limits to how many people can be efficiently moved on a particular strip of road. Exactly how there are limits to how many people can be efficiently moved via a particular subway tunnel, streetcar line, and so on.
So if latent demand continues to outstrip available capacity, which has historically been the case, then we are once again back to the politically unpopular idea of pricing away congestion. As much as people criticize it as regressive, I believe that’s where we’re headed.
