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Looking back, like so many of us are wont to do at the end of the Gregorian calendar year, 2018 was a year like so many: ups, downs, struggles and triumphs. It was a very notable year in several ways, many of them unpleasant, but the highlights included a handful of important (and in a couple of cases, absolutely critical) insights about transportation technology. For anyone with a stake in how we move people and things about, these realizations were profound and opened the door to vastly more productive thought on the sector.
The Average Car Only Moves 5% Of The Time
This intuitively obvious fact only implies the actually important statistic: that cars are motionless 95% of the time and are therefore taking up a parking space. Parking represents an astonishing amount of demand for space in our downtown cores. Consider that there is an entire business model in parking garages, where priceless downtown real estate is given over to buildings that serve only to warehouse cars over the short-term. So long as there are private cars, there will be a need for parking spaces, which take up valuable real estate that could be repurposed for green spaces, community centers, or other resources that could make a city more livable. With this understanding, consider what autonomous vehicles (AVs) could mean. When AVs are widely available, private vehicle ownership may become a thing of the past, as commuters are dropped off and the AV continues on to pick up its next rider. This could translate into cars moving 95% of the time, which would cause parking space demand to virtually vanish.
Autonomous Cars Will Cause A Real Estate Shift Of $1 Trillion In The USA Alone
As astonishing as that number sounds, placed in context of a $30 Trillion total valuation of US real estate it seems quite reasonable. This realization supports the idea that the propagation of autonomous road vehicles will reshape our cities in ways we can only barely begin to grasp. The idea is that AVs make commuting much more pleasant (among other benefits), so people would be willing to live further from their place of work. This would trigger a titanic shift of real estate prices, with downtown core real estate dropping in value and outer core real estate coming up in price, creating a wide zone of flatter property values.
The Real Money Is In The Data
While manufacturers of AVs and ride-hailing platforms could make serious coin in the new mobility future, the real money is in the data. Uber realized this and is taking steps to reinvent itself as an “Amazon of Transportation.” Unfortunately for Uber and its competition, monopolies have recently been leaving a very bad taste in people’s mouths, especially the younger generations who grew up surrounded by digital and decentralized economies. Whether Uber and its ilk will be successful remains to be seen, but the point made is entirely valid: urban transportation data is worth an enormous amount, and its value is likely to only increase as transportation options become more sophisticated over time. Understanding how people move and the choices they make on a minute-to-minute basis during their day add up to being able to forecast real demand and find the gaps in which opportunity for new businesses could thrive.
Shared Scooters Break Even In Two Months Or Less
Based on broadly available unit economics (Bird’s have been made public, for one) shared scooters offer and astonishingly short time before break-even. Scooters require a low capital outlay; assuming a fairly average usage rate, and assuming the scooters are operated at a competitive price for the market, each unit could pay for itself in as little as six weeks. From a finance perspective, scooters are a much lower risk investment that most other mobility plays out there, and with the cost of the hardware dropping steadily over time, they should continue to appeal to investors and business owners through the next few years.
Vehicle Autonomy Stops The Constant Injection Of Incompetence
This fairly brutal realization addresses a principle problem when it comes to road safety: as drivers gain experience, they generally become safer, which should improve the accident statistics for any given region. However, there is a constant flow of inexperienced (read “incompetent”) drivers adding to those statistics, which helps spike the accident rates. Autonomous cars should operate as a kind of hive mind, constantly reporting back and receiving updates on traffic conditions and how recent accidents have occurred. This “treating accidents as errors” methodology should improve passenger safety dramatically over time, which would save our communities and households vast sums of money as well as stress and emotional anguish.
The promises of new mobility draw ever-nearer as innovations in transportation technology and business models continue to explode around the globe. The next few years should bring transformations in how we get from point A to point B that will likely be at once fascinating, baffling and exciting. Wait until drones are tied in as well.
December 31, 2018 at 12:53AM
Forbes – Entrepreneurs