Transport promises reveal politicians asleep at the wheel

Buses and trains may also become self-driving.

OPINION: This year’s general election is notable for many things, including the massive promises being made by both major parties to fund new transport infrastructure.

National has come up with a notional $10.5 billion plan for new highways while Labour is splashing cash for investments in new passenger rail services – both light and heavy rail.

Yet both parties are in danger of planning transport solutions that risk obsolescence in the time it takes to construct them.

That was the implication of an eye-popping presentation in Wellington this week from Catherine Wood, the New Yorkbased founder of Ark Investment Management, a new-era managed fund that focuses solely on disruptive technologies.

Ark is owned 16 per cent by Nikko Asset Management, which has a large but little-known New Zealand operation.

Wood outlined a future for both private and public transport that will have far less to do with tarmac and railway lines than with software, and in far less time than most of us think.

As a result, Wood is more interested in investing in companies such as NVIDIA, a world leader in the graphics processing units (GPUs) that will steer self-driving vehicles, than in the producers of the vehicles themselves.

She sees global autonomous vehicle sales figures peaking in the mid-2020s while revenues from the emerging ‘‘mobility as a service’’ industry explode.

‘‘Autonomous vehicles will have higher utilisation rates than personally driven cars, lowering the number of required vehicles on the road despite an expanded total passenger base and increased perperson miles,’’ Ark believes.

The average privately owned car today is used just 5 per cent of the time. Letting someone else own that expensive hardware could be the norm in developed countries within 15 years.

That’s bad news for Wilson Parking but good news for households no longer required to shell out capital for a vehicle they regard as essential but barely use.

Of course, each of those journeys in an unowned, selfdriving vehicle will have to be paid for, much like a bus fare today. Indeed, buses and trains may also become self-driving.

Here again, however, Ark sees a collapsing cost curve. Using an example from the United States, Wood showed forecasts that a US$65 (NZ$90) taxi fare from New York’s LaGuardia Airport to downtown Manhattan could drop to as little as US$6.50 in an autonomous vehicle.

On top of this, Ark expects most new vehicles will be electricpowered by the mid-2020s.

Then add in the power of deep and machine-learning software on the management of traffic flows on existing roads, when coupled with an increasingly autonomous vehicle fleet.

Instead of the usual crush of impatient individuals all trying to beat each other to work at the same time of day, digitally controlled traffic flows can credibly be expected to make whole cities ‘‘merge like a zip’’, unchoking bottlenecks, improving travel times and conceivably ending the phenomenon of road rage. After all, it’s hard to get angry if you can literally be asleep at the wheel.

These efficiencies will flow through quickly to infrastructure needs. Self-driving cars will still need roads, but their more efficient flows should slow the need for new road construction.

And if this all sounds a bit pie in the sky, ask yourself this: Who expected 20 years ago to be able to make phone calls for free to people on the other side of the world, or never to post a letter again?

The digital revolution in telecommunications is coming to transport, and almost certainly sooner than we imagine. –BusinessDesk