End of road for car own­er­ship?

San Francisco Chronicle Late Edition - - OPINION - By Tony Seba and James Ar­bib

Ahis­toric photo taken on Easter Sun­day, 1900, shows a street filled with horse-drawn car­riages. If you look very care­fully, you can pick out a soli­tary au­to­mo­bile. A photo of Easter 1913 shows the same New York Fifth Av­enue scene packed with cars. If you look very care­fully, you can pick out a soli­tary horse.

That’s dis­rup­tion: New tech­nolo­gies cre­ate a new mar­ket and trans­form ex­ist­ing in­dus­tries in the blink of an eye.

We face a rapid dis­rup­tion of trans­porta­tion today that could end more than a cen­tury of in­di­vid­ual own­er­ship of the gas-pow­ered ve­hi­cle that dis­rupted the horse. This dis­rup­tion will re­shape the ur­ban land­scape and the world’s en­ergy econ­omy and bring huge ben­e­fits — eco­nom­i­cally, so­cially and en­vi­ron­men­tally — if pol­icy de­ci­sions are well-in­formed.

“Re­think­ing Trans­porta­tion,” the first re­port from in­de­pen­dent think tank Re­thinkX, finds that within 10 years of wide­spread reg­u­la­tory ap­proval of driver­less ve­hi­cles — which we an­tic­i­pate in 2021 — 95 per­cent of U.S. pas­sen­ger miles trav­eled will be served by on-de­mand, au­ton­o­mous elec­tric ve­hi­cles owned by com­pa­nies pro­vid­ing trans­port as a ser­vice. That trans­porta­tion will be four to 10 times cheaper per mile than op­er­at­ing a new or ex­ist­ing ve­hi­cle.

This will re­shape the econ­omy. Eco­nomics will drive this dis­rup­tion, but how these changes play out de­pends on the de­ci­sions we make today.

Trans­porta­tion dis­rup­tion will mean: Cost per mile will be­come the key met­ric in trans­porta­tion. The big­gest sav­ing comes from the ex­tended life of an elec­tric ve­hi­cle, which can eas­ily travel more than 500,000 miles, and will cost 70 per­cent less to fuel and 80 per­cent less to main­tain. Sav­ings of a min­i­mum of $5,600 per year per av­er­age Amer­i­can house­hold will add $1 tril­lion to the an­nual dis­pos­able in­come of U.S. house­holds, the sin­gle largest eco­nomic boost in U.S. his­tory. We fore­see an­other $1 tril­lion in pro­duc­tiv­ity gains as peo­ple work, study or shop in­stead of wast­ing time be­hind the wheel. There will be 80 per­cent fewer pas­sen­ger ve­hi­cles on U.S. roads by 2030, free­ing up enor­mous space in cities. Un­prece­dented lev­els of mo­bil­ity will be en­joyed by the dis­abled, the el­derly, the young and low-in­come peo­ple.

But just as new for­tunes will be made, oth­ers will be lost: Car deal­ers, garages and auto in­sur­ance com­pa­nies will suf­fer. Driv­ing jobs will dis­ap­pear. Au­tomak­ers will have to morph into low-mar­gin, high-vol­ume as­sem­blers of au­ton­o­mous elec­tric ve­hi­cles, or get into the busi­ness of selling the trans­porta­tion ser­vice di­rectly. Oil de­mand will col­lapse and high-cost oil­fields and in­fra­struc­ture projects won’t sur­vive.

In prepar­ing for this fu­ture, it is vi­tal that we re­di­rect in­vest­ments away from in­fra­struc­ture that as­sumes busi­ness as usual — and on this tax­pay­ers must be vig­i­lant.

Be­cause job loss due to au­to­ma­tion has fueled pow­er­ful pop­ulist anger through­out his­tory, in­cum­bent in­dus­tries could take ad­van­tage of this anger to pres­sure pol­i­cy­mak­ers into rais­ing bar­ri­ers to this tech­nol­ogy. Such poli­cies would make ev­ery­one poorer and the econ­omy un­com­pet­i­tive as a re­sult.

Cal­i­for­nia should con­sider al­ter­na­tives to gas-tax fund­ing for trans­porta­tion in­fra­struc­ture. Plan­ners should stop spend­ing tax­payer money build­ing park­ing in­fra­struc­ture and elim­i­nate min­i­mum park­ing re­quire­ments for res­i­den­tial and com­mer­cial de­vel­op­ments.

City plan­ners, com­mu­nity lead­ers and cit­i­zens should plan for what our cities will be­come in 10 years and work to re­duce bar­ri­ers to trans­port as a ser­vice. This in­cludes en­abling au­ton­o­mous pi­lot pro­grams, re­quir­ing trans­port com­pa­nies to pro­vide open data about traf­fic and safety, and ed­u­cat­ing the public about the fi­nan­cial, so­cial and health ben­e­fits that will ac­crue to ev­ery res­i­dent, in­clud­ing un­der­served com­mu­ni­ties. Pol­i­cy­mak­ers can mit­i­gate the fall-out from job losses by pro­vid­ing safety nets, in­clud­ing job-re­train­ing pro­grams and in­come and health care in­sur­ance sup­port.

In San Francisco, 63.4 mil­lion square feet of park­ing space will be­come va­cant. What por­tion should we al­lo­cate to green parks, af­ford­able hous­ing or new busi­nesses? If we make the right de­ci­sions today, then we have a once-in-a-life­time op­por­tu­nity to turn vi­sions for our city’s fu­ture into re­al­ity.

It may seem im­prob­a­ble that these vast changes will oc­cur in a decade — but tech­nol­ogy dis­rup­tions with such over­whelm­ing cost sav­ings to both in­di­vid­u­als and so­ci­ety hap­pen very quickly. With proper plan­ning, we can har­ness the enor­mous po­ten­tial of this dis­rup­tion in a man­ner that cre­ates wealth, health and sta­bil­ity for so­ci­ety. The fu­ture is upon us and the time to choose is now. En­tre­pre­neur Tony Seba of San Francisco and in­vestor James Ar­bib of Lon­don are co-founders of Re­thinkX, an in­de­pen­dent think tank that an­a­lyzes and fore­casts the speed and scale of tech­nol­ogy-driven dis­rup­tion and its im­pli­ca­tions across so­ci­ety.

Library of Congress pho­tos

Above: Horse-drawn car­riages trans­port peo­ple on New York’s Fifth Av­enue on Easter Sun­day, 1900. Left: By Easter 1913, cars had sup­planted car­riages.

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