On Car Ownership And The Future Of Transportation

I’m 30 years old. I had owned a car for ten of those years, and had access to cars for half of my life, driving my mom’s car on a dacha since I was 14. Few months back, I decided to get rid of my car, and so for the last four months, for the first time in more than 10 years, I have been living without car.

I have been thinking a lot what it means; how having a car defines our freedom of mobility. There has been a lot written on this topic, but I have something to add from a perspective of a fairly young urban dweller.


First, the monetary issue. Having a car meant a slew of expenses: financing, parking, maintenance, gas, taxes, depreciation. All in all, I was out a considerable sum of money each month — around $1700 in direct payments, plus an estimated $700 in monthly depreciation. That’s $2400 for a car that was sitting, on average, 98% in a garage. My usage was way below the norm, but even the usage of a regular car is about 5% of it’s useful utilization, meaning it’s sitting somewhere for 95% of the time, losing value.

Secondly, as an urban dweller, owning a car doesn’t mean I use it exclusively — it is substituted and complemented with other modes of transportation. In my case, that’s bicycle, motorcycle, walking, uber, and public transit. Only one mode of transportation, my car, was way outweighing the others in cost, which simply didn’t make sense.

Thirdly, being in a startup tech environment, I had a cognitive dissonance between reading all the articles about autonomous self driving cars and driving an almost brand new car that was lacking all of this wizardry. I subconsciously wanted to live in the future where cars drive themselves and can drive around making me money when I don’t need it.


Autonomous Advantage

There’s strong motivation from tech companies — Google, Uber, Tesla, and now Lyft and GM — to introduce and move autonomous cars into production as soon as possible. Most likely, in a fully autonomous sense, we’ll first see commercial interstate trucks, then city delivery trucks, then autonomous taxis being introduced in the cities.

Autonomous taxis, by one estimate, are 8 times less expensive than regular taxis, but I tend to think it’s actually understated a bit, since robotic taxis won’t need to stop, can run on electricity, can function as Uber Pool (carpooling by picking few passengers at once), and thus optimize their utility to almost 100%.

For urban citizens it would mean that instead of owning a $40,000–60,000 parking spot (not counting the car, depreciation, taxes, etc), one can drive 22,850 kilometres in a regular taxi on the lower end of the estimate (at $1.75/km; prices in Canadian dollars, in Toronto), or 182,800 km in a autonomous taxi, assuming 8x reduction in price. With average trip in the city being lower than in suburbs, and with my personal average of just 8000km/year in a car, instead of owning a parking spot, I can take taxi for 22 years before it becomes more expensive than owning a parking spot in downtown Toronto.

Of course the math in my case is not precise, so you are welcome to complete your calculations, but what technology does best is to make 10x shifts in industries that were once considered invincible and stable.


Cities of the Future

With the shift towards electric robot taxis, the cities will change a lot, too. No more traffic jams, since all cars will be connected and would know the best route or the best time to leave: “Tim, leave in 15 minutes and save 10 minutes on your commute”.

No more need for excessive parking in the city, since private car ownership levels will start dropping dramatically in the city, and robot taxis won’t need parking space. Hopefully this would mean more pedestrian areas and more boulevards in the cities.

New condos will be build with no or minimum underground parking, a major cost and a major hurdle in sunk time to build condominiums — some estimate that underground parking costs more to build that it’s sold at, meaning rest of residents end up paying for city policies that require a minimum amount of parking stalls. As a result, condo construction costs might fall 10–15% simply by eliminating the need for the parking.

Would private cars remain on the roads? Absolutely. Like Elon Musk said, “[owning a regular car] will be like owning a horse. You will only be owning it for sentimental reasons”. Still, rich people own horses — and likewise, rich in the West will keep their Porsches, Maseratis, and Ferraris.

And obviously, while urbanized West will ditch their cars, rest of the world would probably keep enjoying their gas-powered human-operated apparatuses for many more years, mostly because for Russian or Chinese, owning a car is a status symbol, even if you are stuck in a traffic jam for hours, and a lot of cultural values in these countries have to evolve to change this sentiment.

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