The Self-Driving Urban Nirvana Fallacy
“A car for every purse and for every purpose.” — Alfred P. Sloan
Excitement around self-driving cars has reached fever pitch in recent weeks. Between the plethora of new players that are joining the game (it used to be just Google and Mobileye…now it’s Tesla and Intel and Delphi and Volvo and Ford and GM and Lyft…even the City of Boston) combined with the beginnings of the first real-world experiments such as Uber’s in Pittsburgh, it seems like finally we’re on the cusp of letting go of our steering wheels.
Not so fast. As in all hype cycles, we will fall from this current Peak of Inflated Expectations down into the Trough of Disillusionment soon enough, when people realize that self-driving is, well, really really REALLY hard. Google and Apple may have realized it already. Leave it to the Detroit carmakers who haven’t really started writing code to figure out how hard it is.
But it’ll happen. No question that, be it in five years or in ten, technology will gallop along and improve 10x and we will have cars pulling up next to us with no human driver.
What has fascinated me is the widely held expectation that just as soon as self-driving cars show up, we will quickly be transported (pun intended) into an urban nirvana with silent, electric pods ferrying us between dense LEED-certified urban dwellings.
Why?
Perhaps as a result of moving from the world of automotive innovation into the world of real estate innovation in my own career, I’ve thought long and hard about how self-driving cars are actually likely to transform our lives and our resulting real estate patterns. There’ll be less of a need for tons of parking in the middle of the city, to be sure. But many of the other common presumptions about self-driving cars have very little rooted in actual human behavior.
I think the world that self-driving cars will enable will have more self-driving RVs and more self-driving Ford F-150s than those small Google bubble cars. Sure, we can build bumper cars and have them drive us around the city (which, by the way, is a much better way to solve the last 1% problem, by reducing the need for perfect accuracy and focusing on reducing the damage of an accident). But it is much more likely, if history is any guide, that self-driving technology will enable us to live farther apart and own bigger (and more) cars.
Here’s where self-driving cars will likely take us:
We will be living farther apart, not closer together
How long is your commute? If it’s somewhere in the range of 25–30 minutes, consider yourself average. And I don’t just mean average in America today, or average in your city, I mean, average in history.
There’s a pseudo-law discovered by Italian physicist Cesare Marchetti, who studied commuting patterns across history and found that regardless of technological or economic constraints commute times average half an hour each way. Think of your 24 hours/day as your time budget — and Marchetti’s Constant says that you will use an hour of it on commuting to and from work, because you will choose to live as far as is technically feasible and still be on average 30 minutes away. That number doesn’t vary; in fact, the 1994 paper title describes it perfectly: “Anthropological invariants in travel behavior.”
Now, what’s interesting is that this number stays stable whether you’re walking around ancient Athens by foot (at 3 mph), or biking around Copenhagen in 1900 (at 12 mph), or taking the U-Bahn in Berlin in the 1950s (at 30 mph), or driving on the freeway outside Dallas in 1999 (at 70 mph). When technology has afforded us faster speeds and more efficient routes, we have always chosen to live farther, not commute less.
Who says self-driving technology should be any different? Not only will the commuting routes and traffic flows likely be faster and more efficient, but the actual pain of commuting will be significantly reduced. It’s way less stressful to read the morning paper or watch Netflix on the way to work than standing in a crowded train car or driving in bumper-to-bumper traffic. So who knows, maybe you’ll actually choose to live even farther than 30 minutes away? Closer is unlikely. Technology changes, human behavior does not.
We will mainly own these cars, not share them
Uber and Lyft are, unsurprisingly, proponents of the view that car ownership will go away and that self-driving car technology will be synonymous with networks of shared rides. Lyft’s John Zimmer even wrote a recent post called “The Third Transportation Revolution” that boldly claims that “by 2025, private car ownership will all but end.”
But scratch under the surface for a second, and another likely truth emerges. The main cost in car sharing today is not the car — it’s the hourly labor of the driver who drives the car for you. Cars in and of themselves are not terribly expensive. You can lease a decent car for $150–200 a month today. Imagine if that car was self-driving, and you didn’t need parking by your house because it can go park itself somewhere far outside the city, or, hell, just keep driving somewhere in the countryside and wait to be summoned. If that’s the cost, and parking isn’t an issue, why would we share rides? Why wouldn’t we just get our own cars? Leave our crap in the back seat? Keep the child seat in place? Store our bike in our car?
Self driving cars will replace today’s delivery services (in reverse)
Better yet, if you own a car and it’s self-driving and it’s not busy catering to your actual needs and desires in the moment, you can send it on errands!
Think of what happens when you get any of the myriad of delivery services available in major cities now. A human being goes to a restaurant, or to the mail distribution center, or to Costco, or to the dry cleaner, and picks something you want up, and then drives it to you. Guess which part of it self-driving cars can do? Yep, the driving.
So all the delivery services can be run in reverse. Humans (or robots, I guess, someday) can hang out in one place, see a parade of self-driving cars going past the drive-through window, and place the right product or package into each of those. And when you’re ready to go home, your car is waiting to pick you up with your groceries and your dry-cleaning ready to go in your car. Why do we need shared rides, and delivery services, and all these other human labor-enabled businesses that thrive today on venture backed money-losing business models, when we can just own an intelligent car? Because after all, that’s what a self-driving car is, it doesn’t just self-drive when you’re inside, it can drop things off while you’re working and pick things up while you’re sleeping.
Except for food trucks. Definitely can’t wait for the self-driving food trucks.
Not all delivery services will be gone, of course, and not all ride sharing services will be done for. Clearly, there’ll be new possibilities opened up in the self-driving food truck industry once self-driving technology is commonplace. And there will be ride sharing — no question — but I bet the proportion of ‘shared’ cars will be more like the percentage of taxis before.
This is not to say that self driving cars are not going to happen; they will. And it will be a good thing because human drivers are…well…human.
But as was the experience of the automotive industry in the early 1900s, so it will likely be in the 2000s: from a single Model T that created the market at first came a Cambrian explosion of cars that Alfred Sloan’s GM capitalized on with the “car for every purse and every purpose” strategy.
Cities will be transformed, but they will be transformed in a different way than is often expected. The green, walkable, urban nirvana might only be a part of the story. There’ll likely be ‘dead zones’ of parking lots and warehouses and depots for self-driving cars to visit and pick things up at, vast hellish areas of little human habitation. And at the same time there will be areas for productive working, and areas for pleasant living, that can be placed a much farther distance apart than before. Because the self-driving cars can whisk us farther and more efficiently and more comfortably than we can drive ourselves — giving us new land for what we define as the livable frontier.
Alfred P. Sloan famously ended a senior management meeting at GM with the following words:
“Gentlemen, I take it we are all in complete agreement on the decision here. I propose we postpone further discussion of this matter until the next meeting to give ourselves time to develop disagreement, and perhaps gain some understanding of what the decision is all about.”
Self-driving product teams will do well to heed Sloan’s advice and develop products other than the small, urban, shared-ride self-driving car — and they will be more successful because these will be the cars the other 99% will want to buy.
