The report, titled "Rethinking Transportation 2020-2030: The Disruption of Transportation and the Collapse of the Internal-Combustion Vehicle and Oil Industries," argues that transportation-as-a-service (TaaS) will disrupt current modes much more quickly than traditional analysts have forecast. The report posits that the confluence of technological leaps forward in artificial intelligence and electric vehicles will produce a mass migration to self-driving electric cars by 2030. In the main, it contends, these cars will be owned not by individuals but by fleet operators. Individuals will buy subscriptions in much the way they buy wireless communication plans today.
Economics will drive the mass migration, the report's authors argue. "Using TaaS, the average American family will save more than $5,600 per year in transportation costs, equivalent to a wage raise of 10 percent," they write. "This will keep an additional $1 trillion per year in Americans' pockets by 2030, potentially generating the largest infusion of consumer spending in history."
Mainstream analysts have assumed adoption of fully autonomous vehicles will take much longer, despite predictions by entrepreneurs such as Elon Musk that they are just around the corner. The RethinkX authors, James Arbib and Tony Seba, argue that aggregation of massive data troves by companies now pursuing artificial intelligence projects focused on autonomous cars will advance the technology at exponential rather than linear rates. In turn, they say, the consumer adoption curve will resemble that of cell phones or Facebook.
"We are on the cusp of one of the fastest, deepest, most consequential disruptions of transportation in history," the authors write. "By 2030, within 10 years of regulatory approval of autonomous vehicles (AVs), 95 percent of U.S. passenger miles traveled will be served by on-demand autonomous electric vehicles owned by fleets, not individuals . . . . The TaaS disruption will have enormous implications across the transportation and oil industries, decimating entire portions of their value chains, causing oil demand and prices to plummet, and destroying trillions of dollars in investor value — but also creating trillions of dollars in new business opportunities, consumer surplus and GDP growth."
The authors predict that 65 percent of shale oil deposits "would no longer be commercially viable" as prices collapse. Combined with a comparable transition to renewable energy sources for the grid that powers electric vehicles, such a development could have a dramatic effect on greenhouse gas emissions.
It would also suggest an obvious strategy for jurisdictions such as Boulder County trying to resist enormous fracking projects — run out the clock, using every legal avenue at their disposal to challenge the frackers throughout the permitting process. The slow-moving judicial system could go from adversary to ally. If the RethinkX authors are right, oil drillers will lose their economic incentive to pursue these projects somewhere along the way.
The authors believe that the transition to TaaS will also disrupt the automobile industry by drastically reducing the number of vehicles in service.
"As fewer cars travel more miles, the number of passenger vehicles on American roads will drop from 247 million to 44 million, opening up vast tracts of land for other, more productive uses," they write. "Nearly 100 million existing vehicles will be abandoned as they become economically unviable. Demand for new vehicles will plummet: 70 percent fewer passenger cars and trucks will be manufactured each year. This could result in total disruption of the car value chain, with car dealers, maintenance and insurance companies suffering almost complete destruction. Car manufacturers will have options to adapt, either as low-margin, high-volume assemblers of A-EVs, or by becoming TaaS providers. Both strategies will be characterized by high levels of competition, with new entrants from other industries. The value in the sector will be mainly in the vehicle operating systems, computing platforms and the TaaS platforms."
The report also has important implications for transportation planners, many of whom remain wedded to wishful assumptions about adoption of mass transit options in jurisdictions like Boulder County, where population density has been insufficient to support a robust mass transit system and a geographically dispersed housing stock has produced first-mile, last-mile problems that prevented consumer adoption from matching hopeful public-sector projections.
"The role of public transportation authorities (PTA) will change dramatically from owning and managing transportation assets, to managing TaaS providers to ensure equitable, universal access to low-cost transportation," they write. "Many municipalities will see free TaaS as a means to improve citizens' access to jobs, shopping, entertainment, education, health and other services within their communities."
To be sure, the RethinkX scenario depends upon approval and adoption of fully autonomous vehicles on a more rapid timeline than many expect. "Mainstream analysts have produced linear and incremental forecasts that have consistently underplayed the speed and extent of technological disruptions, as in, for example, solar PV and mobile phone adoption forecasts," the authors argue. "By relying on these mainstream forecasts, policy-makers, investors and businesses risk locking in sub-optimal pathways."
In a town with as much high-tech, entrepreneurial talent as Boulder, public officials have plenty of resources as they seek to map future policy. They could start by consulting the Rocky Mountain Institute and Boulder's Canvas Technology. Clinging to old ideological biases could produce massive investments in obsolescence. In an age of rapid change, vision and adaptation will be more useful than ideology and bias.
©2017 the Daily Camera (Boulder, Colo.) Distributed by Tribune Content Agency, LLC.
