This is the first part in a series of stories that will be published in the coming months on the impact of technology on specific industries in the Santa Clarita Valley.
The era of the car as we have known it is coming to an end. Sure, we’ll still use them, but over the coming decade, they’ll keep getting smarter, will more likely than not be electric, and will be a service we share rather than an asset we own.
If it sounds a little foreign, take comfort in the fact that our forebears thrived through earlier transportation revolutions. Newhall and Saugus started as rail stations; Valencia and the Santa Clarita Valley we drive across today were built around cars and the freeways that serve them.
Within the next decade, the shift to networked autonomous vehicles will kick into high gear. Even sooner, look for changes in long-haul trucking, which currently employs 1.7 million Americans as drivers and supports a vast support network. That shift will likely first take the form of platooned trucks, still under the control of professional drivers.
The impending mobility revolution will have ripple effects across industries (see sidebar below), with the most dramatic related to how we use, store and maintain our vehicles. Shared cars that drive themselves to remote storage lots or to the next call on their schedule don’t require vast parking lots, or garages in every home.
In a newer city like Santa Clarita, this change alone raises land-use questions for scores of acres of land in every part of the community.
At the SCV Economic Development Corp.’s 2017 Outlook Conference, Todd Bauer, a partner in the San Francisco office of consulting firm Deloitte, discussed the impact of what he called “the new mobility ecosystem” on commercial real estate.
He highlighted four trends, and put them in the form of questions that await the ebb and flow of economic and political forces for answers. All have implications here in the SCV, where new construction and major developments are in the pipeline.
- According to Bauer, the trend toward shared autonomous mobility may create more flexibility in where people live, work, and play. What are the implications for the design of mixed-use developments?
- How will urbanization shifts be shaped by decreased traffic, enriched in-vehicle experiences, and greater access for non-drivers to regions without mass transit?
- As demand for urban parking declines, how will commercial real estate owners find productive ways to repurpose their space? What alternate uses should real estate developers and urban planners consider?
- Will networks of autonomous vehicles change the attractiveness of residual/ commercial real estate locations? How might the value of these assets evolve?
While proponents of automated cars predict a safer transportation system with far fewer accidents, that’s by no means assured. For example, what happens if software vulnerabilities make it possible to override a vehicle’s guidance system? It’s already happened.
In 2015, Chrysler had to recall 1.4 million vehicles to update security features after hackers Charlie Miller and Chris Valasek took control of a Jeep Cherokee driven by Wired senior writer Andy Greenberg. They did so while sitting on a couch miles away from the Jeep.
More benign frustrations await us as well. Think of an office building near the interstate. Instead of workers filling the parking lot each morning, they arrive in a parade of shared autonomous cars. Without road-design changes, drop-off lines will snake back onto streets and traffic snarls will spread.
How soon will things change? The safe bet might be on faster rather than slower. Recall just ten years ago, in January 2007, when Steve Jobs introduced the iPhone, then-CEO of Microsoft Steve Ballmer boldly and quite wrongly predicted that “there is no chance that the iPhone is going to get any significant market share. No chance.”
So we shouldn’t dismiss aggressive predictions like those contained in “Clean Disruption of Energy and Transportation,” a new report from RethinkX, a think tank in San Francisco.
“We are on the cusp of one of the fastest, deepest, most consequential disruptions of transportation in history,” said Tony Seba, co-founder of the group. “But there is nothing magical about it. This is driven by the economics.”
One important caveat in the report is that this disruption won’t happen until state and local governments give regulatory permission for driverless cars to share the roads. To date, results on that front have been uneven.
Last summer, after the driver of a semi-autonomous Tesla was killed in an accident, Missouri Gov. Jay Nixon vetoed a bill that would have set up a six-year pilot program testing the safety and fuel-saving potential of platooning long-haul trucks.
Platooning technology uses wireless connections and radar to synchronize the braking and acceleration of two trucks, with less than 50 feet separating them. Today, 300 feet of separation are required
Nixon agreed that automated driving technology has made strides in recent years, but said the “long-term safety and reliability of this technology remains unproven.”
California has approved 30 companies to test self-driving cars on public roads and has proposed rules to allow fully autonomous vehicles as soon as later this year.
Once the rules of the driverless road are set, purely economic considerations will provide all the incentives we need to start thinking of cars as a service we share rather than an asset we own or lease.
In the RethinkX report, Seba cited four areas where using transportation as a service (TaaS) will be cheaper than owning a car:
- Using TaaS will be four to 10 times cheaper per mile than buying a new car, and two to four times cheaper than operating an existing paid-off vehicle, by 2021.
- The cost of TaaS will be driven down by several factors, including utilization rates that are 10 times higher; electric vehicle lifetimes exceeding 500,000 miles; and far lower maintenance, energy, finance and insurance costs.
- The average American household will save $5,600 per year by giving up its gas-powered car and traveling by autonomous, electric TaaS vehicles.
- These cost savings will drive both potential new car buyers and existing owners to abandon vehicle ownership and move to TaaS.
“While these projections may seem radical because they differ from mainstream and incumbent industry projections, they are really quite conservative because they are based on assumptions that in some cases have already been bested by new technologies and plummeting prices,” said Bryan Hansel, CEO of Chanje Energy, a Burlingame-based distributor of electric vehicles.
In Santa Clarita, where griping about traffic on the Five is close to a civic virtue, the prospect of connected vehicles could represent as big a shift as the transition to shared vehicles, and big rigs could lead the way.
Peloton Technologies links the active safety systems of pairs of trucks, and connects them to a cloud-based network operations center that limits platooning to appropriate roads and conditions. Peloton incorporates forward collision-avoidance systems and other safety features that are active both in and out of platoon.
In April, Peloton closed on $60 million in financing from an array of tech companies, truck manufacturers and venture capital funds.
That’s a significant investment, and yet it’s less than 10 percent of the $750 million invested in driverless car technology in the first quarter of 2017, according to market analysts CB Insights. So while the timing and details of the mobility revolution remain fuzzy, one thing is clear: the train has left the station, and it’s headed our way.