The Good, the Bad and the Ugly: How to Plan for a Driverless Future

 An edited transcript of the conversation follows.

Knowledge@Wharton: What will the world be like when autonomous vehicles are everywhere?

Samuel I. Schwartz: It will be a revolution in how we move about. It could be good, it could be bad, it could be ugly. It really depends upon the models that we follow going forward. In 90% of the United States, our public transportation is in a sorry state. We could offer a lot more public transportation through autonomous vehicles. That’s one positive kind of outcome.

The negative outcome could be if we just don’t change our behavior. Everybody is traveling by autonomous vehicles, and they take the car to work, tell the car to go home, and then pick them up at the end of the day. You double the amount of miles. Another possible outcome is that people live farther away, and we encourage sprawl and intrude upon what remaining rural areas that we have. We turn them into exurbias. Inactivity could rise a great deal, and that means certain kinds of diseases like diabetes and heart disease and even cancers.

Loads of jobs will disappear. It’s no secret what Uber’s model is. They offer a service that a lot of people are signing up for, and they have been able to subsidize that service with low fares. Ultimately, their plan is to get rid of the most costly part of that, which is the driver. So, Uber drivers will be out of jobs. Taxi drivers out of jobs. Truck drivers out of jobs. Many transit jobs will disappear. This will be nothing short of a revolution in the way we live, not unlike 120 years ago when the car first came on the scene.

Knowledge@Wharton: It sounds like there are a lot of negatives.

Schwartz: I’m really worried about the negatives. We’re hyping the fact that there will be fewer traffic deaths, and that’s true. But we could achieve a lot fewer traffic deaths by many of the devices that will be in autonomous vehicles, such as automatic braking, collision-avoidance systems, blind-spot monitoring and lane controls. We could save lives right now. But that seems to be the impetus for autonomous vehicles.

“If we’re stupid, what we will do is just add more and more lanes.”

On the other hand, there’s been an epidemic of obesity in the United States, and that obesity is taking its toll in an increasing rate of people dying from diseases like diabetes, heart disease, cancer and others. Worldwide, more people die from inactivity diseases than from traffic crashes. Too many die from traffic crashes — 1.3 million — but five million from inactivity. Going forward we have to weigh all these things.

Knowledge@Wharton: City and state governments have to do an exorbitant level of planning to be prepared for these changes, correct?

Schwartz:  Exactly, and I’m quite fearful. Whether it’s Philadelphia or New York or San Francisco or Denver, cities are becoming more and more vibrant over the last 20 years. A lot has to do with the millennial populations moving in — people who want to not necessarily rely on an automobile. They want to walk more, bike more, more active transportation. We can undo all that with autonomous vehicles.

The autonomous vehicles will not work well with pedestrians. Nobody has figured out how to determine what a pedestrian will do. A fear that I have is, ultimately, the autonomous vehicles industry, which could be the most powerful industry we’ve ever seen, will dictate, as the automobile dictated 100 years ago when it criminalized what humans had done for hundreds of thousands of years. And that’s walk in any direction they want, whenever they want.

Knowledge@Wharton: Will public transit agencies, such as the Southeastern Pennsylvania Transportation Authority (SEPTA) here in Philadelphia, invest in autonomous vehicles to replace traditional buses?

Schwartz: If SEPTA and other organizations are smart, they would begin the process right now, and they would work with the unions to ensure that jobs are protected. Maybe not jobs as bus drivers but maintaining the systems. One of the problems that we have in just about every public transportation is that we have one or two types of buses, and they tend to be too big for many routes. There are too few people on those routes. Imagine if we can go with micro-transit — small buses that have triple the frequency of the existing buses because you don’t have those additional costs of labor associated with it. But you still have about the same number of people working because they’re now working in the technology portion of the industry.

I think it’s really important for transit not to be left out. There is a movement that says we do not need public transportation anymore with autonomous vehicles because cars could follow each other so closely, and we can call those “road trains.” That’s all hype. They don’t even come close to the capacity of a real good, solid bus service or a train line. But I’m afraid public transportation unions and others may very well fight this. And they’ll be on the losing end, ultimately.

Knowledge@Wharton: Let’s switch to infrastructure. How will roads be impacted in general by more driverless vehicles?

Schwartz: Again, it comes down to, are we going to be smart about it? If we’re smart about it, we can accept the fact that an autonomous vehicle doesn’t veer or sway as much as a driver does. That means we can make very narrow lanes, and these vehicles can remain in those lanes. That means less infrastructure is needed. On the New Jersey Turnpike, those lanes are 12 feet wide. That’s 36 feet. You could probably get three lanes for autonomous cars for 21 feet — three 7-foot lanes. So, you could save on infrastructure and abandon maintaining some of that infrastructure. You could plant on the infrastructure. You don’t need as much parking infrastructure that we have all over the place right now. You could save on that.

If we’re stupid, what we will do is just add more and more lanes. We’ll add more and more capacity to these highways, move more and more vehicles, then dump them onto the streets of Philadelphia or Boston or New York, which can’t accept it as quickly. There’s an opportunity here. Let’s seize that opportunity and have less infrastructure doing a more efficient job.

“You could do everything in your car. You never need to leave it.”

Knowledge@Wharton: How will land use change because of AV?

Schwartz: If you flew over any city today in the United States, what you would see is a huge chunk — maybe 20% or 30% or 40% — dedicated to parking. You’re not going to need parking. You’re going to see sharp reductions. We’re already seeing it with Uber and Lyft and Via and Juno and Gett and others. A lot of the models show that there will be more and more shared vehicles. There will be more and more fleets that are offering services so that people don’t need cars to park. When they’re dropping you off, those cars will go to some other location and not to a parking lot.

This is a revolution in land use. Imagine a city like Atlanta, which has parking lot, building, parking lot, building, parking garage, building. Suddenly, each one of those that separates the buildings could become something else – another building, a residential building, mixed-use. It could become a park. This is probably the greatest release of property that we have ever seen since we acquired the West.

Knowledge@Wharton: That could be troubling for the real estate industry.

Schwartz: It’s going to be turbulent. It’s already being turbulent. It’s already being felt at airports around the country, again with Uber and Lyft. Airports in general make their most money out of parking. Airport after airport is reporting a diminution in the number of people parking and in the revenue for parking. It’s now into the double-digit reductions, so it’s getting to be pretty serious.

We’re going to see the same thing with people who own parking lots and garages all around the country, in cities mainly. It hasn’t hit rural areas. It hasn’t hit suburban areas as much. But ultimately, it will.

Knowledge@Wharton: But if we’re going to take parking lots in the middle of urban areas and turn them into mixed-use or residential, we’re going to need to add infrastructure — sewage and water and electric — for all those buildings. I don’t think we have the current zoning laws to allow the double population density. How does that factor into what you’ve saying?

Schwartz: That’s what cities have to start thinking about. A lot of these will end up being fallow properties or bankrupt properties. Obviously, you don’t want something like that. If developers are going to see an opportunity there, they should be paying for the infrastructure, as a lot of local governments already require.

This is a radical change. It could affect density in two ways: it fills in and creates higher density in certain urban areas, which allows perhaps more walking and biking, and other forms of efficient transportation; or it could change our land use patterns in which people live much, much farther out because driving is no longer a hassle. Spending an hour and a half in a car could be a very productive. You’ll be able to sleep in your car. You’ll be able to work in your car. You’ll be able to have a romantic dinner in your car. You could do everything in your car. You never need to leave it.

Knowledge@Wharton: Is this the death knell for the taxi industry?

Schwartz: The taxi industry should seize the moment, should look at the Uber model. The taxi industry as we know it, with a driver behind the wheel, is just not going to be able to compete in the same numbers that they always have. They’re already suffering. There’s been a drop, for example, in the value of a taxi medallion in New York City from well over $1 million to between $200,000 and $300,000. And that’s even if you can get somebody to finance that, which nobody seems to be able to do.

It could be a death knell for the taxi industry as we know it. It could be that a new industry called robo-taxis could arise from that. Maybe people could transfer their medallions into the robo-taxis, so they get first rights over taxi services with automated vehicles.

Knowledge@Wharton: You talked about the implications for pedestrians. How does that apply to drivers who still choose to drive themselves? Will they face the same regulations and restrictions?

Schwartz:  Great question. We’re going to have conventional cars on the road with autonomous vehicles. It’s not unlike 100 years ago, when we had horses and the automobile on the roads, and it was a particularly chaotic period. It was the most deadly period on America’s roads. Right now, the federal government is saying it will never outlaw driving. I believe by the second half of this century, that will happen in countries other than the United States. I don’t think it will happen here. But I don’t think it’s going to change any of the rules regarding pedestrians for the conventional driver.

“Think of the autonomous vehicle as just being a computer on wheels. Think of how many times your computer does something that it wasn’t supposed to do.”

There may be rules that are set for the autonomous vehicle having to have certain devices, the ability to communicate directly with pedestrians. The autonomous vehicle industry would love to put the burden totally on the pedestrians because they can’t figure it out. Some researchers have come up with devices that pedestrians would have to wear. My fear is that the autonomous vehicle industry will insist upon sensors on sidewalks with cattle chutes where pedestrians are allowed to cross. Sounds outrageous, but outrageous things have happened in the past.

For conventional drivers, I see no changes in the immediate future. For the long-term future, this is a problem that needs to be tackled in a smart way, and I’m always afraid we’ll take the other choice.

Knowledge@Wharton: Can you outline how the auto industry will change, including the repair industry?

Schwartz: One of the models coming forward is that the auto industry no longer predominantly sells automobiles but sells rides. For that to happen, it means that there will be far more fleets. It’ll be kind of like the Uber of today, except without a driver that will show up. There will be these fleets that could be maintained at central locations. Therefore, all these gas stations, all these mechanics, dealerships may very well be out of jobs because all of it could be centralized at just a handful of locations operated by whatever the automobile/AV industry creates.

So, there is a great fear. If we go the other way and there is individual ownership of cars, which is one possible scenario, then we’ll still see some kind of maintenance. But it may become more difficult to insure your autonomous vehicle than it will be for a fleet to insure an autonomous vehicle. That’s because of the technology that needs to be very well maintained, and I’m not sure individuals will have the patience to regularly do that.

Think of the autonomous vehicle as just being a computer on wheels. Think of how many times your computer does something that it wasn’t supposed to do. You have to reboot it. Well, those things are going to happen. Multiply that by 300 million people who will have computers on wheels, how many times you have to call somebody to service it because it’s going a little bit haywire, or the number of times that it’s hacked. You do need really good maintenance of these computers on these vehicles, and it’s not clear that individuals will have as much capability as fleets will. That’s why we may lean towards fleet maintenance.

Knowledge@Wharton: Wouldn’t delivery services like FedEx or UPS or Uber Eats benefit greatly from this?

Schwartz: Yes. The probable early uses of autonomous vehicles are for the long-haul trucking. Trucking that’s going coast to coast right now requires a driver, requires that driver to get rest. That vehicle can drive without stopping. It may have to stop for some fueling, but it doesn’t have to stop to eat, it doesn’t have to stop to sleep. It may need a driver to meet it at a certain destination, but for 3,000 miles, it could drive by itself. That’ll be one of the first uses that we see.