Fleet Turnover

The private automobile fleet in the US turns over very slowly. This is because as capital, it is not used most of the time, and thus wears out slowly. If instead of 250 million vehicles operating 1 hour a day, suppose we had 125 million vehicles operating 2 hours per day, or 62.5 million vehicles operating 4 hours per day. Our vehicles would be replaced 4 times as often (assuming they wear out with usage), and the average age of vehicles on the road would be under 3 years instead of 11.4 years. I have had 7 (different generations of) cell phones in the past 11.4 years.

We (as both individuals and society) want a newer fleet because newer cars:

  • are more fuel efficient,
  • pollute less (both because they use less energy and because they have better pollution control),
  • are safer,
  • have better user interfaces (we hope) and are more in-sync with changes in information technologies.

We (as a society) want fewer cars because that:

  • requires less parking, and
  • makes driving less likely.

This efficient use of capital (keeping vehicles in motion 24/7) is a hallmark of large, expensive fleets like shipping, airlines, railroads, and to a lesser extent trucks.

Instead of paying a fixed cost of ownership once (independent of use), and a variable cost that includes only fuel and time, the cost of car usage would include paying for the fixed cost of ownership on a per trip basis. This would significantly raise the out-of-pocket cost of driving, and discourage it, but also make driving better. But it might also lower the total cost of transportation, since individuals would no longer have so much capital tied up in vehicles, and would drive more efficient cars, less often. This is independent of, and multiplicative with, any reductions in vehicle use that could arise with increased ride-sharing enabled by logging your planned trips in advance.

We can achieve this with Cloud Commuting, Car sharing where the vehicle comes to you. But even before the halcyon days of driverless cars lift up humanity from the need to be ever alert while traveling, ubiquitous car sharing where the vehicles are omnipresent instead of rare would make this much more feasible even in medium density suburbs.

Car sharing has strong network effects. I am more likely to use car sharing if my neighbors use it, since that makes it more likely there will be a car in front of my house, my workplace, my shop, or wherever, when I want it. A reduction in vehicle access time from 10 minutes to 5 minutes, or 5 minutes to 2 minutes is very significant, especially when most trips are only 20 minutes long. As with any social network, it is not clear in advance which if any will take off. As with many networks, there needs to be a large up-front capital investment. But unlike transit systems, car-sharing is dealing mostly with mobile capital. If the program doesn’t work in place A, cars can be redeployed to place B, or at worst, sold in a used car lot.

So the economics of sharing makes sense, but the sociology of sharing is still unclear. People will share hotel rooms, or bikes, or library books, but not many other goods (or historically cars). How do cars get transformed from an owned good to a rented service? In part this is generational. If you have never owned a car, new habits can be formed. But that type of change is very slow. Early adopters and the carless may be quick to join. Some use their cars often enough, in places remote enough, or customize their cars sufficiently that carsharing will not be advantageous. Where is the threshold? I am on record as a skeptic (even if it is a good idea). The Car2Go model (of which I am a member, but which I have yet to use), which recently invaded Minneapolis, where the cars can be left in on-street parking rather than returned to the base seems progress, maybe they will put in enough capital so there is a car waiting for me on every block. But there are a lot of blocks in Minneapolis (1100 miles, I estimate some 11000 block faces), so moving from 212 cars to some 10000 (as a rough approximation of where it needs to be so I don’t have to walk more than a block to find one) is a 50-fold expansion. While reviews are favorable, finding one of 212 cars on 1100 miles of street is not going to be a dominant mode. (or roughly 4 per square mile in the city, meaning roughly a 1/4 – 1/2 mile walk to get one, which of course varies depending on where in the city you are).

The required 50-fold upscaling to make carsharing approximately block-level is non-trivial (10000 cars at ~ $10000 each is $100,000,000 (still well less than a Vikings Stadium, or on the order of a single Streetcar line!)). But 10000 cars is less than several hundred thousand registered in Minneapolis, and could replace many of them.