Executive Summary

The next two decades will see more change in the transportation sector than have been seen in 100 years. The introduction of autonomous vehicles, from a few cars initially, to all new cars, to eventually all cars will radically change how transportation is used. The concomitant electrification of vehicles will provide further opportunities to better optimize the use of transportation systems. Finally, continuing advances in information and mobile communications technology will up-end the way people think about transportation systems. This report explores in eight chapters the changes that are coming.

Fully autonomous test vehicles from automakers and new entrants like Google have traveled in general traffic over 1 million miles collectively. Semi-autonomous vehicles are already here. Tesla auto-pilot (available in about 100,000 cars), for instance, can both keep lanes and follow the car in front, in addition to automatically changing lanes with direction from the driver. Tesla cars drive over 1 million miles per day nationally, though the amount of that in semi-autonomous mode is proprietary. The transition from human driven vehicles to fully autonomous vehicles is tricky. Some automakers believe that incremental transition is viable. Others note the danger of semi- autonomous vehicles that require periodic human intervention, and argue instead for step-jump to fully autonomous vehicles. The impacts described below are associated with fully autonomous vehicles (no driver control).

We anticipate the following timeline for the deployment of fully autonomous vehicles (Chapter 1):

• 2020 market availability,
• 2030 regulatory requirement for all new cars,
• 2040 prohibition of non-autonomous vehicles from public roads at most times.

The consequences of fully autonomous vehicles are numerous. Some of the more important ones are listed below and discussed more fully in the report.

 

• Increased safety overall as driverless cars don’t get tired and have better sensors and algorithms than humans. If driverless cars are not significantly safer, they will not be permitted. Total fatalities may drop over 90% with driverless vehicles as human error is eliminated. No system can be perfectly safe, but it will be significantly safer. Road designs and sight-lines will be far less relevant than design criteria as a result.
• An explosion of vehicle forms, including new, narrow, single-passenger vehicles, which will be safer than motorcycles given their automated drivers and new structural designs enabled by electrification. People will feel more comfortable in small vehicles mixed with large vehicles if all are automated.
• Increased capacity from existing pavements as cars can follow with a shorter headway and can occupy narrower lanes. This implies far more capacity in existing lanes, and less need to expand roads.
• Higher speeds on limited access roadways, as driver comfort with car-following and speed is no longer determinative of the maximum speed of travel.
• Lower speeds on local streets as automated vehicles better obey traffic laws and slow down to avoid collisions with other road users like pedestrians and bicyclists.
• Vehicles moving without people. After dropping off passengers, vehicles will redeploy to park or to pick up other passengers, meaning there will be many unoccupied vehicles on the road. Freight and delivery vehicles may similarly be unoccupied. Unoccupied vehicles have less need for speed than vehicles carrying people, creating opportunities for differentiating network speeds.
• Mobility for everyone. Children, disabled persons, and others who today cannot drive will be able to achieve the same level of mobility as others with the full deployment of automated vehicles, especially mobility as a service.
• Lowered vehicle costs (for all vehicles as all user-facing vehicle control equipment is eliminated — saving money — even as new vehicle sensors are added)
• Lowered vehicle insurance costs (as crash insurance is offered by vehicle manufacturers)
• Lowered vehicle repair costs (as crashes, particularly small property damage crashes are reduced and vehicles are simplified with electrification)
• Lowered labor costs (for transit, taxis, freight) as all vehicle types are automated. This implies these modes will be more price competitive than presently.
• Retrofitting rights-of-way so that small lightweight neighborhood electric vehicles don’t need to mix with heavyweight trucks and large cars.
• Roadspace reallocation so that lanes no longer needed for moving or storing cars can be used for other purposes (bike lanes, exclusive transit lanes, linear parks).
• Increased ability to use time for non-driving tasks (see Chapter 2), which implies both bigger and smaller vehicles
• Increased willingness to travel longer distances. In-vehicle time becomes more useful, and therefore less likely to be avoided. The saved travel time and the increased utility of travel are likely to encourage visits to more distant but more attractive destinations.
• Increased gender equality as household chores like shopping and pick-up/drop-off services are increasingly automated.
• Increased willingness to live farther out. People will be more likely to make housing location choices based on their residential preferences (such as school quality, neighborhood security, neighborhood cohesion, etc.) than spatial accessibility

The ownership structure of automobiles will also change in coming years as Mobility-as-a-Service (MaaS) (Chapter 4) becomes more prominent. Sharing implies a reduction in auto ownership (increased mobility-as-a-service) in cities as car-sharing (Car2Go, Zipcar, Hourcar) and ride- sharing (Uber, Lyft, taxi) converge into a single driverless service that provides the right-size car for a given trip on a per-trip basis. While the degree to which people will give up the on-demand convenience of owning a car is unclear, it is far more likely in large cities where people rent apartments and car ownership is a hassle, than in rural areas, where response times of car rental will be larger. MaaS has a number of implications:

The average age of the car will be younger, as shared vehicles are utilized more hours per day and turn-over more quickly. Cars become more like phones and less like long-lasting durable goods.

• The average size of car will be smaller as firms can right-size the fleet for demand, in contrast with privately owned cars, which are typically sized for extreme or unusual uses, rather than the daily one- or two-person trips.
• MaaS customers will travel less frequently than those who own cars, as they will pay out- of-pocket for capital costs each trip, while those who own cars forget about the sunk cost of ownership, which is paid for independent of the number of trips made.
• Streets will need to be redesigned to favor loading and unloading passengers, rather than on-street parking.
• Sharing implies an increased willingness to live in cities, which will be cleaner, safer, and more accessible with electric, automated, and shared vehicles respectively.

Information and communications technologies (Chapter 3) are changing travel demand patterns. Work at home, now at 4.4 percent, is rising, and while unlikely to replace all or even most work outside the home in the next two to three decades (when still fewer than 10 percent of workers are likely to work at home), it can certainly substitute in significant ways for many information economy jobs, and for the information-rich components of traditional jobs. Part-time telecommuting can reduce peak travel, both by shifting the time-of-day when commutes occur and avoiding it on select days altogether. Online shopping continues to grow, and is now about 8% of retail sales, and it could continue to rise to upward of 50% of retail activity, leading to a substitution of delivery for many more shopping tasks. The rise of virtual connectivity has occurred at the same time that the amount of in-person interaction has fallen in the past decade.

Yet, information and communication technologies (ICT) not only reduce travel and but also induce new travel. For telecommuting, the key findings include the following:

 

• Telecommuting reduces commute travel during both peak and non-peak hours;
• Telecommuting enables commuters to move farther away from their employment location and become even more auto-dependent;
• Telecommuting increases non-work travel, which takes place mostly close to home;
• Telecommuting reduces vehicle miles traveled (VMT) slightly, but it helps mitigate the growth of congestion on freeways;

For e-shopping, the literature shows that

 

• Online searching is positively associated with store shopping and people who buy online also buy in person more;
• Studies are mixed on whether e-shopping reduces travel to stores and other leisure activities in the short term;
• E-shopping for now digital products (books, records, videos) has already changed retail patterns and shopping travel behavior;
• Online buying increases delivery traffic and freight transportation;
• Existing studies are based on the small share of e-shopping in retail industries. If its share is large enough to change the distribution of commercial land uses in the region, e-shopping will have a profound effect on shopping-related travel.

ICT are often promoted as a virtue alternative to physical travel, but transportation planners should be realistic about the relationships between ICT and travel: Although the short-term effect of ICT on travel may be substitution, in the long term, travel demand has historically grown as ICT demand increases.

New sensors (Chapter 5) attached to the vehicle, person, and roadway will create increasing streams of information about real-time conditions on all transportation systems. This should have numerous applications, for instance, enabling transportation agencies to improve traffic signal

timing, and better matching of supply to demand. Connected vehicles are coming independent of automated vehicles. Whether the infrastructure providers add intelligence to their road and signal systems (for instance, telling vehicles when the light is about to change) is an open question.

The potential transition away from gasoline is another important change confronting the transportation sector (Energy -Chapter 6). The timeline for electrification is similar but slower than that for automation. Though automated vehicles need not be electric, and electric vehicles need not be automated, we expect these systems to track and both see increasing deployment. If current trends hold, electric vehicles (EVs) may make up 68% of new car sales by 2050. This number is highly dependent on gasoline prices and environmental regulations. Minnesota will likely lag the US as the cold weather is less conducive to EVs than the US as a whole.

Electricity generation costs are dropping, as are battery storage costs. There are new opportunities for in-roadway electric charging (dynamic wireless power transfer), probably beginning with buses at bus stops, that should be explored by transportation agencies. The advantage of such charging systems are a reduction in on-board battery storage weight required, which greatly improves vehicle efficiency (since energy is not consumed moving around stored energy). Gasoline remains the fuel to beat, and if gasoline costs remain low, electric vehicle deployment will be slower. Other fuels like methanol have an opportunity to become more significant, especially for truck fleets, for which electrification is much less efficient. Urban fleets with a lot of stop-start activity may see hybrid electric vehicles.

We anticipate a reduction in energy consumption overall per distance traveled with reductions in vehicle weight for passenger cars and more efficient use of trucks (which are likely to get heavier, as they carry larger loads).

Biofuel use for surface transportation is likely to plateau near existing use levels; however, it may increasingly be used in the electricity sector (and thus indirectly for an increasingly electrified transportation sector).

Importantly, a reduction in gasoline consumption has large implications for transport financing. The lack of user fees for electric vehicles is a growing inequity that creates opportunities to move toward road pricing, as discussed below

Pricing (Chapter 7) transportation proportionate to use has been a holy grail for transportation economists for decades. Pricing can be used to reduce or eliminate congestion by managing demand so that it does not exceed available supply. However, to date, it has been technologically and politically difficult to implement such a system. The advent of electronic toll collection (ETC) in the 1990s has resulted in a small resurgence in the number of toll roads, but there is no evidence that individual toll roads will expand to be a significant share of all roads anytime soon.

Cities like Singapore, London, and Stockholm have established congestion charging zones. However, urban congestion charges have yet to be deployed in any large US city, and are unlikely to come to Minnesota before playing on the more congested New York, Los Angeles, San Francisco, and Chicago stages.

High occupancy toll lanes, such as the MnPASS lanes in Minnesota, are being deployed at a more rapid rate. The additional merit of these lanes is the opportunity to have this converted to serve automated-only traffic much sooner than all roads can be, providing a much higher throughput than general purpose lanes. This could occur as soon as 2025, and provide a decade of additional road capacity before human-driven cars are driven-off the freeway for the last time.

Notably, EVs do not pay gas tax. (And hybrid electric vehicles pay much less per mile in gas tax than traditional internal combustion engine vehicles). As EVs gain market share, if the user-pays principle is to be maintained and reinforced, a new financing system needs to be found for these vehicles. This provides an opportunity to implement mileage charges with off-peak discounts, helping spread the peak and better-use road capacity. Phasing in road pricing one electric vehicle at a time seems the most promising strategy to deploy pricing on roads without the risks of a new large-scale system deployment.

Logistics (Chapter 8) identifies a number of potential changes affecting the freight sector and how goods are delivered. Automation will affect deliveries as it has changed passenger transportation. A variety of automated delivery systems are likely to trialed in the coming decade, as distributors and retailers aim to connect directly to customers.

On the logistics side, there are a number of changes enabled by information technologies. Supply chain network pooling and the physical Internet for long-distance shipments may become increasingly common as a means of getting better capacity utilization out of vehicles and drivers or vehicle controllers. Similarly efficiencies can be garnered through consolidated home delivery. All of these mean that fewer, but heavier trucks will be using Minnesota roads. Same day delivery in business-to-business, and more significantly, in business-to-consumer sectors is also likely to become more common, reducing shopping trips, and making online purchasing even more spontaneous, but in the net not affecting road usage much in terms of amount, but perhaps more in terms of additional traffic in evening and weekend periods.

The overall conclusions are complex, but they suggest significant changes in the transportation sector over the coming few decades. Business-as-usual practices will need to change consistent with changing technologies and their effect on both supply and demand.