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.

Cloud Commuting

The End of Traffic and the Future of Access: A Roadmap to the New Transport Landscape. By David M. Levinson and Kevin J. Krizek.
The End of Traffic and the Future of Access: A Roadmap to the New Transport Landscape. By David M. Levinson and Kevin J. Krizek.

Once upon a time, people kept their life savings on their person or at their homes, stored in physical material like gold and jewelry and property. Then money was invented as a medium of exchange, and people stored a surrogate of their wealth. Then banking was invented, and people centralized their holdings in a bank, and were paid interest for the privilege. Why were they paid? Because the banks could reuse their money by lending it out, at an even greater rate of interest. Money is fungible. I do not lose anything by storing it at the bank (and allowing them to lend it) except the privacy of keeping secret how much money I have, and risk that the bank will be unable to pay me back. The first is resolved through regulations, and the use of multiple banks, the latter by insurance. In any case, it is much safer than storing the money in a mattress at home.

Once upon a time, people kept their life’s information on their person or on computers at their home or work, stored in physical material like floppy disk drives, hard disk drives, solid state drives, CDs, DVDs, and USB chips. Then the internet was invented, and centralized servers were made inexpensively and redundantly, and people could store their information in the “cloud”. In many cases the cloud is free, or charges only a small fee. In exchange, the recipients agree to allow their personal information to be used to generate customized advertising targeted at them personally. But imagine their were a way for the cloud to earn interest on information much the same way banks earn interest on money, by synthesizing it and “lending it out”. Since information is not rivalrous, this may prove viable with sufficient artificial intelligence aimed at developing ontologies and computer intelligence. The risk is the loss of privacy. Alternatively the customer pays the cloud for storage and computation, retaining privacy, in exchange being relieved of duties of backup, which when neglected lead to all too much data loss.

Once upon a time people kept their personal transportation near their person, parking cars and bikes at their homes, workplaces, or other destinations. This was the only way to guarantee point to point transportation in a timely way where densities were low, incomes high, and taxis scarce. Then “cloud commuting” was invented, cars from a giant pool operated by organizations in the cloud would dispatch a vehicle that drives to the customer on demand and in short order, and then deliver the customer to the destination. The vehicle would have the customers preferences pre-loaded (seat position, computing ability, audio environment). The customer benefits of course by not tying up capital in vehicles, nor having to worry about maintaining or fueling vehicles. The fleet is used more efficiently, each vehicle would operate 2 times or 3 times or more miles per year than current vehicles, so the fleet would turnover faster and be more modern. Fewer vehicles overall would be needed. It is likely customers would need to pay for this service (either as a subscription or a per-use basis), there is no obvious analogue to financial interest payments (and while advertising might offset some costs, surely it would not cover them). However stores might subsidize transportation, as might employers, as benefits for the customers or staff.

The tension between centralization and decentralization has been continuous through the history of technology, each has its advantages and disadvantages (and strangely, each also has religious zealots convinced there is one true way). This is ultimately a question of costs and benefits, and who bears the costs and benefits.

I am skeptical that cloud commuting can be made to work quite yet, there are still a few more technologies to perfect. Having tested Zipcar, their system lacks in several ways, much the ways the first banks failed frequently. Zipcars are still not local enough, they charge too much for lateness, the technology is still imperfect. But imagine we have cars that drive themselves. (and to PRT-advocates, these will be cars driving on streets, there are not enough resources to build a new infrastructure network for specialized vehicles). Smart cars solve the localness problem, since the cars come to you. In a way it also solves the lateness problem, because there is no need to reserve a specific car for a specific window, any unused fleet car can be dispatched. There would need to load balancing features, and maybe coordinated carpooling at peak times. (It also saves on parking, especially parking in high value areas).
Related links:

* Technological change, part 2: Autonomous vehicles
* The Future of Cars