“A benefit to the US of more than $3trn per year”: How driverless cars will transform the economy

Dutch infrastructure minister Melanie Schultz van Haegen poses in a self-driving car in November 2013, on the day the Toyota-made vehicle was first allowed on the road. Image: Marcel Antonisse/AFP/Getty.

Self-driving cars, delivery drones, robotic chefs: living in Silicon Valley, you would think we were doing God’s work, delivering dazzling new technologies to a grateful world. Like missionaries convinced of their spiritual purity, the technorati have little patience for reality checks.

 The many benefits may outweigh the costs, but sometimes those costs fall disproportionately on groups ill-equipped to pay the price. Take autonomous vehicles (aka “self-driving cars”), for example. The economic, social, and environmental consequences  are difficult to overstate. According to the American Automobile Association, in 2013 the average car cost the owner $9,151 per year to drive fifteen thousand miles. The average family has two cars.

But new fleets of shared autonomous vehicles will reduce that cost by 75 per cent, saving nearly as much as that family currently spends on food – including eating out. According to a 2014 report in the MIT Technology Review, there’s a “potential financial benefit to the US on the order of more than $3trn per year”. That’s an incredible 19 per cent of current GDP.

This single innovation will transform the way we live. Why else are the founders of Silicon Valley companies like Google, Tesla and Uber investing so heavily in this new technology?

Then there’s the related saving in traffic law enforcement, wrecked cars, vehicle repairs and traffic courts. Studies project that traffic accidents will fall by 90 per cent. Garages will go the way of outhouses, and countless acres of valuable space wasted on parking lots will be repurposed, essentially manufacturing vast amounts of new real estate. Environmental pollution will be significantly reduced. Car insurance will become a thing of the past.

That’s all good news – unless you happen to be one of the 3m professional drivers in the US. Or a car park attendant. Or automotive insurance adjusters, body shop workers, car sales people, health professionals and occupational therapists who work with accident victims, or a myriad of others who make their living, wittingly or not, off the current structure of the automotive industry.

Self-driving vehicles are but a single example of a coming wave of automation – mainly driven by advances in artificial intelligence – that will transform the way we live and work. But the transition may be brutal unless we give some serious consideration to changing our economic policies to better align with our social goals. Technology is about efficiency, not justice.

To solve this problem in earnest, we need new financial instruments that treat vocational training the way we treat home ownership: loans secured solely by future earnings, just as mortgages are secured solely by the value of the real estate. Among other advantages, such “job mortgages” would focus the retraining of workers on jobs that are actually available, since lenders would only offer them if there’s a likelihood of a realising a return on their investment.

Then there’s the question of who will benefit from all this new-found wealth. Unfortunately, the answer is that the bulk of the value will accrue to the already rich: reasonably enough, those with the capital to field the new fleets of autonomous taxis will take the lion’s share of the benefits.

If we’re not careful, the modern economy may motor on without us, leaving the newly disenfranchised on the curb trying in vain to hitch rides from driverless cars.  

Jerry Kaplan teaches impact and ethics of artificial intelligence at Stanford University.

This article is adapted from “Humans Need Not Apply: A Guide to Wealth and Work in the Age of Artificial Intelligence”, published by Yale University Press.


Barcelona’s car-free “superblocks” could extend lives. So will they catch on elsewhere?

Barcelona. Image: Getty.

The world’s biggest cities have larger populations and higher economic outputs than some countries. But as they grow in size and complexity, cities are also facing thorny challenges that threaten the health and happiness of residents. Congestion, pollution and a lack of community spaces have become major drags on people’s aspirations and experiences of urban living.

In response, cities must manage their resources and priorities to create sustainable places for visitors and residents, and foster innovation and growth. Enter Barcelona – the capital of Catalonia, in Spain – where a bold stroke of urban planning first introduced “superblocks” in 2016.

Image: ISGlobal/FAL.

Superblocks are neighbourhoods of nine blocks, where traffic is restricted to major roads around the outside, opening up entire groups of streets to pedestrians and cyclists. The aim is to reduce pollution from vehicles, and give residents much-needed relief from noise pollution. They are designed to create more open space for citizens to meet, talk and do activities.

Health and well-being boost

There are currently only six superblocks in operation, including the first, most prominent one in Eixample. Reports suggest that – despite some early push back – the change has been broadly welcomed by residents, and the long-term benefits could be considerable.

A recent study carried out by the Barcelona Institute for Global Health estimates that if, as planned, 503 potential superblocks are realised across the city, journeys by private vehicle would fall by 230,000 a week, as people switch to public transport, walking or cycling.

The research suggests this would significantly improve air quality and noise levels on the car-free streets: ambient levels of nitrogen dioxide (NO₂) would be reduced by a quarter, bringing levels in line with recommendations from the World Health Organisation (WHO).

The plan is also expected to generate significant health benefits for residents. The study estimates that as many as 667 premature deaths from air pollution, noise and heat could be prevented each year. More green spaces will encourage people to get outdoors and lead a more active lifestyle.

This, in turn, helps to reduce obesity and diabetes and ease pressure on health services. The researchers claim that residents of Barcelona could expect to live an extra 200 days thanks to the cumulative health benefits, if the idea is rolled out across the city.

Space to play. Imag: Mosa Moseneke/Unsplash.

There are expected to be benefits to mental health, as well as physical health. Having access to such spaces can stave off loneliness and isolation – especially among elderly residents – as communities form stronger bonds and become more resilient.

Stumbling blocks

It was Salvador Rueda, director of the Urban Ecology Agency of Barcelona, who first championed the introduction of superblocks – and he argues that the idea could be used in any city. Even so, authorities looking to expand the concept in Barcelona or beyond will need to be mindful of some concerns.

Changes like these require capital investment. Even as the car-free streets are transformed with urban furniture and greenery, the remaining major roads will likely have to accommodate heavier traffic.

Nothing comes for free. Image: Zvileve/Flickr/creative commons.

Further investments in local infrastructure – such as improving surrounding roads to deal with more traffic, or installing smart traffic management system – could be required to prevent serious congestion. Then the question remains, how to finance such investments – a higher tax rate is unlikely to be popular.

What’s more, whenever a location becomes more desirable, it leads to an increase in property demand. Higher prices and rent could create pockets of unaffordable neighbourhoods. This may lead to use of properties for investment purposes and possibly, displacement of local residents.

It’s also worth noting that Barcelona is an old and relatively well-planned European city. Different challenges exist in emerging global cities across Asia, Africa and Latin America – and in younger cities in the US and Australia. There is a great deal of variation in scale, population density, urban shape and form, development patterns and institutional frameworks across the cities. Several large cities in the developing world are heavily congested with uncontrolled, unregulated developments and weak regulatory frameworks.

Replicating what’s been done in Barcelona may prove difficult in such places, and will require much greater transformations. But it’s true that the basic principles of superblocks – that value pedestrians, cyclists and high quality public spaces over motor vehicles – can be applied in any city, with some adjustments.

Leading the way

Over the history of human civilisation, great cities have been at the forefront of innovation and social progress. But cities need a robust structure of governance, which is transparent and accountable, to ensure a fair and efficient use of resources. Imposing innovation from the top down, without consultations and buy-in, can go squarely against the idea of free market capitalism, which has been a predominant force for modern economies and can lead push-back from citizens and local businesses.

Citizens must also be willing to change their perspectives and behaviour, to make such initiatives work. This means that “solutions” to urban living like superblocks need to have buy-in from citizens, through continuous engagement with local government officials.

A man speaks at a public consultation on the Eixample superblock in Barcelona. Image: Ajuntament Barcelona/Flickr/creative commons.

Successful urban planning also needs strong leadership with a clear and consistent vision of the future, and a roadmap of how that vision can be delivered. The vision should be co-developed with the citizens and all other stakeholders such as local businesses, private and public organisations. This can ensure that everybody shares ownership and takes responsibility for the success of local initiatives.

There is little doubt that the principles and objectives of superblocks are sound. The idea has the potential to catch on around the world – though it will likely take a unique and specific form in every city.

The Conversation

Anupam Nanda, Professor of Urban Economics and Real Estate, University of Reading.

This article is republished from The Conversation under a Creative Commons license. Read the original article.