How Autonomous Vehicles Can Serve the Under-Served
Low-income households pay proportionately more money on transportation. Driverless cars could drastically reduce the cost of transportation in urban areas.
Autonomous vehicles (AVs) will bring lots of benefits: fewer accidents, reduced traffic congestion and perhaps the end of parking hassles once we can send a self-driving car on its way after dropping us off at our destination. Another potential plus is how AVs could help meet the specific transportation needs of low-income populations.
Transportation is a big part of everyone’s budget and, like other household expenses, the costs are stratified according to income level. In urban areas, for example, the affluent might enjoy the privilege of a private car service, while the middle class may choose to drive their own vehicles or take an Uber or Lyft. For low-income populations, however, public transportation is often their only option.
Given this, it would stand to reason that the higher the income the higher transportation costs would be for each group, but the opposite is true. According to the Pew Charitable Trusts, low-income households spent nearly 16 percent of their take-home pay on transportation in 2014 – up from 9 percent four years earlier. Whereas middle-class households devoted about 11 percent of their income to transportation in 2014, while those at the top income levels paid 8 percent.
With the future deployment of AVs, the cost of transportation could be drastically reduced in urban areas. This could not only help level the playing field for low-income populations when it comes to transportation costs, but also increase their prospects for upward mobility.
Robo-Taxis to the Rescue
In 2015, a Deutsche Bank market research team studied the cost of vehicle ownership vs. the cost of calling an UberX in the 20 largest U.S. metro areas and then compared it with the estimated cost of a “future driverless taxi.” Vehicle ownership in the New York/Tri-State area was the most expensive at $1.53 per mile and St. Louis was the least expensive at $0.67 per mile, while the overall U.S. average was $0.90 per mile
In nearly every metro area, Deutsche Bank estimated that the cost per mile of future driverless taxis would be slightly less than that of vehicle ownership. “Without human drivers, we estimate that on-demand mobility companies will be able to [operate] at $0.89 per mile; close to the $0.90 per mile average cost of operating a car in the top 20 US [metro areas],” the report said.
Deutsche Bank also noted that options like UberPool that share the cost among multiple riders could lower per-mile cost even more. And Ark Investments predicts that the cost for rides in what it calls shared autonomous vehicles (SAVs) could be as low as 35 cents a mile, while others foresee businesses subsidizing AVs by offering free rides in exchange for, say, stopping and shopping along a route.
Affordable Transportation’s Influence on Upward Mobility
In addition to paying more to get from point A to point B, the cost of transportation has other negative impacts on low-income populations. A 2015 Harvard study found that the availability of efficient and affordable transportation has an effect on upward mobility influences such as education and employment as well as lifestyle factors such as access to quality healthcare, food and goods at reasonable prices.
Longer commute times associated with public transportation also lessens the chances of moving up the economic ladder. But if AV technology could equal or lower the cost of travel – or even make it free – while also providing the convenience of point-to-point transportation as with private vehicles or ride-sharing services, it could present new opportunities for low-income populations.
We’re already seeing new services and pilot programs that offer lower-cost or even free rides. Chariot, which was acquired by Ford as part of the automaker’s Smart Mobility initiative, offers a van-pooling service that helps fill the gaps in public transit for low-income populations in cities like San Francisco and New York. And Waymo’s Early Rider Program that launched in the Phoenix, Arizona area last year is providing free point-to-point transportation on a trial basis.
As with ride-sharing services like Uber and Lyft, there’s little doubt that Chariot and similar services will ultimately go autonomous. It’s also easy to imagine Google making a business case from offering free rides since it also doesn’t charge for search and other services.
When this happens – in addition to making roads safer, less crowded and more hassle-free – AVs will have the capability to provide low-income populations with less expensive and more convenient transportation options. And help pave the road to upward mobility for the under-privileged.