Autonomous vehicles destroy Dumbstralia’s infrastructure boom

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From Eric Jensen, retired civil engineer, a life member of Engineers Australia, with years of professional engineering experience working on transport infrastructure.

Autonomous Taxis will be Everyone’s Car

Elon Musk has forecast that next year Tesla will be manufacturing cars that can be used as autonomous taxis (ATs). General Motors has forecast much the same. They are remarkable forecasts especially since Musk has also gone further and predicted the AT/mile cost will be US$0.18. This is AU$0.16/km for AU$1.00= US$0.70. Plainly ATs will be a game changer for taxis. As well, ATs will be a game changer for many other things.

Currently, taxi fares are approximately $2/km, whereas, eventually AT fares should drop to below $0.20/km because, according to Musk and others, AT/km cost will eventually be about $0.15/km. This fare change will see present-day taxi companies disappear and be replaced by AT companies.

Ridesharing should become a major and much-used form of AT travel. In part, this can be expected because AT ridesharing should eventually have fares under $0.10/km.

Currently the all up cost of train, bus and car travel is very roughly $1/km. Nearly all of this travel can be replaced by $0.10/km ridesharing. Most travel will, especially train and bus. The fast, door-to-door convenience of ridesharing will be a huge improvement on transit (trains and buses).

With much city travel changing to ridesharing in ATs, most traffic congestion should disappear. This will be because ridesharing has the potential to cut peak traffic volumes in half.

Most ATs will be battery powered and so function without CO2, NOx, and other emissions.

In a few short years, ATs should be in cities everywhere. Give or take a year or two, 2022 should be the year that ATs become sufficiently functional such that ATs are superior to our present-day taxis and city ready. From then on, the production of ATs should ramp up dramatically and within a couple of years be produced in their millions for Worldwide markets.

There is a rush to create AT companies because they should be exceptionally profitable. Companies in this rush include Waymo, General Motors, Tesla, Uber, Didi, Toyota and Ford. The best of the AT companies that these multinationals establish, can be expected to have and operate more than 100 million ATs Worldwide by 2030. ATs will then be everyone’s car.

AT Abilities

The whole of life cost of battery powered ATs will be extraordinarily low. The four main reasons for this are:

  • Autonomous operation replaces drivers
  • The 1.5 million kilometre AT lifespan is approximately 3 times that of present-day ICE taxis
  • Maintenance cost is especially low
  • Electricity used for vehicle power has a significantly lower cost than that of petrol or diesel.

Battery powered ATs will nearly always be the norm. ICE ATs will only be norm when extraordinary rare conditions occur. For example, new AT companies could experience a shortage of battery powered ATs and so use ICE ATs instead.

Eventually, most if not all, ICE vehicles are likely to be banned because of their emissions. ICE ATs are likely to be some of the first ICE vehicles banned. This ban could apply within 10 years and new vehicles could be banned earlier.

ATs should be capable of operating up to about 20 hours a day with the rest of the day used for maintenance including charging and cleaning. An AT operating 20 hours per day will in a year travel about 300,000 km and last about 5 years.

For a couple of years, some AT companies may perhaps achieve 300,000 km/year/AT. A more likely performance for an AT company would be 200,000 km/year/AT. This too is likely to be a little on the high side for a typical AT company.

Vehicle Ownership

Cars have mass appeal and, as such, have been a defining characteristic of the 20th century. The appeal continues and now Worldwide there are about a billion passenger cars. Many of the owners of these cars outlay about $0.80 for each kilometre of travel in their cars. Soon though, ATs will be able to provide superior travel at a much lower cost.

For many people, the annual cost of owning a car is about $10,000. Most of these people drive about 1000 to 1500 km/month so their car travel all up cost is usually somewhere between $0.50/km and $1.00/km. For these people in the not too distant future, ATs are going to have a lower cost than car ownership. This will cause a good few of these people to dispose of their cars and instead rely on ATs for all of their car travel. This move away from car ownership will include more and more people as AT fares reduce.

At present, nobody knows what the longer-term extent will be of people dispensing with car ownership in favour of ATs. However, $0.20/km AT fares can be expected to see most people dispense with car ownership. A crude estimate indicates that this would require about one million ATs for the approximately 10 to 15 million Australians that would dispense with car ownership. Worldwide, about 100 million ATs would be required should most car owners dispense with their cars.

There are ongoing tremendous efforts being made by very substantial companies to establish AT companies with AT fleets. These AT companies will want to grow their fleets as fast as they can. The most successful should gain most of the market for AT services.

The strong competition to grow AT fleets is likely to slow the growth of other electric vehicles (EVs), particularly cars. Initially there will not be enough EV manufacturing capacity to produce EVs other than mostly ATs.

When AT manufacturing capacity catches up to new AT demand, much of the manufacturing capacity for ICE cars will be permanently closing. The demand for new ICE and electric cars including ATs, will be considerably down on the demand for the 80 million new ICE cars now in 2019. The reduction in demand could be more than 50%.

EVs are better for the environment than ICE vehicles, but presently, EV uptake is slow. However, due to AT demand, EV manufacturing should increase substantially. The change to ATs should lead to car emissions dropping by more than 50% before 2030.

Ridesharing

Most car travel occurs with just the driver in the vehicle. This happens more so for travel to and from work. For this work travel, the vehicle occupancy rate is typically just 1.15. Ridesharing lifts this rate. In peak traffic, AT ridesharing should be capable of more than doubling this rate. Changing peak traffic vehicle occupancy rate from 1.15 to 2.3 would markedly reduce peak traffic car numbers, end much traffic congestion and substantially benefit the environment.

Strangers sharing a taxi and paying separate fares is little practiced, since presently, it is not particularly practical. ATs can make it practical and this eventually includes having ridesharing fares of $0.10/km.

Ridesharing is not new. It has been happening for hundreds of years or longer. Horse drawn coach was once its most popular form. Of course, back then it was not called ridesharing. At present, train, tram and bus travel are the most popular forms of ridesharing.

AT Infrastructure

AT companies will have depots. The depots will be used for AT maintenance and parking.

A city of one million people can be expected to have tens of AT depots. Depots will range in size. A depot for servicing 500 ATs would be small. A depot for servicing 5,000 ATs would be very big.

A city depot for servicing 1,000 ATs would have a site area of roughly 2 hectares. Most of the 2 hectares would be used for single level, secure, AT night parking. During daylight hours most depot parking would be empty.

AT charging will be an important depot maintenance task. ATs with 100kWh batteries will have to be charged once or twice a day. Power supply to depots would normally be high voltage. A 1,000 AT depot would require a power supply of approximately 10 MW capacity to supply approximately 100 MWh of electricity a day.

One million ATs would use about 40 TWh of electricity a year. Presently Australia uses 200 TWh of electricity a year.

2030 ATs

According to this paper, the strong competition between AT companies should, before 2030, reduce AT fares down to about $0.20/km. The AT fare reductions and the convenience of ATs should cause most car owners to turn to ATs for travel and also dispense with car ownership.

Due to ATs, should about 12 million Australian cars no longer required by their owners, then about one million ATs would be required to replace the unwanted cars.

The estimate that Australia will have one million ATs before 2030 needs to include for ridesharing. Should ridesharing be very well used, then the one million ATs estimate should be reduced to about 800,000. Should ridesharing be somewhat less used, then the one million ATs estimate should be increased to about 1.2 million.

Traffic Congestion

ATs without ridesharing will increase traffic congestion. As traffic congestion is already a serious problem, ridesharing has to be made a major part of AT travel.

Autonomous vehicles (AVs) will transform road transport in many beneficial ways. In the 2020s, ATs are likely to be the most beneficial transformation. In the 2030s, the most beneficial transformation is likely to be that all road vehicles will become autonomous.

In the 2020s, ridesharing ATs should end much of the traffic congestion. However, in the 2030s when all traffic becomes autonomous, traffic congestion should be no more. AV bumper to bumper spacing can be considerably less than for vehicles now. With reduced bumper spacing, roads can accommodate more vehicles. With all traffic autonomous, road traffic capacities should be 3 times present-day capacities.

Public Transport verses ATs

The convenience of taxi travel is self-evident. Everyone wants travel that is fast, door-to-door service. Taxis provide this convenience, and with ATs, the convenience will be even better.

It is also self-evident that when AT fares match public transport fares, virtually no one will use public transport. This fare match is likely to happen before 2030.

By 2030, there should be $0.10/km AT ridesharing fares. By then, even free public transport fares will not stay the demise of public transport.

People foregoing public transport for ATs will be a pressure on traffic congestion. Ridesharing will counter this. For ridesharing to adequately counter this, the public will have to strongly embrace ridesharing. It will be essential for government to strongly support ridesharing.

AT Platforms

ATs platforms will be essential to connect AT users and ATs. In doing this, the platforms provide ATs their customers and AT users transport to their destinations. Generally, AT users would use a smart phone AT app to access an AT platform so as to order ATs. A good AT app should get ATs with reasonable fares and that arrive promptly.

In addition to connecting AT users and ATs, an AT platform has to conduct AT fleet management. A platform that can do this well will be both sophisticated and complex. This may limit the development and use of AT platforms to just a few large AT companies. These AT platforms may not serve AT users as well as they should. To overcome this problem for AT users, the AT platform could be a pair of platforms. One platform would perform AT fleet management and a second platform would interface between the management platform and AT users. The purpose of the second level platform would be to ensure that each AT user was provided with AT travel that was the optimum for their requirements.

This dual AT platform model should be suitable for cities that have several big AT companies. Over the top of AT fleet management platforms, there would be a second level platform or platforms that AT users would use to order ATs. The second level platform(s) would interrogate the AT fleet management platforms to provide each AT user with the most suitable available AT.

AT platforms would be subject to legislation. The intent of the legislation should include for the reasonable interests of stakeholders such as the public, AT owners, platform owners, government departments and agencies, transit owners and various others. An essential part of the legislation would be to maximise sensible use of ridesharing.

Safety

Each year, well over a million people die in road accidents. Ten times as many people are seriously injured. Human error is a major contributing factor in 94 percent of these accidents. Vehicle automation should end this human error and so reduce the road accident tolls by approximately 90%.

One of the aspects to like about ATs is that they are a fast way to transition to vehicle automation, in fact, very likely the fastest way. This fast transition to ATs is, very probably, the fastest way to hugely reduce road accident tolls.

2030 AT Fares

According to Elon Musk, the present-day AT/km cost for an AT Tesla is AU$0.16. The corresponding cost for 2030 Teslas should be somewhat lower due to technical and manufacturing improvements.

According to the May 2017 RethinkX report titled “Rethinking Transportation 2020-2030”, a 2030 AT fare should cost about AU$0.14/km. The following “Sensitivity Analysis for Mobility-as-a-Service Vehicle” is information taken from the RethinkX report.

Sensitivity Analysis for Mobility-as-a-Service Vehicle (ATs)

Item Conservative case Note Central case Upside case Note
Upfront cost (depreciation) $2.00 $6.00 -$2.00 1
Vehicle lifetime $1.00 2 500,000 miles -$2.40 3
Maintenance $0.70 4 $2.90 -$1.50 5
Insurance – conservative $1.30 6 $0.90 $0.00
Tax $1.00 7 $0.30 $0.00
Platform fee $1.30 8 $2.60 -$2.60 9
Fuel $0.00 $1.80 $0.00
Finance $1.30 10 $1.30 -$0.60 11
Total cost USD per 100 vehicle miles $24.40 $15.80 $6.70
Total cost USD per 100 vehicle kilometres $15.16 $9.82 $4.16
Total cost AUD per 100 vehicle kilometres $21.65 12 $14.17 $5.94 12
Total vehicle cost AUD/km $0.22 13 $0.14 $0.06 13

Notes
1. This is possible by designing TaaS-specific vehicles based on modularized platform. TaaS (mobility-as-a-service).
2. Battery life of only 200,000 miles — two battery replacements but the rest of vehicle lasting 600,000 miles.
3. Vehicle lifetime of 1,000,000 miles with one battery replacement after 500,000 miles at cost of $100/kWh in 2026.
4. Maintenance increasing to 25% of ICE equivalent.
5. Maintenance decreasing to 10% of ICE equivalent. This is possible now, but further gains from automating process and redesigning vehicles and consumables for resilience could easily deliver these gains.
6. Based on current Tesloop projected cost-per-mile (in a human-driven vehicle).
7. Based on full recovery of gasoline taxes lost.
8. Based on Platform rising to 30% of cost-per-mile.
9. Based on open source platform provided for free (possibly to capitalize on other revenue generating opportunities — the Facebook/Google model).
10.  Based on rate of interest rising to 10% per year.
11.  Based on rate of interest dropping to 4% per year and utilization of vehicle increasing to 60%.
12.  AU$1.00= US$0.70.
13.  Value rounded to nearest cent.
The reference for this this sensitivity analysis is the report titled “Rethinking Transportation 2020-2030” which can be downloaded from https://www.rethinkx.com/transportation.
This sensitivity analysis is for the USA.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.