Smart Transportation & Infrastructure Challenges

When it comes to transportation infrastructure in our country’s largest cities, we all agree that our cash-strapped transit grids are bad, and traffic is worse. In any major city, one need only cast a gaze skyward to the swoop of cranes fashioning a towering, new skyline of glimmering glass and steel to understand that the sea of red that drowns our highways each rush hour is emblematic of the worsening road congestion and growing pains at hand.

Sprawling metropolises in desperate need of expanded public transportation are focused, critically, on improving accessibility equitably. A  city is only truly connected and vibrant when its mass transit system has equal buy-in from the wealthy and financially challenged alike.

On these generic principles, virtually everyone can agree; where consensus shatters is their application. We need more modes of transit; longer, more diverse routes; and greater frequency and shorter trip times—but how, in this era of penny-pinching?  Because every need can’t be met, the ordering of our funding priorities must be both intelligent and transformative. Otherwise, “sibling rivalry” may pit neighborhood against neighborhood in a mad dash for cash.

Some cities or regions are looking at light rail as a solution, but this frequently does not offer the best bang for the buck. These projects are expensive, often serve only limited communities, take years to construct and by the time they are up and running, may not end up alleviating road congestion much, if at all.

Others are focused on squeezing in additional lanes to existing roads, which, like light rail, is costly but unlike light rail, may actually invite more drivers onto the road and do little to improve traffic flow in the long run. Instead of spending hundreds of millions on solutions whose utility window is both distant and, at best, very narrow, cities could leverage electrified autonomous shuttles almost immediately and at a miniscule fraction of the cost.

Astute observers will note that the internal combustion engine’s days are numbered. Across the country automakers and technology companies are engaged in futuristic pilot projects to safely test autonomous vehicles. While there is disagreement among them concerning which technology is best suited to navigate the external environment, they all agree that the internal combustion engine is too frail and inefficient to power the massive data and analytical requirements of these rolling supercomputers.

With autonomous electric transit all but inevitable and the inefficiencies of rail in mind, major cities in Europe and Asia are already using fixed-route autonomous shuttles to complement their larger public transit networks. In Gothenburg, Sweden, Volvo is operating an autonomous shuttle that will be integrated into the city’s mass transportation network. Similarly, the Swiss town of Schaffhausen this past March layered autonomous shuttles into its public transit system to address its first-/last-mile problem.

San Francisco, whose traffic woes are notorious, has announced that it will launch a driverless shuttle program early next year. Municipal governments are realizing that autonomous shuttles are cost-efficient, environmentally friendly and flexible—three things that commuter rail is not. At their negotiated price, a city can purchase nearly 2,000 self-driving shuttles for the same cost as a few miles of light rail. And unlike light rail, these shuttles, each of which can accommodate 12 passengers, could be strategically re-deployed elsewhere for special events, such as Super Bowl, Olympics or Inauguration festivities.

One significant challenge that autonomous transportation faces is the tension between its innovative policy priorities and the need for balanced budgets. While the nation’s automotive and mobility laws are stuck in neutral, the fundamentals of how public transit operates and is paid for is changing.  In some cases, investments in transportation infrastructure are being paid for by eliminating economic incentives designed to spur growth in electric and alternative fuel vehicles.

For example, in 2015, Georgia made a record-breaking $1 billion investment in the state’s transportation system. As part of that historic legislation, the state did away with its pioneering $5,000 tax credit for the purchase of an electric vehicle. Tax credits like Georgia’s old model were helping to make it possible for middle-class families to own cleaner, more efficient cars, and elimination of the credit had a devastating impact on electric vehicle sales. In fact, just two months after the compromise took effect, the number of such vehicles sold in the state had fallen from more than 1,200-per-month to fewer than 100.

Luckily, factors other than tax breaks and incentives are contributing to the affordability of electric and autonomous vehicles. Manufacturing costs, for example, have recently begun to decline. Between 1995 and 2010, the manufacturing cost of a lithium ion battery has declined by about 14 percent each year. At its peak price point, the cost of the Tesla Model S battery alone was $85,000. Today, that same battery costs just $8,500.  The price tags for the advanced computers required for autonomous navigation have also plummeted.

Regardless of the type of engine, adding to the need for intelligent mass transportation is the growing recognition that personal car ownership is wildly inefficient and costly. The average American family spends $10,000 annually to own a car it uses just four percent of the time. Because of that idleness, shared use is, on average, 10 times cheaper per mile than personal ownership. It’s inevitable, then, that the invisible hand of the market will pivot away from personal ownership and toward shared-use of electric autonomous fleet vehicles.

Which brings us back to type of engine. Under the “transportation-as-a-service” model, vehicles would log somewhere in the realm of 100,000 miles per year, a rate that inefficient internal combustion engines couldn’t sustain for more than two years. Electric vehicle powertrains meanwhile can last anywhere from 500,000 to 1 million miles. (Just imagine your minivan at 1 million miles.)

What is clear is that public policy does not, never has and never will move at the same pace as technological change. However, those in positions of public power would do well to recognize that the competition to engineer the cars (and car services) of the future is fierce, and that firms the world over are on the hunt for US states and cities whose regulatory environments could give them a leg up in this budding industry. Thus, it is prudent for policy makers to ask themselves: Will investments we make today set us up for success tomorrow? Getting to “yes” on that question should be a prerequisite for any significant public investment in transportation. Public policy and technology have never been so interwoven. It is the responsibility of lawmakers to thoughtfully approach mobility with an eye to the not-so-distant autonomous future.

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Eric Tanenblatt

About Eric Tanenblatt

Eric Tanenblatt is the Global Chair of Public Policy and Regulation of Dentons, the world's largest law firm. He also leads the firm's US Public Policy Practice, leveraging his three decades of experience at the very highest levels of the federal and state governments.

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Crawford Schneider

About Crawford Schneider

Crawford Schneider is an associate managing director in Dentons' Public Policy and Regulation practice focusing on matters involving state and local government affairs, including legislative/regulatory research and drafting, land use and zoning, economic development, public-private partnerships, public policy surrounding disruptive transportation, and international trade and investment.

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