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Posted by on Apr 19, 2015 in Blog | 0 comments

Transportation Disruption & Cities – the tip of the iceberg

This is old news worth repeating: Uber and Lyft are totally disrupting transportation. While the press has focused on disruption to the taxi industry, other aspects of these ride-hailing technologies are a much bigger deal. While there is great thinking on transportation disruption, we need to take a closer look at what it means for cities at a granular, even daily, level.

This is particularly important because there are areas of simultaneous disruption. Big infrastructure is in trouble, mainly because of how we fund roads and transit via gas taxes. The changing nature of work, jobs and work spaces affects commuting patterns. Millennials who supposedly love transit and cities are fickle voters, often leaving funding referenda in the hands of older, car-dependent voting blocs. So what do cities need to consider?

1)  Cars

The costs of car ownership and driving, long hidden, are becoming more transparent. As cities and states increase use of tolls and “right-priced” parking, that $7000 a year cost cited by AAA gets real on a daily basis. Most households, however, don’t have the geographic luxury of going car-free.  Instead, families  are trending towards “car-light” and turning to technology to reduce common hassles like parking and rideshare.  For cities, fewer cars can mean less congestion, but also stress programs reliant on fees, parking income and registration.

For aging boomers and their families, the conversation tends to focus on the “when” of giving up keys.  The better question is “cars replaced by what?” Paratransit (dial-a-ride) run by agencies will remain, but more options like Uber and Lyft are expected to grow.

2) Ridesharing (Group Rides)

This is where the real disruption occurs because it has the widest applicability for the lowest cost. Tech-enabled rideshare uses algorithms to determine optimal routes depending on origin-destination requests and fleet deployment. New companies like Bridj and UberX act like a Super Shuttle without the airport. These systems can service cities, suburbs and rural areas alike which makes them super powerful.  The big challenge for cities is how to manage pick up and drop off for these private-but-kinda public systems at bus stops and along curbs. Fare subsidies and parking cash-out, common for public systems, also pose a question mark for self-organized fleets. Can they get the same subsidy?

3) Self Driving Vehicles

Self-driving vehicles are a real wild card.  Yes they promise to use existing roadway more efficiently (because cars can travel closer together without wrecking). But self-driving cars still need a lot of real estate in the form of parking on both ends of the trip. Self-driving transit seems to pose a bigger benefit for cities, though this needs a lot of thinking for non-rail transit.

4)  Transportation Demand Management

Transportation Demand Management plans (TDM) are the sleeping giant for mobility. Why? Because the disruption in transportation is all about the explosion in options. TDM plans are basically advertising to let people know options and how they work. This can put local governments in the somewhat uncomfortable position of advertising private companies and smartphone apps.

But it is also a big opportunity to reach drivers since many apps, from parking space finders to ride shares, provide solutions for car owners who live far from transit or walkable communities.  This has PR appeal because programs are not “anti-car,” but instead a support system to lessen the burdens of driving.

5) Transit Oriented Development & Economic Development

Conventional wisdom has it the bigger the transit system, the higher the density, real estate investment and ROI. But what happens as transit transforms to smaller, on-the-fly routing?  This is a really big deal that nobody is talking about. Just as cities are waking up to the economic power of development keyed to transit stations, transit is getting way more fluid.

Takeaways:

  • Is public transit in trouble? A Mobility Lab (Arlington VA) report recently attributed some of the region’s transit ridership woes on the popular bike share system, Capital Bikeshare. Travelers are using bike share to replace subway trips. This is an eye-opener for METRO as the 40 year old system faces mounting maintenance needs and cries for expansion. Scrappy micro-systems will likely begin to lure riders, in particular those who must make transfers. Ridership will become less predictable as riders consider a suite of options. On the other hand, as more people ditch cars, transit becomes “the other car.” Transit agencies may face pressure similar to the Postal Service where technology invades the business model even as legacy costs rise.  Like the Post Office, public transit really can’t go away completely.  This is worth a giant national conversation.
  • TOD Everywhere? – Right now, real estate close to transit stations enjoys a premium. Real estate analyst Cushman & Wakefield estimates a 30% premium for space within the first 264 feet of the station compared to space 1320 feet (1/4 mile). But what happens when the transit can come to you (or at least closer to you)?  How does this affect the distance premium?  What other factors and amenities begin to matter?
  • How will Infrastructure and curb space play out? Vehicles, no matter the make or operating system, still need roads, parking and staging areas. Fewer, energy efficient cars are killing the 20th century gas tax model of funding roads, transit and maintenance. Big ambitious roads and subways are fewer and farther between as cities and states experiment with smaller schemes (limited access toll roads, streetcars).  The app+ride revolution is posing yet another wrinkle. These new systems aim to squeeze more rides into existing rights-of-way. This is a good thing, but roads still need maintenance and rideshare basically reduces the vehicle base (and gas consumption) that historically pays for roads.

Uber’s high profile fights with taxi regulations continue, but cities need to prepare for larger ripple effects of transportation tech disruption across the municipal enterprise. Smart cities (and entrepreneurs) will map out the positive and negative impacts.  The really smart ones will take the advantages to bridge programs like affordable housing, aging-in-place, and a fresh look at real estate that can take advantage of flexible fleets.

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