Critiquing the Transportation-as-a-Service Model

There’s been a lot of talk about the potential upcoming disruption of self-driving-cars, including their effect on private vehicle ownership and travel. One of the most optimistic is the 2017 article “Rethinking Transportation 2020-2030.” Authors James Arbib and Tony Seba make some bodacious claims regarding Transportation as a Service (TaaS) — the idea that soon we’ll all be going places in driver-less, electric-powered cars rather than owning manually driven, gasoline-powered, internal combustion engine (ICE) cars.

Among the claims:

  • By 2030, 95 percent of passenger miles will be by such vehicles.
  • Manually driven ICE cars will be so worthless in a couple of years you’ll be paying people to haul them away regardless of how much they cost new.
  • Oil prices will collapse by 2021 because demand will bottom out.
  • The cost of private TaaS vehicles will be 10 cents a mile, or 3 cents a mile for shared vehicles (Taas Pool), compared with 34 cents a mile of an ICE car (if you own it outright) or 64 cents (if you’re still making car payments).

Although I find most of the recent “Green New Deal” proposal to be ridiculous, it does suggest a similar time frame for eliminating ICE vehicles. Don’t get me wrong, I am cheering on self-driving car technology. How nice it will be to step into my car after work Friday evening, go to sleep and then wake up the next morning in Chicago with my own car filled with my stuff ready to take me anywhere in the city or region, and without having to worry about parking.

Img 2473

Cloudgate, at Millennium Park, Chicago

 

I likely won’t be able to drive an ICE car my entire life, however, and don’t want to lose the comfort, convenience and freedom a car provides me. Plus, I’m skeptical both of the time frame and purported ubiquity of TaaS and TaaS Pool.

Change Happens Slowly

No matter how compelling, change rarely happens in the 13-year time frame that the article proposes. History offers numerous precedents of slow technology change. Automatic transmissions have been around since the 1950s, but it wasn’t until the 1990s that “manual” cars became a choice only for people who liked them, rather than the default, cheaper option. (Remember when they used be be called “standard” transmissions?)

Only when new technology has no downside, financial or otherwise (such as pagers to cell phones), does change happen in the time frame that pundits predict. Hydra Matic Transmission

 

Well-publicized crashes could slow acceptance of self-driving cars. I wrote about the one in Florida where a motorist was watching a Harry Potter movie when his car mistook a crossing semi for a harmless overhead highway sign.

Tesla Car Crash in Florida    Public Domain

 

Or that car vs. pedestrian crash in Arizona in which other factors played a role:

  • The pedestrian was crossing against a “no pedestrians” sign, but the street median had what looked like a sidewalk on it.
  • The street lighting was inconsistent, creating a black hole effect.
  • The human driver was streaming “The Voice” on her phone in violation of Uber rules.
  • And Uber expected a driver to pay attention for 10-hour shifts in a car that does 99 percent of the work.
Tempe Crash

A perfect storm in the desert. Note the “No Pedestrians” sign but how much the decorative concrete in the median looks like a sidewalk. The sign is too subtle relative to the design cue.    Google Street View

 

As it turns out, the car actually did see the pedestrian six seconds before the crash but did not stop because the emergency braking feature was disabled in software.

I seriously doubt fully automated cars will be ready, technologically, by 2030. And even if they are ready and promise more safety than driving yourself, the psychological comfort of being “in control” is strong. Witness the fear of flying relative to driving. Post-9/11, people were afraid of flying and terrorism despite the reality that an additional 1,595 Americans lost their lives in highway crashes because they were too afraid to fly.

Cost Estimates May Be Optimistic

The 3- and 10-cents figures from the previously referenced Rethinking Transportation article seem to be based on 40 percent utilization of TaaS vehicles and 500,000-mile life expectancy. Based on the chart below, I came up with my own estimate of 35 percent utilization (I figured 100 percent of the cars in use at rush hour, but with a couple of empty back hauls in the reverse direction during rush hour), so I’ll accept their figure.

Tampa Bay Trips

Trips by Time of Day in Tampa    Public Domain

 

I differ with life expectancy. Even if you have a Toyota or Honda that commonly hits 250,000 miles without needing major repairs, by that time the body is trashed from corrosion. Building TaaS cars out of non-ferrous materials would significantly drive up costs, as it would for ICE vehicles. And everyone keeps saying how simple electric cars are mechanically. On the other hand, cars are becoming more complex electronically, and a self-driving car doubles that complexity.

A lot of bureaucratic questions remain unanswered:

  • How much will it be taxed?
  • Will the tax money be diverted to something other than paying for roads?
  • How much profit will the companies demand?
  • Will they be regulated like utilities?
  • Would the government consider running it as a public service?

In short, with unknown life expectancy and unknown taxation and profit. I consider cents-per-mile cost estimates to be pure fiction at this point.

TaaS and Taas Pool obviously introduce more choices in transportation between mass transit and owning your own car, with financial, convenience and other trade-offs. Sure, many drivers may use them. But people don’t always pick the cheapest model. People shop at Whole Foods instead of Aldi. People drive a Lexus instead of a Yaris.  People live in large new houses instead of studio apartments.

“House of Too-Many Gables”: If people buy these instead of living in a one-bedroom apartment, why would they flock to TaaS instead of owning a vehicle?

 

Today there already are cheaper ways to travel than privately owned cars. But the drawbacks are too great relative to the cost savings. As we will see, there still are negatives to TaaS and Taas Pool. I don’t see “close to 100 percent” mode share. Fifty or 75 percent? Possible. But not 100.

Undesirable Behavior of Fellow Passengers

Maybe you’re an extrovert who loves small talk. Maybe you feel compelled to share your political or religious views with the person next to you. I’m not, and would prefer people leave me alone when I’m sitting next to them on a train or airplane. Maybe the person next to you can’t stop yakking about how he hates Mike Zimmer’s draft choices.  Maybe s/he hasn’t showered in two weeks. Or maybe s/he is engaging in the harassing behavior reported in the comments to this article. These would be bigger problems in a small TaaS Pool vehicle where you can’t move to a far-away seat.

And what if boorish behavior becomes criminal behavior? I doubt shared TaaS vehicles will be viewed as suitable for unescorted kids. Even some adults always wonder whether the person next to them on the bus could be a criminal with a knife intent on randomly stabbing someone. So even rare, isolated incidents on TaaS Pool could scare people away.

On a lighter note, a TaaS Pool vehicle likely won’t allow you to tune the radio to your favorite station, turn the TV (since you’re not driving) to the station you want, turn the A/C to your desired coolness or talk on your phone without disturbing others.

Adjusting The Volume Of Her Car Radio While Seated Behind The Wh

No one touches MY radio!    Public Domain

 

Maybe you’ll opt to use a private TaaS vehicle instead of TaaS Pool so you can control the radio and other features. OK, but then the savings aren’t as compelling. And ultimately you’re still sharing the vehicle, just not at the same time and place. How do you know the person sitting there before you didn’t have the flu and cough all over the car?

The Attachment to Stuff

One nice thing about owning a car is its function as a private locker — or my version of a purse. Wherever I go my car is usually nearby, so it’s a convenient place for medication, toiletries and first aid supplies. In the winter I keep my parka, ice skates and snowshoes in the trunk; in the summer my car holds my bicycle and swimming suit.

You can’t do that with TaaS.

Many people take pride and comfort in ownership. Millennials tend to want experiences rather than stuff, and have less tendency to own houses and cars (maybe because they’re young and cash-strapped). But plenty of Generation Xers and Baby Boomers are still around and will be in 2030.

I like to own my house. I like to look at my house and say “that’s mine.” I can paint it whatever color I want, make my own improvements, plant whatever flowers I want, sun myself on the private deck. And I like to own my car. I see it sitting in the driveway and think, “That’s mine.” I picked out the make, model and color. If the mood strikes me, I can drive down the block or to California.

I think that virtually 100 percent non-ownership of cars by 2030 is as much a fantasy as a Jules Verne story.

Img 1925

My house with the stain color that I picked out

 

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15 Responses to Critiquing the Transportation-as-a-Service Model

  1. Adam Miller
    Adam Miller February 11, 2019 at 11:24 am #

    I agree with these obstacles to TaaS and will add the car ownership is a status signal that won’t go away quickly either.

    But beyond all that, I don’t think the technology is going to keep up with the projections.

  2. Andrew Evans February 11, 2019 at 11:56 am #

    So just some views about this… across the whole topic.

    I glanced over the part about a car vs pedestrian crash. These happen all the time with humans at the wheel, and eventually laws and technology will catch up to this. In France EVERYONE crosses at stated crosswalks and is extremely good about it. Maybe we move to that model and/or hold jaywalkers accountable for their own actions. I’m guessing all of these new cars will have cameras or sensors that record events anyway, so it wouldn’t be hard to go to court with – just different. But again, all of that will be sorted out in due time.

    I’m guessing insurance rates for manually driven cars will go to the point where it would be expensive to buy a new one or buy one without self driving features.

    As far as collecting cars, it goes in waves depending on who has money and what they remember. As far as I know from what friends are saying, the prices of good Model A’s and T’s have since peaked. We’re in muscle cars now, and soon it will be 80’s, and so on. Point being the population that is hell bent on driving old cars will themselves get older, and it will fade away. Add this with insurance rates, and it’s not like we’re going to see a bunch of old farts hanging onto their current cars come hell or high water.

    Personally, although I do enjoy cars, driving them isn’t really a value added experience most of the time. I’d much rather enjoy the scenery along west river road when going to work, than driving the car. Going to Duluth I’d much rather take a nap than be the guy going 90+ in a hurry to get the boring part over. There is nothing at all fun about running errands in the city or driving anywhere. Granted there are some times when I drive, and it is fun, or the connection between the road is there. However that’s not nearly the norm.

    So if it were affordable to have a automated car pick me up, and my partner for that matter, and bring us to work, that would be great. Nothing lost on me at all.

    I’m not sure if I buy gas prices bottoming out, or going down much more than they are. It’s a big industry, it’s expensive, and people need to get paid. So if anything I see them consistent or going up slightly. However, at least to me, it seems the move to get away from gas or to high mileage cars this time around is different than before. It may very well turn out that people are annoyed to have to pump gas at any price, and find it easier to plug in a vehicle at home and pay for it there.

    The point about revenue is going to be a big question going forward. Not really about any tax on shared services, but in general about what will replace the gas tax once gas use really starts to drop.

    Internet speed also plays a part in this. For professionals working from home is becoming easier, and for me (I’m in a extremely data heavy job) with gig internet speeds there wouldn’t be too much I couldn’t do at home that I can in the office. Take away my need to commute every day, and give me a easy option when I do, and I could easily see giving up a car. Or, if I worked at a location that’s more transit friendly.

    I’m getting older now, approaching 40, so although I care, a lot of these 20-30 year in the future things will be lost of me. I’m sure we will still find a way to work and go about our business. It may impact if I buy a winter 911 to go with my summer 911, but that’s not a huge deal in the grand scheme of things.

    I think too we take things for granted. It reminds me in a way about the life and times of Father Pierz in northern and central MN back in the 1800’s. Here is someone from then the Austrian empire, born in late 1785, who came over here in the 1830s to preach to Indian populations (for better or worse) and covered quite an area. In 1863 he went to Europe to recruit more priests to join him (he was 77 years old), came back before or with said priests, and finally went to Slovenia from MN to retire when he was around 87. I bring that up because here was a person who did quite fine without cars, roads, whatever, lived a pretty long life, and made trips to and from Europe in his 70’s and 80’s. Now we’re talking about driving cars or having self driven cars. I’m sure we will turn out ok, no matter what happens.

    • Adam Miller
      Adam Miller February 11, 2019 at 12:45 pm #

      My experience in France does not agree with your assertion about universal use of marked crossings.

      Also, pedestrians are not the problem.

      • Andrew Evans February 11, 2019 at 1:46 pm #

        That’s been our experience every one of the 5 times we were there. Barring the odd side street in Paris or some of the tourist areas in other cities. Generally though that has been the case. Especially away from the tourist areas or in smaller cities. This goes hand in hand with cars stopping before crosswalks, and giving right of way to pedestrians in crosswalks. They also signal at roundabouts which is amazing.

        • Andrew Evans February 11, 2019 at 1:47 pm #

          4 or 5 times I forgot. But we’ve spend over a month there total with around 5000 miles driven.

          • Adam Miller
            Adam Miller February 11, 2019 at 3:45 pm #

            Wait, you’re saying that in the car-dominated parts of France, pedestrians always use designated crossings? Maybe. I certainly haven’t spent too much time in those places and don’t think in passing through them that I would have gotten a strong sense. And it has been a long time since I road tripped there.

            But in the city or town centers? Definitely not.

            I no longer recall how many trips and have no idea how many miles walked 😉

            • Andrew Evans February 13, 2019 at 2:46 pm #

              That’s funny. Yep, we went all the way over there to go to some “car-dominated” areas.

              =)

      • Jenny Werness
        Jenny Werness February 11, 2019 at 3:23 pm #

        I agree, Adam. I was in a couple of smaller towns in France, and most of the roads were a free-for-all for pedestrians. They were typically engineered to slow traffic (alternate-side bump outs) and so walking across the street was very easy.

  3. Josh February 11, 2019 at 12:01 pm #

    I have two roommates, and one would literally need his car taken from his dead hands before he would give it up. The other works on his family’s farm on the weekends and hauls the weirdest things in his. But, all of us live in a 850sf urban apartment and love it – the millennial demographic that might arguably be the easiest to convince.

    I think this change will be really hard.

    • Andrew Evans February 13, 2019 at 3:17 pm #

      In a quick reply to your roomates.

      The question is do they really enjoy paying for a car, and/or is it one that they really enjoy driving.

      The one dead hands roommate may very well find that some kind of a sharing service in the future would replace their need to keep a car, and be cost effective, if they are only using it for convenient transportation. If it’s a sports car or something that’s enjoyable to drive then it’s another story.

      The roommate with the truck is similar. Why spend the gas money driving a truck around when you could get one on demand and save money? Then they could take a more fuel efficient car to their family farm.

      Yes there will be sticks in the mud, or those of us who have vehicles as a hobby and drive them at times because they are fun. But I’m thinking that once this technology matures and becomes normal that a lot of individuals like your roommates may find it easier and even cheaper to move away from owning a vehicle.

  4. Lou Miranda February 11, 2019 at 12:12 pm #

    “Change happens slowly” … and then suddenly.

    Few people used expensive, low resolution digital cameras in the 1990’s… but by 2010, film was dead.

    Few people used expensive, slow personal computers in the 1980’s… but by the 1990’s, the typewriter was dead.

    Few people used expensive, slow touchscreen phones in 2009… but by 2015, keyboard phones were dead.

    Cars are major purchases and last a long time, so change will not be instant. And self-driving cars seem to have a bigger hump to get over than just plain electric cars. But change is coming.

    I think the bigger question is, how relevant will cars be in 20 years, compare to walking, biking, and transit. The further you live out in exurbanville, the slower the change will come, but it will be faster in cities and close-in suburbs that plan well.

  5. Sean Hayford Oleary
    Sean Hayford Oleary February 12, 2019 at 5:35 pm #

    I appreciate some of the skepticism, and I don’t necessarily think it’s wrong.

    But I guess I’d say that despite some doubts: AVs and TaaS are really important advances, and we should support them as much as we can. Our current system is broken in so many ways — life safety, pollution, land use, social connection.

    A couple of specific things I want to mention:

    Car dealers and manufacturers have already done an excellent job at getting people away from owning their vehicles by convincing people to do rotating 3-year leases to always have a new car. I chose to buy a car the regular way, and even before my original loan term was up (I had paid it off early anyway), I got enticements from my dealership to just roll what they assumed was my remaining debt into a new loan for a new car. Such a concept is common, but it makes even an owned car kind of a de facto lease. Not even accounting for this ownership-revolving situation, leases account for a third of car sales.

    In a lot of ways, the constant pressure for new (and luxurious) cars is financially destructive and even predatory. But it does demonstrate that there is some level of comfort with cars that are limited and not owned by the driver.

    I agree with your comment about the car as a portable storage locker. I don’t keep much of anything in my car, but even I find it ridiculously convenient to throw a gym bag in the trunk, have it with me all day without inconveniencing me, and be able to pull it out exactly when I need it. And when I bike commute, it’s a little hard to get used to not having that ability. I know for parents in particular this is important, since kids involve a lot of stuff (car seats, strollers, diaper bags).

    I think it would be cool to have more concepts for public storage of objects — like a modular locker system that attaches to standardized TaaS vehicles. Imagine if, instead of providing a parking ramp, a workplace provided locker storage. In my head this is something like little Yeti coolers that can bolt onto the back of a car. I am sure someone smarter than me can come up with a more sophisticated idea.

    • Monte Castleman February 12, 2019 at 7:34 pm #

      That’s a good point about people already not owning cars with the leasing model, although a lot of people I know that lease their cars regard it as “their car” even if the title is held by the finance company and they have to eventually give it back. You pick out the one you want from the dealer’s lot, keep your stuff in it, and keep it in your garage as opposed to a TaaS Pool vehicle where a different one shows up every day.

      • Sean Hayford Oleary
        Sean Hayford Oleary February 14, 2019 at 2:21 pm #

        I like the idea of using “membership” tiers and brand loyalty to help create some of that feeling of ownership. Think about how people feel a sense of pride and ownership because they go to a luxury gym, or a country club, or have a certain status on an airline as a frequent flyer. All of those are based on a “membership” status, and not exclusive control of a physical object.

        There seems to be a lot of room to differentiate TaaS services in a similar way. Of course, I’d particularly like it if they differentiate themselves with environmental features (one service buys carbon credits, one does solar gardens, another runs a HEPA purifier as it runs around the city — whatever). But I imagine there are other types of luxuries that could come in, especially as vehicles go AV — like 5G connectivity to wifi within the vehicle. Perhaps a tiny espresso machine. Whatever.

        Either way, you could create a brand loyalty and pride that is somewhat analogous to the pride of ownership you get from a vehicle. Still practical hurdles to overcome, but I think that could replace the social pride of owning a car.

        • Monte Castleman February 14, 2019 at 9:28 pm #

          There is something to the idea of “clubs”. I’d love to be a member of the Mayflower Society and the Sons of the American Revolution, (but I doubt the documentation exists to allow it to the point I haven’t bothered to even attempt to research for it). My understanding is clubs are especially enticing to middle age and above people, the ones that like owning physical stuff.

          If you go back to the early days of railroading when everyone road the train, the first class carriages had a roof on, while the other classes didn’t. It would have cost essentially nothing to put roofs on all of them, but it made the first class passengers feel they had a certain status (and be willing to pay a lot more for it). You’re seeing this a bit too with car-makers slapping a “Limited” badge on and putting in leather seats, and then charging many times what the actual cost difference is. Or the granite countertops in apartments.

          We got a bit away from that with ocean liners and airplanes where the additional space allocated to first class really does cost the a lot more money to provide, but I could see something like that happening again with TaaS. Maybe call it “Taas Deluxe” and have fake leather instead of cloth or plastic, the wifi and espresso machine, and a different color paint?

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