With the advent of driverless cars, young people are already lamenting the loss of freedom to hit the open road. Seemingly every major car company and every major technology company is racing to be on top of this promising new technology, referred to by many as “AV” or autonomous vehicles.
What does AV mean for real estate? According to experts at the Urban Land Institute, planners are designing new parking garages with flat plates for easy conversion to other uses like offices, retail, hospitality and community gathering spaces. Streets and sidewalks will make way for cafes and other active uses as the need to park cars on the street is significantly reduced.
According to a report by Fortune in 2016, the average car in the U.S. is parked 95 percent of the time. This simple fact means AV will bring much greater efficiency to transportation, with most cars working on the roadways all day long rather than sitting idle in the garage.
With new technologies, such as radar, lasers and cameras, driverless cars will drive closer, stop quicker and avoid crashes more often than vehicles operated by drivers. Even crashes and accidents that involve driverless cars today are largely based on human error; someone walking in front of driverless vehicle; or a driver-operated car striking the driverless vehicle.
Recently, Andy Cohen, co-chair of Gensler, told a Minneapolis audience of NAIOP members that 2020 will be the peak sales year for cars in the U.S., followed by a steady decline due to driverless cars. Uber and Lyft are making it cheaper to rideshare than own a car in many major U.S. cities.
Insurance companies are surely taking note of the rapid roll-out of AV technology given predictions that a good portion of the $200 billion auto insurance industry will go away. More than 90 percent of accidents are caused by human error according to the National Motor Vehicle Crash Causation Survey. Roads and highways will be safer, eliminating nearly two million crash related injuries.
Still, predictions of the societal impact of AV are not all positive. Today, almost six million workers drive buses, trucks, and taxis. If driverless vehicles advance as quickly as some predict, these dislocated workers will need retraining and new jobs in other industries.
All of this change will not happen without new and modified regulations. State legislatures across the country are considering changes to help U.S. companies compete in a global race for dominance that may make the moon shots of the 1960s look like a high school foot race. Last year, the House of Representatives passed the Self Drive Act with bipartisan support. The bill lays out a framework for AV regulation on the federal level.
While the history of driverless cars dates back to the 1920s when futurists demonstrated the first radio controlled cars on the streets of New York and Milwaukee, the real potential of this burgeoning technology now rides on advancements in mapping, radar, and smart phones. Given consumer demand to order everything from pizzas to mortgage loans on their phones, it’s not hard to imagine a world where we call for a ride and then check the stock market and sports scores as we tool along in the comfort of a driverless car. Goodbye little GTO!