Future Shock In The Autonomous Electric Vehicle Economy

The autonomous electric vehicle economy is poised to deliver lower costs that will reshape our lives.

The first article in this two-part story outlined the price leadership that autonomous electric vehicles will win through a mobility as service (MaaS) business model -- which substitutes traditional car ownership with services like ridesharing. In less than 15 years, the average household is projected to save $5,600 annually from using MaaS.

As a least-cost solution, autonomous electric vehicles are projected to win 30 to 40 percent market share from traditional fossil-fueled vehicle ownership by 2030.

This second article outlines the public policy issues created by such a tidal wave of change.

Mobility future shock

Mobility future shock is posed to slam into all of us. Millions of new jobs will be created in the years to come. And millions will be lost.

The business of doing business will be radically disrupted. Fortunes will be made by MaaS companies and entrepreneurs. Existing businesses that have been the core of America’s past success will be reduced or shuttered.

Mobility future shock will also slam into our politics. Local, state and federal policies for autonomous electric vehicles -- and around the disruptively lower prices generated by solar and wind power plants -- will determine our country’s economic future.

Public policy future shock

Uber offers a small example of the mobility future shock about to hit our economy and policymakers. No one knew Uber in 2007 when Steve Jobs introduced the iPhone. Ten years later, Uber is the world’s largest taxi company, but it owns no vehicles. Public policy is still trying to catch up with this radical new mobility service.

In comparison to Uber, MaaS will hit public policy like a tidal wave. It will at first challenge, then wipe out, a hundred years of public policy laws, rules and precedents. Some examples include:

Trucking: Trucking is an industry defined by intense price competition, high on-time performance expectations, historical driver shortages and substantial regulation. Autonomous driving will challenge all of the trucking sector’s existing parameters. MaaS will generate a political firestorm that may include teamsters fighting for their jobs and legacy trucking companies fighting for competitive positioning.

Auto dealers: Transportation has been defined by car loans and auto dealers for 100 years. MaaS is poised to wipe out this business model. Auto dealers have tremendous local and state political power. In many states like Michigan and New Jersey, they used their power to block direct-to-consumer Tesla sales. How much more will they fight the MaaS business model politically?

Taxes: Sales taxes on gasoline and diesel pay for our roads. Counties thirst for auto dealerships and the sales tax revenues they generate. What will replace lost tax revenues from gasoline and car sales in an MaaS economy?

Zoning: What will Americans do with their car garages and driveways when MaaS becomes a reality? What zoning issues will arise from creative homeowners with 600 square feet of now-vacant space plus a ribbon of concrete in their front yards that is no longer needed?

Electric utility regulation: MaaS will enable zero net energy (ZNE) building economics. ZNE buildings are homes, offices, and factories with smart technologies that enable price arbitrage between utility service and self-generation through an onsite solar system and buying/selling with other ZNE buildings. MaaS-generated consumer demand for cheaper renewable energy may be the final straw that forces states to end electric utility monopoly control over retail electricity sales by adopting ZNE public policy.

Urban city design: Having a sufficient quantity of accessible and affordable public parking is the bane of urban city planning. There is never enough. MaaS removes this parking barrier between consumers and downtown commerce. It also creates new city design challenges for integrating autonomously-driven drones, robots and vehicles with humans.

Shopping malls: What happens to shopping malls, already under competitive pressures from Internet retail and free delivery, when their huge free parking lots are no longer a competitive advantage?

Public transit: Public transit is a vital service for daily commuters and those less advantaged. Will MaaS displace today’s public transit with universal service delivering both lower prices and improved customer satisfaction? Or will public transit aggressively adopt MaaS technologies to build their own curb-to-curb, least-cost solutions?

MaaS public policy challenge

By 2030, most of us will look at MaaS like we look at our smartphones today. We will wonder how we lived and worked without it.

To realize this promise, we need public policy that paves the way. That is the burning platform confronting policymakers. The turbulent political waters created by lost jobs and shuttered businesses present obvious challenges.

Those issues place MaaS public policy on a dual path.

One path is to open the door for technology adoption that will propel our economy to more than 3 percent economic growth. The other path is to provide human services to those who lose their jobs to MaaS. MaaS will create a massive need for job retraining and job transition financial assistance.

Consumers want goods and services that cost less and mean more. This underlying driver is creating a global, multitrillion-dollar Green Economic Revolution. MaaS will deliver these results. But the future shock will be disruptive and transformative. From Congress and state houses, to utility commissions and city councils, the time to act is now.

Image credit: Flickr/SPUR