the disruptive impacts of driverless cars on real estate
TRANSCRIPT
… a d its i pact on the Real Estate
Industry
Rutt Bridges
How Real are Driverless Cars?
• Seven years of Google research and testing
• 1.7 million miles with 11 fender-benders and no injuries
• From open highways to congested suburbs and cities
• Many other companies, from Apple to Mercedes, are developing driverless cars
• Google’s goal is o er ial a aila ility y 2020
The New Google Car Prototype
Google’s Strategy: Sell Mo ility, Not Metal
• Mobility can be delivered for 39¢/mile solo, 19¢/mile
per passenger with 2 people ridesharing
• A d that’s at a 48.5% pre-tax profit (29¢/14¢ at 25%)
• Dispatch software manages ridesharing arrangements
• All passengers must be registered (photo & voiceprint)
Mo ility’s Value Propositio
• Safe, efficient transportation that saves you thousands/year
• Low-stress door-to-door service while you work, read, relax
• Less congestion, less pollution, faster commutes, with no
parking or car ownership hassles
• Arrive at work or at home stress-free
How Driverless Cars Navigate in Traffic
Will Driverless Cars find a Market?
History insists that when a technology has obvious utility and is economically compelling, it will
be used.
Car Ownership versus Mobility Service
Are Driverless Cars Safe?
• We lost 426,129 to combat in all 20th Century wars
• We lost 531,886 to auto crashes in the first 14 years of this century
• 93% of accidents are due to distraction, drowsiness, drunkenness, or driver error
• Dri erless ars do ’t suffer fro those pro le s
Mo ility’s Market Seg e ts
• Early Adopters: Millennials, seniors, disabled, low income, alcohol-impaired
• Early Majority: Commuters, kids, businesses (fleets, employees, environmental sustainability)
• Late Majority: The skeptics
• Never: People who truly love their cars
Winners and Losers
• The Winners: The public (savings, free time and safety),
government (road expansions), environment (cleaner air,
greener downtowns), downtown developers, seniors,
disa led, …
• The Losers: The auto industry, oil industry, insurers, taxi
drivers, car rental, auto repair, personal injury attorneys,
parki g lot o ers, e erge y edi al ser i es, …
The Impact on Mass Transit
• In Denver, RTD riders pay about 23% of the cost, taxes and
grants pay 77%
• Can a $2.60 local bus fare compete with 19¢/mile mobility?
- door-to-door, 24/7 on demand service, zero emissions
- pay by the mile, no big empty buses crowding the roads
• Could Light Rail become our $6 billion stranded asset?
How Would Free Rail Impact Economic Growth?
Supercharge Light Rail: Double Ridership
• Exit most bus service routes, saving $288M/year in subsidies
• Eliminate Light Rail fares on all 158 miles of track ($140M/year)
• Increase railcars by 50% to accommodate doubling of rush-hour riders
- 303 Siemens S200 vehicles @ $3.7M, 20 years @ 5% interest = $89M/year)
• Added cost of servicing additional passengers and railcars ($44M/year)
• Total cost to provide free rides to 268,000 commuters: $273M
Public-Private Partnership to Feed Light Rail
• GM’s Che y EN-V (electric, 25 mph)
• Two person urban mobility vehicle
• Not driverless, but could be in the future
• Currently being deployed for field trials in Shanghai
Public-Private Partnership to Feed Light Rail
• Feed riders within a 5 mile radius into stations
• Close coordination between RTD and mobility providers
• Average fare per person: 3 miles at 14¢/mile = 42¢
• Use Free MallRide in Denver, urban vehicles elsewhere
• Double ridership, maximize return on sunk cost of rails
How Would Free Rail Impact Economic Growth?
Real Estate Consequences of Free Light Rail
• FreeRail would attract more corporate headquarters
• Far larger development radius around rail stations
• Easy free access means residents range further away for evenings out
• Strip malls are OK, but a vibrant downtown is better
• Drinking and driving is less of an issue
Needed Infrastructure for Mobility Services
• One or two central maintenance and repair facilities
• Commercial and residential pickup / drop off lanes
• Redevelopment of Light Rail stations: efficient pickup /
drop off lanes
• Approximately one Rapid Charging Facility for every
1,200 vehicles
Driverless Car Rapid Charging Facility
Mo ility’s I pa t o Real Estate
• Reduction of commercial/residential parking ratios
• Redevelopment of commercial and residential for pickup and drop off lanes
• Downtown parking lots available for redevelopment
• Some urban parking lanes becoming sidewalk cafés
• Less highway expansion, but more money for repairs
Mo ility’s I pa t o Real Estate
• Residential parking garages: storage units?
• Home garages: nursery, spare bedroom, home office
• Mall parking lots become retail and restaurant
development opportunities
• Is there a solution for I-70 congestion? Use of feeder
vehicles, driverless 10 passenger buses, and platooning
What is Platooning?