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Uber Didn't Kill Parking. Neither Will Self-driving Cars

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When Detroit Mayor took the stage at the Detroit Auto Show in 2017, he suggested that parking garages may soon be irrelevant, saying, “If self-driving vehicles are really close, it may not be that people are going drive a car and store it for eight hours in a structure; it may be that the self-driving car takes you to work, goes back home, and does errands with your spouse.”

While that limited use case may indeed be genuine -- your personal vehicle could drive itself home to be used by a spouse during office hours -- it doesn’t paint the whole picture. There are many interconnected factors at play here, which resists simple “Uber kills X” narratives.

Indeed, self-driving cars will revolutionize urban mobility. But they won’t singlehandedly make the parking industry irrelevant. Here’s why.  

Autonomous reality check

The common thinking here is that autonomous vehicles will save the day for urban mobility. With easy-to-hail on-demand vehicles without drivers, rides would be cheaper (and even more convenient), while congestion would decrease.

But how would this be any different than having a bunch of Ubers, Lyfts, and taxis driving the streets, prowling for passengers? The only difference is that there are no drivers. 

These vehicles still take up space on the roads - and need a place to park. Even if operating 24/7, there’s still downtime during charging, maintenance, and reduced demand during off-peak times. These vehicles have to go someplace - and much of the existing parking infrastructure is ideally suited for this use.

Demand imbalances 

As we’ve all witnessed during the pandemic, there’s a huge problem when demand outstrips supply. So what happens when the same imbalanced dynamic hits the streets? 

Let’s say that 60,000 people want to get to a stadium for a concert. How will autonomous fleets respond to that surge in demand - especially at the end of the show when everyone leaves at once? It’s just not feasible for a limited capacity network to handle these surges.

With a capacity that doesn’t easily fluctuate with demand, self-driving cars will experience similar issues to cars today: they’ll go unused more often than not. It’s the same challenge faced by public transportation systems, electrical grids, and other infrastructure: how do you build capacity to serve peak demand without overspending to maintain that excess capacity for when it’s needed most?

It will require a balanced transportation ecosystem that will include owned vehicles (autonomous or otherwise), autonomous fleets, and public transportation. 

The economics of 24/7

It’s not economically feasible to circulate self-driving cars 24/7. Even if that was the solution to avoid having to park them someplace, there’s a massive cost to using an asset constantly. There’s wear-and-tear that reduces an asset’s useful life, especially when it comes to batteries with a limited lifespan based on charging cycles. 

Even as autonomous vehicles are managed mostly by companies, there will still be the need to park these vehicles. During low-demand periods, cars will need to park to conserve energy and recharge. And, since these vehicles need to remain close to demand, they can’t always go long distances to return to a fleet’s home base. 

On-demand congestion

One of the main reasons that ridesharing didn’t quite live up to its transformative potential was its unintended impact on traffic. On-demand ridesharing has made congestion worse, as more cars took to the roads prowling for passengers. 

So not only is ridesharing siphoning users from public transit, it’s made congestion worse, which then extends travel times for commuters. These extended travel times then push more people to consider driving themselves due to comfort and convenience. 

More congestion then also affects how reliable on-demand rideshares can be. 

To get to a world where on-demand transportation appears at your doorstep in mere seconds, vehicles will need to be near people. Otherwise, wait times will be too high due to congestion. 

The need for vehicle density means that vehicles will need to be parked close to population centers while also being evenly distributed across neighborhoods at any given time. Parking lots will be critical pieces of that infrastructure. There’s just not enough time for vehicles to return to some distant centralized staging areas in a world where congestion increases travel times - and thus wait times for customers. 

Self-driving features

The rise of self-driving features only makes private cars even more appealing, as drivers become riders and can focus on other tasks while the car drives itself to work.

Suppose the average lifespan of a vehicle on the road is 15+ years. In that case, there’s an interim transitional period where autonomous features increase the number of single-occupancy trips that you’re going to see. 

More cars, fewer carpools, and less public transit will cause even more congestion, which doesn’t reduce the number of vehicles on the road at any given time. 

In fact, self-driving technology may simply create a situation with increased vehicle usage, which creates demand for parking them as people commute from suburbs.

Unintended network effects

If anything, Uber had the most impact on public transportation by making it more convenient to take private rideshare than a public vehicle. Plus, services like Uber Pool have reduced the cost of individual rides, which makes carpooling more competitive to public transportation. Additionally, parking lots can leverage rideshare networks to become a great last-mile solution for transit hubs or airports, replacing shuttles at long-term park and fly facilities.

With fewer rides, how will those transit systems sustain themselves? As public transit options diminish due to less investment (and less usage), this puts even further pressure on demand for private vehicles for daily use. And - returning to the recurring theme here - more daily use increases congestion.

The downstream impact of spending more time stuck in traffic means that more people may justify their private vehicles: more private, less intrusive - and still a need to park them when they get to their destinations.

EV network effects

Finally, there are also the typical ownership costs of a car. Currently, it costs around $9,500 annually to own a car, with is in addition to the average purchase price of around $31,000. Electric vehicles, or EVs, are sold at a premium, at least $10k over the gasoline models.

But, as more electric vehicles hit the market, sticker prices will fall. Plus, the charging infrastructure will expand to accommodate this demand. With more accessible charging, demand will continue to increase, reducing prices even further. Maintenance costs are also lower with EVs, as the technology is less complex than traditional combustion engines. 

These EV network effects, coupled with the expansion of self-driving functionality, will make a potent combination of EV and self-driving. This combination will encourage more people to purchase these vehicles to stress less while sitting in traffic. As more people invest in these vehicles, it makes it less likely that they’ll switch to an autonomous Uber for daily drives - and keeps parking top-of-mind. 

As the cost of owning and using EVs with self-driving functionality falls dramatically, people will continue using their private vehicles rather than switch to an autonomous fleet.

Looking ahead to our autonomous future

All that being said - autonomous vehicles will reshape our cities and our roads. There will be fewer private vehicles and higher usage of those vehicles that do remain. Urban mobility will also include various means of transportation, from scooters to rideshares, private cars, public transit, and perhaps one day even flying vehicles. 

Given these changes, urban planners will need to reorient public spaces around flexibility. With that mindset, a parking lot could be a public transit drop-off zone for during the morning rush, paid parking during the day, a staging area for delivery vehicles in the evening, and a charging station overnight. 

The parking industry is perfectly positioned to flex with these changes - and continue to provide value as mobility hubs in the communities we serve. 

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