This is a guest post from reader Frank McRae

Google Self Driving Car

The emergence of driverless vehicle technology has created much excitement, and speculation about how these vehicles will affect the development of cities. A recent article in the Wall Street Journal claimed that a major consequence of driverless vehicles will be the outward sprawl of cities (Driverless cars to fuel suburban sprawl):

Here is the weirdest thing about this hypothetical future: where you live….you will be able to escape your cramped apartment in the city for a bigger spread farther away, offering more peace and quiet, and better schools for the children.

..there is something akin to a law of nature about new transportation technology: The faster humans move, the bigger and more sprawling our cities become.

While it is true that lower transport costs and faster travel speeds will generally incentivise the outward spread of the city there are other forces at play. I want to put forward the case that the outward spread of cities will not be an inevitable feature of driverless cars and that these vehicles can complement the ongoing intensification of cities.

Driverless cars are not viable without road pricing

Driverless technology will remove the labour cost of driving, and electric vehicle technology will significantly reduce the cost of fuel. While we don’t currently have road pricing, fuel and labour impose costs on the user that practically limit the amount of time their vehicle can be on the road. If there were driverless vehicles but no road pricing then the vehicles could be left on the road at almost no cost. Indeed if parking is priced, and road space for moving vehicles is not, then leaving vehicles circling the block with no occupant would be the rational thing to do. What would be the point of paying for parking or storage when empty vehicles could be left roaming the streets for free? It’s easy to imagine roads quickly descending into gridlock when the cost of leaving a vehicle on the road is so low. Road pricing would be a simple way to clear the roads of circling drive-bots.

While road pricing is a difficult political sell, the politics may shift when the alternative to pricing is completely dysfunctional roads. People generally don’t like paying for parking either, but it is politically palatable to charge for parking in centres when the alternative is the unavailability of parking spaces. Road pricing may become politically palatable when the alternative is roads gridlocked with autonomous vehicles.

Driverless cars will also improve the viability of road pricing by making it practically easy to calculate the distance travelled and to implement time of day charging. And driverless vehicles would remove the privacy case against GPS based road pricing as, for better or worse, users of on-demand driverless vehicles will already be giving up their privacy to the service provider.

Finally, electric powering will require a new source of funding to replace the fuel excise which goes towards funding the maintenance and upgrade of roads. Distance based road pricing can replace the fuel excise in a way that provides a much better link between funding and demand for infrastructure.

This distance based road pricing will provide a disincentive against living in outer suburbs.

Driverless cars will disrupt car ownership

Driverless cars will mostly be used through on-demand services. Uber has already provided the model for this, and it will not be a huge stretch to extend Uber’s model to driverless vehicles. Indeed Uber is already a major investor in driverless technology and is launching an autonomous taxi service in the US city of Pittsburgh.

If it is possible to get an affordable ride on-demand then why would anyone bother with the storage, insurance, and maintenance costs of car ownership? It seems likely that a major effect of the driverless revolution will be the end of car ownership for the majority of people. This disruption of car ownership will significantly reduce the need for car parking spaces. This has significant implications for the development of the city.

Driverless cars will remove the parking and traffic constraints on dense development

The need to accommodate parking sets design limitations on development, and minimum parking requirements create a regulatory barrier to intensifying housing where demand is highest. These limitations can reduce the financial viability of intensified developments. If on-demand driverless vehicles disrupt car ownership, development can be freed from these constraints.

Additionally, a major source of “community” objection to development is the effect of new dwellings on local parking availability and congestion. For example, a recently proposed development for an apartment tower in Glen Eden was opposed by the Local Board because of the potential traffic generation.

This is just one example but almost every development in Auckland (and elsewhere) is objected to on the grounds of traffic and parking. Also parking and congestion are a significant justification for the planning rules that limit density in the first place.

On-demand driverless vehicles will remove the real and perceived constraint that parking places on development. And the increased efficiency of driverless vehicles combined with road pricing will undermine using traffic as a reason for limiting and objecting to intensive development.

Electric vehicles will improve the amenity of central suburbs 

A major drawback of living centrally, and at density, in a car dominated city like Auckland is the air quality and noise disamenity caused by cars. The electric technology used in driverless vehicles will remove these problems making inner city suburbs a more pleasant place to live.

On-demand ride services will be better in the inner city than outer suburbs

Driverless technology will not change the fact that trips to outer suburbs will take longer and be more expensive than those in the inner city. And while passengers will be freed from the burden of driving themselves, driverless cars are unlikely to change people’s ultimate tolerance for being stuck in a vehicle for more than an hour.

Though it is difficult to predict what a ride in a taxi-bot will cost, an article in Bloomberg suggests that the average cost could be as low as 44 (US) cents per mile (1.6km). But the cost per kilometre could be much higher in outer suburbs to reflect the reduced likelihood of the vehicle picking up a return fare. So outer suburban travellers will not only have to pay a higher fare to reflect the greater distance, they may also have to pay for it at a higher rate.

The service is also likely to be of a lower quality in outer suburbs, with longer wait times due to the lower density of potential passengers. Higher density inner suburbs will have a larger pool of potential passengers and hence shorter wait times for a ride.


Trying to make predictions about an unpredictable future can be a foolish task, and many of the predictions made about driverless cars have been foolish indeed (Dump the cycleways – how driverless cars will save the world). But the impact driverless cars will have on the development of the city is not inevitable. As always, much of this depends on the policy settings we adopt. Driverless cars will not necessarily accelerate exurban sprawl and with the right policies there is plenty to suggest that these vehicles can complement the intensification of cities well.

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  1. The cists of storage, insurance, and maintenance will be reflected in the hire price. I’m sceptical that the flagfall and per km cost of hiring a driverless car will be much cheaper than Uber is today. The development and operational cost of driverless taxis should not be underestimated. A fleet of service staff are going to be rrquired to clean grafitti and repair damage alone, let alone keep the vehicles running in the road.

  2. Matt Heath writes (in the Herald this morning) that the CRL will be made obsolete by driverless cars capable of going through intersections at 100 km/h. I have concluded, however, that such vehicles are going to be incompatible with inner city streets; there isn’t the space available to accomodate the additional zero-occupant vehicles and pedestrians and cyclists are going to render them completely unworkable.

    I have also concluded that while autonomous vehicles may have a low cost, at times of high demand they will not have a low price. At such times the service will be rationed by price.

  3. Hohoho, so much stupidity is being claimed about botcars, and Matt Heath’s contribution is sadly typical:

    “Trains are the way of the future. Great for the planet and the soul. I’m not talking about the City Rail Link type train. I’ve got a sneaking suspicion that’ll be obsolete by the time it’s finished. What with the coming robotic electric car revolution. How long will it be before computer co-ordinated driverless pods rule the city. Roaming around sensing where you are via app. Just jump in and they’ll co-ordinate, and run straight through intersections at 100km/h. Eliminating human inefficiency, city congestion and accidents.”

    Not gonna happen. Yes AVs will improve efficiency and safety on motorways, but anywhere near you, me, a dog, or any actual uncertainty, these things will grind to a halt. It is clear that in any mixed environment they will be extremely careful, rule-following, even courteous. So yes they will surely make for a much more safe street environment, but not while travelling at 100kph, quite the reverse, they will be dribbling along carefully through urban streets, constantly stopping at the possibility of random acts by anyone or thing. Society, which weirdly accepts human fallibility behind the wheel, and the resultant high death and injury toll, will demand, is demanding, airline standard safety from machines; mistakes or ‘collateral damage’ will not be accepted from machines. And, every time there is a bad outcome, companies making or controlling the things will be sued for every dime they have. So many variables; how long before seagulls, say, work out they can stop them simply by swooping at them?

    There is a stronger case that the arrival of AVs will actually speed the return of streets to people as no one will want to try to get through them in an AV that slows and stops constantly for pedestrians etc. The grade separate realm of the underground passenger train will not be made obsolete by this technology, but will likely be even more necessary and more accessible: botcars, like Uber is already, will be great for the first mile/ last mile leg of the journey in the suburbs.

    1. Matt Health – reasonably funny as part of the Alternative Commentary Collective (and presumably on commercial radio – I don’t listen to him there); knows F-all about transport.

    2. “There is a stronger case that the arrival of AVs will actually speed the return of streets to people” – very strong indeed. The irrational optimism around these vehicles is worrying – especially when it is coming from those in government. My take on them is that they will demonstrate greatest benefit (primarily safety) well outside cities.

      1. Yeah but i think that’s because of where we are on the curve; as they actually start to appear their miraculous abilities will steadily founder on the rock of reality. Laws of physics will not be defeated, etc… nor economics and human nature.

        The further away from being applied a new technology is the more perfect and transformative it can be in the heads of boosters and the credulous.

        It’s much more likely that the changes they bring will be incremental than revolutionary, especially as they can only, at best, slowly be added to the current fleet, and even once ubiquitous will have most effect on the already prepared track of the motorway.

        Anyway given that the trend everywhere, is for city centres to de-car, it is hard to see these things reversing that, as I say above, more likely they will accelerate it. Then that condition will be desired at other centres too: Manukau etc. It is certainly not inconceivable that this will lead to a world where their are no vehicles at all for most of the day in centres; just automated sanitation and delivery bots at set times….

    3. Re Patrick’s comment about a demand for “airline standard safety from machines” it is notable that in the US Department of Transportation Federal Automated Vehicles Policy released this month Appendix II is on the regulatory tools used by the Federal Aviation Administration:

      Re thinking about possible futures with driverless vehicles and shared mobility, the following article on The Future of Mobility that develops scenarios for what might happen is well worth reading:

      1. It doesn’t take too much imagination to picture what ‘fail-safe’ for vehicles means around people. It will surely mean very little vehicle movement indeed. For this reason, driverless cars probably means carless centres, they will be of little use there.

        1. I suspect that you’re partially right here Patrick while a fully autonomous vehicle might baulk for safety reasons in inner cities I think the push will be for vehicles to fall back to driver control in these situations (where appropriate) perhaps governed to a speed of 30 km/h. I’ll even go further an predict that there will be arguments (occasionally successful) that because the speed is low and the AI could still stop gross stupidity that a licence either would not be required or could be reduced to a mere proof of age.

    4. I agree that the technological challenges, particularly around artificial intelligence, probably mean totally autonomous cars will never happen in a complex urban environment. But another good reason it won’t happen is the disruption of car ownership point above. No car manufacturer will develop technology that inevitably leads to selling fewer vehicles. Instead they’ll focus on motorway auto-pilot / lane assist stuff and lots of hi tech PR guff.

  4. Great article, well done. One thing that seems to be missed in many analyses is the prevalence of the white van and truck in the Auckland economy. We will still need our electricians, plumbers, builders etc etc in their work vehicles, even if they are electrified and driven by a bot driver. If you are in southern motorway traffic at 1pm just look around and see how many vehicles are involved in commercial activity.

  5. Interesting article. Yes, it is very hard to predict the impact of various technologies like driverless cars. I think we will end up with more cars and more sprawl.

    But I think driverless cars wont be a silver bullet that some people are suggesting. It still isnt working good enough and they will only represent a small fraction of the car pool for at least another decade or two.

    The first working smartphones came out 20 years ago and its only in the last several years that they have become mainstream. I don’t expect the price of the cars to change, but people will no longer need to drive and can instead be glued to their smart-phones. They can spend even more time in their cars than ever before. I agree we will have to have congestion pricing because otherwise I’ll just get my car to drop me off at peak times for “free” with no need to park. Most people will do it unless there is some disincentive.

    And I think most people will prefer their own private vehicle than PT. It has far more use. Especially in a city like Auckland. I don’t see a time in the future where I can get to all possible destinations by PT.

    I do agree that hiring a self driving car will work in some cases, but it will still be quite costly because Uber doesnt own/maintain/insure their cars, but with some AVuber company they have to own/maintain/insure their own driverless cars. It will probably end up cheaper than the current Uber, but not by much. And it depends on if their service is any good.

    1. “Especially in a city like Auckland. I don’t see a time in the future where I can get to all possible destinations by PT.”

      To me, this is the only problem that driverless hire cars would solve. It’s already cheaper for my partner and I to share a car and supplement with cabs and we have rubbish PT here (Inner ring suburb, Hamilton), with better PT and cheaper and more prevalent uber type cars I strongly feel we wouldn’t need any cars. We would be choosing to own it for pure convenience yet it would probably get used even less than it does now.

    2. Well most cities are not 100% serviced by PT, but Auckland is particularly bad because of how we have developed our suburbs. I still think Uber/taxi is a rich man’s option. It is still ridiculously expensive. I think a driverless car service will still be affordable only for those with a disposable income. Many poor people actually need a private vehicle to survive because they live day to day.

    3. “…but with some AVuber company they have to own/maintain/insure their own driverless cars…”
      Huh, Why would Uber not be able to continue “leasing” vehicles from existing owners?
      Just without the driver component, meaning they could use them for more of the day.

      Let’s say I decide that because I have 6 people in my family, I need my own vehicle because large capacity vehicles are in short supply at particular times.
      So I buy my own, and I let Uber use it when I know I don’t need it.
      If I do need it, I always have priority recall rights on it.

      Yay, extra income stream to help pay for the vehicle.

  6. Here’s another – Driverless cars will either be the destruction of pedestrian and bike-friendly cities, or their saviour. It’s easy to forget that most of the assumed benefits of driverless cars form the traffic engineers’ perspective depend on not sharing space with unpredictable actors like cyclists and pedestrians.

    If we allow the technological capabilities of driverless cars and their manufacturers to drive policy, and assuming we follow our usual path to the future, which is incremental changes to the status quo, then we will end up with cities reshaped to facilitate cars – separation of roads from footpaths, pedestrians and cyclists corralled and grade-separated, and wall-to-wall cars on the surface.

    I reckon we in the transport and city planning world need to make sure that planning for driverless cars is focused around the social benefits that they can possibly deliver. Sprawl isn’t one of them, but making sure that they help deliver walking and cycling cities is. This means pushing for the share model of driverless cars rather than private ownership, if there are capacity benefits on the road network then the argument should be we can now dedicate more space to transit, walking and cycling, and the conflict between driverless tech that slows cars down or stops them when pedestrians and cyclists are encountered should be a trigger for excluding vehicles from pedestrian and cycle precincts like city centres.

      1. “The second is a very low ambition.”

        On the contrary, not everyone lives in cities with access to PT. Cars that don’t kill and maim would, in my opinion, be a huge improvement.

  7. As long as we have the same kind of peaks in demand that we currently have, on demand cars will never make sense as a way to get people to and from work. An awful lot of cars will be required just for the peak period, and with much lower demand during the day, they will mostly sit around idle. So its quite likely that the price per kilometre for an on demand car will be significantly higher at peak, its simple supply and demand.

    The future I predict (although I agree it is almost impossible to predict) will be the end of the private car (except some tradies, etc), better mass transit to get people to and from work, and on demand cars to get people around off peak.

    As for creating sprawl, on demand cars will most likely be charged per kilometre. Even at a very unlikely 44 US cents a mile on peak (lets say about 40 NZ cents per km), if you live 20km from work, it will cost $16 return to work per day. But if you live 5km from work it will cost $4 a day. So $60 per week per person cost difference, or $5700 per year for 2 people x 48 weeks.

    1. That’s why I think that we’ll see more use of the AV cars for last mile solutions like getting to and from transit, or shopping, when you can’t/don’t want to carry it.

    2. How about the AV is just used for the last mile. Instead of being driven 20km by AV to work for $16. Why not have it drive you 5km to the nearest train/bus/tram station for $4 and then pay $4 for the bus/train the rest of the way. Add on another car at the other end if your workplace is too far from train/bus/tram station to walk.

      This way instead of taking up a car for an hour (if you include the time it drives around empty) you are only using it for 15mins so each car can run 4 times the number of trips.

      Finally since there will be few cars going long distances all the arterial roads could be converted to have 1 lane in each direction as a permanent bus lane (or tram if required) providing the increase in capacity for the PT network required.

      This idea assumes that feeder buses would be replaced by AV so you won’t have all those long looping routes and the busses freed up from that are moved onto the high frequency routes (both into and cross town).

      PT = few, high capacity, frequent routes so you never have to check a timetable or wait for long.
      AV = low capacity, on demand so you never have to check a timetable or wait for long.

      1. Yup, that seems entirely likely/desirable. AVs to replace a lot of car ownership (especially 2nd and 3rd vehicles, also complemented by E-Bikes) and low demand PT services, but reinforce core high capacity high volume Rapid Transit.

        After all that is how Uber is playing out already in New York; a lot of Fist/Last mile rides. And Uber and Lyft can be seen as AV-lite.

  8. “The service is also likely to be of a lower quality in outer suburbs, with longer wait times due to the lower density of potential passengers. Higher density inner suburbs will have a larger pool of potential passengers and hence shorter wait times for a ride.”

    I’m not convinced this need necessarily be the case, at least outside of peak times. Think of the level of car ownership in the typical suburban street, with each household often owning 1 or 2 cars. You could instead have half that number of cars parked in any given street and that would be enough for almost instant availability. Surely whatever company provides these vehicles will adjust car storage/parking locations to ensure there’s a maximum average wait across most locations (eg “no more than 5 mins”) and use this as a selling point.

    The exception to this, and the real issue with congestion, is peak time usage. I’m not sure how driverless cars affect peak congestion unless they foster a greater level of ride-sharing. I guess this could occur if people are more open to ride (and cost) sharing in a 3rd party vehicle that they’re hiring by the journey, rather than in their own car where much of their costs are fixed and sunk (ie depreciation, rego, maintenance, etc).

    1. “You could instead have half that number of cars parked in any given street and that would be enough for almost instant availability.”

      I hadn’t really thought of that. But I wonder about the economics of leaving cars parked up in suburbs waiting for a ride when they could be picking up fares in a busier part of town. And if the service provider ensures a minimum wait time surely this would come at a higher price in lower density areas.

  9. I can not see Auckland having Botcars or driverless cars, as the city is to spread out like most medium to large cities in the world.

    Bot/driverless cars are really effect in high density cities, that have been design for this type of transport, which rules most cities in the world. The only city that comes to mind is Singapore, then people there walk or use public transport.

    Bot/driverless cars are economic in compact density populated areas where are ride is under 10kms and where there is high turn over of travellers, as Uber, Lyft, etc have found out.

    1. It’s actually not that spread out. As has been pointed out many times on this blog, that was a myth perpetuated by the pro-motorway cabal to convince Aucklanders that cars were the future and PT couldn’t survive.

      Auckland is actually the 2nd densest city in Australasia (behind Sydney), even though we have worse PT than almost any major Australian city. Much less dense Perth has much better PT services than Auckland.

      The current transport situation in Auckland is not the inevitable product of anything special about Auckland. It is the result of conscious choices made by transport planners and politicians in the 1950s and 1960s. This started with tearing up (literally) one of the best tram systems in the world in 1955 and scrapping a great PT strong city plan in 1949 – practically the same history as Los Angeles, another formerly great tram city.

  10. It doesn’t really help the botcar cause that they keep designing them to look stupid like the first picture. As far as I can tell these cars will at least double the number of trips, one empty car comes to collect you, then you ride in it to where you want to go, then the empty car goes back to where it is supposed to be. As for Uber, how sustainable is a business that exists to undercut taxis by avoiding tax? We can add them the Napster list of daft ideas.

    1. They don’t avoid tax. They avoid regulations that taxi’s have to comply with. I don’t know if they are sustainable though, they are burning through a lot of investor money.

      If it is a pool car taxi company, people don’t really care what the car looks like. But you could get something like a Tesla which looks slightly better.

      And yes, they will double the number of trips. At least mine will. Though after it drops me off at work I will probably send it to park on some nearby residential street along with all the other AVs.

      If the pool car system works well then you will get some benefit. But if everyone buys an AV then things will get much worse.

          1. Yeap, Jezza is right, it’s “avoidance” or “minimisation”
            And it’s not just Corporate BAU, it’s the legally MANDATED behavioural requirement under US law to avoid directors being prosecuted by shareholders.

  11. If there’s a big drop in car ownership that leaves a big opening for PT. Not everyone is going to hire/rideshare/uber a car for every journey.

  12. Could the author of this article answer my question? Will driverless cars detect and avoid cyclists? What if they are computed to avoid another machine, aka a car, but not a human driven vehicle, which does not emit any electronic signals.

    1. I would expect they will be programmed to detect and hopefully avoid cyclists. They will rely on more than just signals, they will also have cameras, there are already vehicles on the road now that have cameras that ensure you don’t rear end the car you are following and also stay in your lane.

    2. Lela, they’re not going to have a black / white distinction over whether you are a pedestrian or a cyclist. They’re running on sophisticated algorithms that evaluate what they are ‘seeing’ and then respond to that event. Hence the guy in the States whose Tesla totalled him into the side of a truck, because it hadn’t been programmed to think of a large white wall as the side of a truck moving out from the kerb. One dead, one more lesson learned. Most of the time, I suspect they will be programmed to come to a screeching halt if a pedestrian walks out in front of the auto-bot, whereas a human driver is more likely to lean on the horn and deliberately swerve at the pedestrian just to “teach them a lesson”. Depends which lessons we teach the bots, as to what they will learn….

    3. “Will driverless cars detect and avoid cyclists?”

      I’m not an expert in the technology – I’m more interested in urban form and how these vehicles might influence that. But I expect the ability to avoid cyclists and pedestrians would have to be a minimum requirement for them to be permitted in cities. Otherwise it would be a pretty bad outcome for our streets.

  13. “If it is possible to get an affordable ride on-demand then why would anyone bother with the storage, insurance, and maintenance costs of car ownership?”

    The projections of cost just don’t stack up. In a comparison with a conventional taxi I can see a substantial saving but in a comparison with a conventional EV not nearly as much. The chief mechanism claimed seems to be better use of capital but these AVs are likely to clock up massive annual distances with a significant proportion being empty running. In other words, they are going to depreciate at a high rate. For many people they will not be available on demand and they will not be significantly less expensive than owning one.

    From a personal standpoint (and as a rural dweller) I see the big advantages being safety (no more drunk, drugged, distracted, incompetant or fatigued drivers) and the ability to decrease the number of cars owned. I can be delivered to my office by 7am and the car can return to take daughter to school, then wife to gym etc. On the down side the empty running is going to have an energy consumption consequence and that has yet to be raised by proponents.

    1. Yes that empty runner issue is likely non-trivial. If used in the way you describe then congestion will be way worse. Won’t you then be incentivised instead to be AV’ed to your nearest Rapid Transit Station for longer journeys, like city office or university, to any of the other Metro Centres on the Network? Congestion Free, ahem.

      This is, after all how Uber is being used in cities with such Networks, such as NY. First and Last mile, especially for dispersed dwellers.

      1. Or you allow your car to be used for car pooling on the way back and it makes 2 or 3 short delivery trips in the right direction along the way. Which pays for the cost of the power on the round trip maybe

  14. “Won’t you then be incentivised instead to be AV’ed to your nearest Rapid Transit Station for longer journeys,”

    We’re undoubtedly in the minority in that the nearest rapid transit is 24 km away and the nearest of acceptable quality, 32 km away. Our regular destinations are all closer than that. There’s a bus service starting up but with a 2 hour frequency and 10 km to the nearest stop I am pretty sure we won’t be using it much.

    I have concluded that I really don’t want to live at a density sufficient to justify conventional PT. I see (initially) EVs and later AVs as addressing our personal transport concerns (congestion isn’t one of them) of safety, emissions, energy efficiency and cost. For occasional trips into urban Auckland I am more than happy to use rail.

    I can envisage a future for many rural dwellers with one owned AV rather than multiple conventional vehicles.

    As for the additional energy demands of empty running seems to have been swept under the carpet like many of the other downsides; reminds me of a couple of renewable energy companies in the US I consulted to; almost every assumption in their models erred on the optimistic side. Neither company survived.

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