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Peter Tertzakian

Peter Tertzakian

Peter Tertzakian is Chief Energy Economist and Managing Director at ARC Financial Corp., Canada’s largest energy-focused private equity firm. His career began as a geophysicist…

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What Do Driverless Cars Really Mean For Transportation

self driving car google

Headlines surrounding ride sharing apps and autonomous vehicles are nudging into my daily reading list like people butting in front of me in traffic. But I don’t mind. Since the 1970s I’ve been a longstanding reader of future-oriented publications like Popular Science; I enjoy envisioning new-age living through technology.

The potential is admittedly huge. Accordingly, there are a lot of self-reinforcing promises circulating around how our society will change with the emergence of transportation disruptors like ride sharing and driverless cars. Notionally, going from A to B will become more efficient and we’ll all use less energy – regardless of fuel type – on the world’s tens of millions of kilometers of roads.

I’m wondering about all this, the future of transportation, in the ideal thought laboratory: A cramped and packed, sweaty subway car in London’s Underground. If you’ve ridden on the Central Line in the middle of summer during rush hour, you know what it’s like to take a journey to the center of the earth. The experience sharpens one’s senses to personal choice in transportation. But I’ll come to that shortly.

Looking at all the people on the subway with cell phones in their face, I remind myself that disruptive technologies have a history of breaking promises and surprising pundits with unintended consequences.

I remember when word processors on personal computers came out in a big way in the 1980s. Analysts led us to believe that soon we would all be working in a “Paperless Office,” the notion being: Why print anything out when you can call a document up on a cathode-ray screen in front you? Bucking the theory, it wasn’t long before letter-sized paper usage soared. Everyone in cubicles indiscriminately wrote more memos and printed out multiple copies. As well, each print “job” was sandwiched in between two sheets of paper imprinted with useless information like a time stamp and unintelligible network information. It wasn’t until 20 years later, when we ditched tube monitors for flat screens, and adopted mobile devices that we moderated our paper use.

Clearly, the paperless office only sounded good on paper. So what of driverless cars and ride sharing? Are their promises putting the cart before the horse?

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Notionally, more efficient use of personal transportation assets – things like cars and vans – should cut down on the number of vehicles going from A to B, and the ride from A to B should be further optimized by a silicon-brained chauffeur that knows how to take side roads and politely cut in front of people while using as little energy as possible.

Another way to think about this is that people will be offered another A-to-B option that adds to the mix of scooter, car, bus, subway, tram, train, ferry, taxi and of course walking and biking. Places like London and Hong Kong have all of the above, so they are great places to think about the emergence of new modes of transportation – ones that are likely to fall in price over time and undercut many of the alternatives. The question in my mind is, where does: a) ride-sharing; b) driverless vehicles; and c) combo driverless-shared-vehicles, fit into a city’s transportation mix?

The common belief is that personal cars are most at risk of substitution. To me, driverless ride-sharing sounds like a minivan masquerading as public transit. Could it be that these new technologies cannibalize a city’s bus and subway system instead of drivers commuting in pick-up trucks?

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I’m one stop away from my destination. Why did all the people around me (and me too) choose to take a packed metal can on wheels to get to where we want to go? Everyone made a choice by trading off: costs of the various alternatives; time-to-destination; and comfort. In London the tube is cheaper than a taxi and usually faster. A taxi costs more, but is more comfortable and direct. The bus is cheap, but slower. A car is very expensive and difficult to park. And so on. There is a satisfying order to it all. Autonomous driving and ride sharing will upset this cart of choice in all big cities. If it’s cheaper than the subway and more comfortable, I for one will likely call up a heartless set of wheels at the touch of a button. And if everyone does so, we’ll have more road congestion and less energy efficiency.

The subway’s doors open and I jockey around people to get out onto the platform.

In the future, I’m not imagining that the people’s alternative to this underground choreography is a cute little Google car. Recent data shows that if energy (gasoline) is cheap, consumers want bigger, better vehicles all to themselves. A few years from now I can imagine someone saying, “Solar power is free, so what the heck: dispatch me an electric living room on wheels so I can stretch my legs out, have a drink and watch my favourite show as I’m driven home.” To be sure, comfort will be revalued in the cost-benefit calculus.

Exiting the Underground station, I’m feeling uncertain about the consequences of these exciting, disruptive wheel-turning technologies. The future is coming fast, but like the paperless office experience, I’m sensing that “disruptive” won’t necessarily mean more efficient use of resources.

By Peter Tertzakian for Oilprice.com

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  • Bill Simpson on September 29 2016 said:
    The biggest change I see is that you could get things delivered to you without a driver having to deliver it. That has the potential to change a lot by lowering the transportation cost. Want to do some grocery shopping, no problem. Select what items you want on your smart phone, someone (or a grocery robot) selects them, & places them in your waiting car, and it brings them right home. Need a hamburger and fries? Send the car to pick them up. Want a few sheets of plywood? Phone the Home Desperate and they load the sheets on their self driving truck. And within an hour it drives to your address. As soon as you unload it, home to the store it goes. Let it sit there too long, and the charge begins to increase for tying up their vehicle. Drone delivery trucks bring your Amazon stuff to your door with no human driver needed. Cameras on the vehicle watch and record everything and retain the video record for a few months.
    Electric cars could put a real dent in the auto industry. If they were nearly all aluminum, they could last for decades, with only the battery pack and tires needing replacement. The industry would need to build a lot fewer cars, if they lasted three times as long as today's combustion engine powered vehicles. That could put a lot of people out of work!
    Should a significant fraction of the population not want to own their own vehicle, the demand for new vehicles could really collapse. I would pass on a public vehicle with no driver/owner. It could get pretty stinky in there. When you don't own something, you tend to let someone else clean it. And having a vehicle sitting in your garage that you can instantly use is hard to beat. Especially when it is raining, or cold and windy. I'll hang on to the old Expedition for a few more years. With only 139 k, it is only a little over half dead. A full sized electric SUV would be nice.
  • Jonathan on September 29 2016 said:
    What about land use changes? If my car drives itself and I can sit there and work or relax then why wouldn't I move farther from work. The amount of commute time won't matter as much.
  • John Pattinson on September 30 2016 said:
    The assumption here is that the Ubers and Lyfts of the world will be able to provide for an unlimited demand; clearly this would not be profitable. And on the basis of demand led pricing, the cost of a hire for a commute would be prohibitive. Combine that with City's reducing road capacity for environmental reasons, I think (and hope) most people in large European cities, at least, will still be using public transport.

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