I have a new paper published in a special issue on the future of urban transport and mobility systems in the journal Urban Science. This is an open access journal, so the paper is available to all.

The question addressed is the likely impact on autonomous vehicles on urban traffic congestion, a ubiquitous problem that has proved difficult to mitigate. My analysis concludes that little is changed until fully autonomous  (‘driverless’) vehicles are on the streets in significant numbers. There would then be two main consequences. First, by dispensing with the driver, taxis and other public service vehicles would cost less, which would increase demand, drawing people from conventional public transport, but at the same time offering an attractive alternative to personal car ownership in urban areas. Second, individually owned driverless cars would at times travel unoccupied, for instance returning to home for use by others in the household, having taken someone to work. Such unoccupied vehicles would add to traffic and their use might need to be regulated if they worsened congestion, to give priority to occupied vehicles.

There is much uncertainty about the feasibility and timing of driverless vehicles in urban areas, but it is not too soon to begin thinking about how policy should best be developed, to secure benefits from the new technology and mitigate possible adverse impacts.

A recent transport innovation with potentially a big impact is the dockless bike – for hire in urban areas but not linked to a permanent location or installed by or with permission of the local transport authority. Dockless bikes are linked instead to an app on the mobile phone, which allows payment for use, and are installed by entrepreneurs who see a business oportunity.

Dockless bikes have made a striking impact in China, with large numbers flooding the market and huge surpluses piling up – literally, as recent photojournalism in The Atlantic magazine vividly illustrates. Presumably, economic considerations will restore a balance between supply and demand in due course.

A witty follow up article in Slate shows pictures of extensive arrays of dockless vehicles in the US – in this case parked cars.

Another stage on the long-running saga of expanding the capacity of London’s Heathrow Airport is marked by publication of a report from the House of Commons Transport Committee. This considers the Government’s Airports National Policy Statement, which endorses the proposal for a third runway at Heathrow. The Committee goes along with this, subject to quite a number of caveats about environmental impacts and costs.

What struck me were the weakness of the case for a third runway (the Northwest Runway, NWR), as revealed by the Committee’s findings:

Figure 3 on p17 shows that the main impact of the runway would be to increase the numbers of leisure travellers and international transfer passenger. The extra numbers of business travelers are very small, yet the case for the runway is mainly based on the needs of the UK economy.

‘The benefits and costs the NWR scheme are finely balanced. Even small changes in assumptions or methodology could mean that the monetised costs of expansion via a NWR would outweigh the benefits.’ (p19)

While Heathrow is ‘full’ in respect of aircraft movements and landing/takeoff slots, it is not yet full in terms of passenger throughput since each plane is on average only 76% full and is not always an  aircraft with the highest capacity (p40). Luton and Stansted have the equivalent of around one third of a runway to spare through to 2050. This means that passenger throughput for the London airports is forecast to rise by 27% out to 2050 without expansion at Heathrow (p42)

The forecasts  show that an expanded Heathrow would accommodate more than three times more outbound passengers than inbound passengers (p48), a net economic deficit to the UK.

The NWR scheme would only offer only one new destination to emerging and fast-growing economies when compared with no expansion by 2050 (p49).

Airport charges at Heathrow are the highest in the world (p82). Could a further runway be financed without increasing charges, which would erode the economic benefits and deter use?

Assessment

I am struck by the weaknesses in the case for building another runway at Heathrow. A key question for the future will be the ability of the airport to finance construction from private sector investors at a cost – both construction and financing – which the airlines and their passengers will be willing to pay via landing charges. The proposal may achieve planning consent but could prove to be commercially unviable.

Professor Anne Graham and I submitted evidence to the Transport Committee, which argued that the market for air may be more mature than generally supposed, and hence demand growth may be less than projected, with consequences for the business case.

 

The Transport Committee of the London Assembly has published a report on future transport technologies in London, covering Connected and Autonomous Vehicles, App-based services (Uber and dockl;ess bikes) and drones. This is a useful review of the prospects for these technologies, which draws attention to aspects of governance and regulation where the existing framework is inadequate for innovative technologies.

I was recently involved, as a member of an expert Panel, in a study, Older Canadians on the Move, carried out by the Council of Canadian Academies. This had been commissioned by the Federal Government and focused on measures that might be taken to improve the mobility of older citizens primarily for longer distance travel, local travel being the responsibility of lower tiers of government. Nevertheless, we did recognise that longer trips started locally and so were concerned with door-through-door journeys.

The Panel identified three pathways to help facilitate door-through-door journeys for older adults and improve the inclusivity of the Canadian transportation system: advancing human and social resources; advancing technology and infrastructure; and advancing policy. Each pathway has an important research and development and innovation component, whether it be through the development of new technologies or the testing and implementation of research-driven solutions in real-world settings.

I have also contributed a chapter to a book edited by Charles Musselwhite on Transport, Travel and Later Life, on the topic Future Transport Technologies for an Ageing Society: Practice and Policy. Let me know if you would like to see this.

In recent years there has been emerging evidence that the travel behaviour of young people has been changing, characterised by a shift away from car use. The UK Department for Transport commissioned a thorough study from researchers at the Universities of West of England and Oxford, comprising a literature review and secondary analysis of existing UK data sets.

The trend for young adults to drive less than previous generations began approximately 25 year’s ago. Driving licence holding by people aged up to 29 peaked in 1992-94, while car driver trips per person declined by 36% between 1995-99 and 2010-14. This decline is attributed to a variety of social factors outside transport, including more participation in higher education, more lower paid less secure jobs, and delay in starting families. Within the transport sector, the high cost of car ownership and more use of urban  public transport have contributed to declining car use. There is inevitable uncertainty about the future, but the authors conclude that is is difficult to envisage realistic scenarios in which all these future uncertainties combine in such a way as to restablish earlier levels of car use.
US experience
A recent survey of younger people (‘the millennials’, ages 18-34) in California aims to identify the factors that explain why they are found on average to drive 18% fewer miles than members of the previous generation. One report addresses lifestyle and attitudes, a second deals with residential location. Generally, the findings of the UK and US studies seem consistent.

For some years Michael Sivak, of the University of Michigan, has been monitoring vehicle ownership and distance driven in the US. His latest report shows that light duty vehicle ownership per person and per household both peaked in 2006, and that distance driven per person and per household reached their maxima in 2004. (Light duty vehicles are cars plus trucks with two axles and four tires.)

There has been some revival of distance driven per capita in recent years, but I would not expect any long term growth above the present plateau, given both time constraints on personal travel and speed constraints on the road network.

The National Infrastructure Commission has been consulting on a number of questions, including how  the Government could best replace fuel duty in a way that is fair.

 The prospect of a complete switch to electric propulsion for cars and vans will lead to loss of most revenue from fuel duty, currently about £28 billion a year (HGVs might still require taxable fuel), offset to a small degree by VAT of 5 per cent on electricity. Vehicle Excise Duty raises some £6 billion a year, rather less than the annual capital and current expenditure on national and local roads of £8 billion in total. So VED could be raised to cover the full cost of the road system. But that would leave a major gap in public revenues and would, in the long run, imply much cheaper motoring – welcome to motorists but problematic in respect of the detrimental impacts of the car.

To fill the revenue gap it would be logical to levy a charge on the use of electric vehicles (EVs). This would be a charge related to distance, weight of vehicle (which determines damage to carriageway), location and (possibly) time of day (reflecting congestion which imposes costs on other road users). It would also be possible to relate charges to the cost of the vehicle when new, so that the better off road users paid more than those who could only afford a reasonably priced family car.

The public rationale for such a charge would be that it is right that EVs should contribute their fair share of the revenues raised from road users, both to cover the costs of operating, maintaining and developing the road network, and to meet the wider needs of society.

EVs could only be charged for road use once their costs permitted this. At present, the lower cost of electricity goes part way to offsetting the higher capital cost of EVs. However, capital costs are expected to fall as battery technology advances, so that over time cost headroom will develop that will allow EVs to be charged for road use while maintaining their economic attractiveness in relation to conventional vehicles.

Devolution

Road user charging would allow devolution of revenue raising to fund the road system. One tranche of revenue would be taken by the Treasury to support general government expenditure. The remainder would be retained by road authorities to fund their expenditure on roads and other transport provision. The Department for Transport would decide charges for the Strategic Road Network, while local authorities with responsibility for roads would set charges for their networks. There would need to be some coordination of approach to minimise diversion of traffic onto unsuitable roads, perhaps a responsibility for the Office of Rail and Road.

Road authorities would set charges according to their revenue and investment needs: problems with potholes would justify raising charges, as would plans for additional capacity. The income stream from charges could be used to raise finance for capital projects. Devolution of revenue raising to road authorities would largely obviate the need for grants from central government, other than perhaps for regional ‘rebalancing’. If, like London, local authorities chose to manage demand by means of a congestion charge, the revenue could be used to fund public transport. This would provide an important tool to influence the pattern of urban transport.

The London congestion charge is well accepted by the public, is technically reliable and raises useful revenue. It is, however, based on a daily charge for entering the charging zone within the charging hours, regardless of level of traffic or distance travelled. The Mayor’s draft Transport Strategy indicates that consideration will be given to the next generation of road user charging systems, to help achieve policies for mode share, road danger reduction, environmental objectives, congestion reduction and efficient traffic movement. It would be sensible for consideration of technology options to be a joint effort between TfL and DfT, so that London could act as a test-bed for arrangements that are capable for national use in due course.

The technology for road user charging would comprise a digital platform with a vehicle-based device displaying an app. Other facilities could be offered on the device including route guidance to avoid congestion, journey time information, indication of available parking, facilities for sharing trips with those travelling in the same direction, and information about non-car modes of travel where these are practicable alternatives. The menu of options would trade off speed, quality and cost. This technology would allow the operation of the road network to be optimised, reliability to road users to be improved, and the costs of maintenance, operation and development to be recovered through charges that reflect costs.

The National Infrastructure Commission has been consulting on the intended National Infrastructure Assessment. One question concerns what changes to the design and use of the road would be needed to maximise the opportunities from connected and autonomous vehicles on both urban and inter-urban roads; and how could these changes be brought about.

Autonomous vehicles (AVs) are being developed by established car manufacturers and new technology companies. It seems unlikely that there will be much impact on road use until they become fully driverless, when there will be two main consequences.

First, for shared use vehicles such as taxis, the cost of the driver will be eliminated. This will open opportunities for services in the current gap between high capacity, low fare public transport and low capacity, high fare taxis. A variety of door-to-door mobility services using cars or minibuses will draw people from conventional public transport but also lessen the attractions of individual car ownership in urban areas.

Second, individually owned AVs will be capable of travelling unoccupied, for instance returning to base after dropping a passenger, or ‘parking on the move’ by circling the block while the owner is doing business. Such unoccupied trips would add to traffic and may need to be regulated in areas prone to congestion, to give priority to occupied vehicles.

As regards the impact of AVs on the capacity of the road network, the above consequences would be expected to increase demand and thus congestion. The question then is the scope for increasing capacity through connected autonomous vehicles (CAVs) operating with shorter headways, with or without drivers available for some tasks.

Trials are planned of platoons of freight vehicles, the main benefit being fuel saving from reduced air resistance. There will be drivers for each vehicle who will be trained and required to operate with a very short headway. However, the generality of drivers of AVs will be able to choose the gap to the vehicle in front. It is not clear why, without an incentive, they would choose a gap smaller than that with which they are comfortable, which may not be much different from current headways.

Accordingly, to increase road capacity by reducing headway there would need to be some incentive that would impact on individual drivers. This might be a road user charging regime that charged on the basis of the length of carriageway effectively occupied. However, drivers willing to ‘tailgate’ would pay less than those of a more cautious disposition, which would raise a question of public acceptability.

Another kind of incentive to reduce headway would be dedicated lanes that are less congested and faster flowing than other lanes, analogous to High Occupancy Vehicle lanes on US freeways. Short headways would need to be enforced. A faster lane for CAVs would need to be the outer lane, requiring vehicles to manoeuvre prior to leaving at a junction.

There would need to be acceptable incentives for drivers to reduce headways if manufacturers are to go beyond equipping vehicles with the existing adaptive cruise control. Manufacturers will be responsible for the safe functioning of AVs. Adding vehicle-to-vehicle or vehicle-to-infrastructure connectivity to reduce headway would exacerbate this responsibility by introducing functionality that depends on that of other manufacturers and suppliers and that increases the risk of security breaches.

More generally, connected vehicles operating at short headways would require reconsideration of the safety regime, which at present is concerned with the performance of individual vehicles, having regard to the nature of typical crashes. A system of connected vehicles would require consideration of fault modes at system level, for instance the consequences of faults in individual vehicles in a platoon and of faults in connectivity. It would not be surprising if there were trade-offs between headway and safety that limited the possible increase in capacity.

The Strategic Road Network (SRN) of motorways and major interurban roads is a mature system, with investment aimed mainly at increasing capacity by utilising hard shoulders as running lanes, plus junction modifications. Few wholly new routes of any length are planned. Mixed traffic will be the norm for many years to come. Distances between junctions are relatively short, compared with other countries. Space is scarce for forming up platoons of freight vehicles. So the SRN is not obviously well suited to pioneering short headway CAV operation, despite the Government’s enthusiasm.

Likewise, Britain’s urban roads substantially reflect historic street patterns, unlike more recent US gridiron layouts (of which Milton Keynes is a rare UK example). Narrow inner suburban streets with on-street parking are likely to prove awkward for driverless taxis, which would inhibit their general use.

Road traffic congestion arises mainly in or near areas of high population density and high car ownership, such that many potential car trips are deterred by the prospect of unacceptable time delays. Were capacity to be increased by connected vehicles operating with shorter headways, more car commuting would result, with more vehicles entering cities – not a desirable outcome given that car use is declining in successful cities. Increasing road capacity through vehicles operating at shorter headways is not fundamentally different from increasing capacity by adding carriageway. Through neither approach can we build or manage our way out of congestion.

Altogether, it does not seem a high priority for Britain to attempt to be an early adopter of connected vehicle technology. We should evaluate developments elsewhere, aiming to be a fast follower if there were to emerge benefits that could be gained under our conditions. On the other hand, there are good reasons to press forward with electric propulsion and digital technologies, including road user charging, where UK geography and institutions provide a favourable context.

The National Infrastructure Commission has now announced a competition with up to £200,000 available for ideas to change road design, management and use, to maximise the benefits of connected and autonomous vehicles. I will be interested to see if any proposals that result lead me to revise my somewhat pessimistic judgement.

Uber’s buccaneering entry into regulated taxi markets in many cities prompts questions about the purpose of regulation and who benefits. While there is little academic literature on the topic, a 2016 paper* by Harding, Kandlikar and Gulati, focused on North American taxi markets, is illuminating. It is argued that the case for regulation is based on the view that the taxi market suffers from three problems: ‘credence good’, open access and thin market:

  • A credence good is a good or service whose quality cannot be determined by the consumer until after it has been consumed. Questions about reliability of a taxi service may deter users who may be concerned about excess charges or a poor quality vehicle. Regulation that sets standards for quality and price overcomes such market failure.
  • Open access to the market may attract large numbers of new entrants on account of low costs of entry. Given limited demand in the locality, earnings of drivers would fall, increasing the incentive to illegitimate charging and poor vehicle maintenance.
  • A thin market has a small number of buyers and sellers, which reduces the chances of matching supply and demand. The taxi market is thin in that it is geographically dispersed. Regulation of fares prevents exploitation of users when demand exceeds supply.

The entry of Uber and similar ride hailing platforms impacts the taxi market in a number of ways:

  • Barriers to entry for drivers are lowered, and users are attracted, shifting a thin market to a thick one.
  • Fares flex according to demand but are specified before the trip is undertaken. Surge pricing attracts drivers to meet peaks of demand.
  • Quality rating of both drivers and passengers, plus predictable fares, helps ensure consistent standards of service.

Thus the platforms address the shortcomings of traditional taxi markets that have justified regulation, effectively removing two of the rationales for taxi regulation, and largely mitigating the third (open access), Nevertheless, the implications of competition between platforms are as yet unclear. Competition could lead to instability on both supply and demand sides, which could result in collusion by platforms, to the disadvantage of drivers and passengers; while lack of competition may result in monopolistic pricing.

The paper concludes that regulators should allow the ride hailing market to grow and focus on the possibilities of future monopoly and of collusion between platforms.

*Taxi apps, regulation, and the market for taxi journeys. Transportation Research Part A: Policy and Practice, 88, 15-25, 2016.