Why driverless cars may mean jams tomorrow

By The Economist online….

THE most distractingly unrealistic feature of most science fiction—by some margin—is how the great soaring cities of the future never seem to struggle with traffic. Whatever dystopias lie ahead, futurists seem confident we can sort out congestion. If hope that technology will fix traffic springs eternal, history suggests something different. Transport innovation, from railways to cars, reshaped cities and drove economic advance. But it also brought crowded commutes. Now, as tech firms and carmakers aim to roll out fleets of driverless cars, it is worth asking: might this time be different? Alas, artificial intelligence (AI) is unlikely to succeed where steel rails and internal-combustion engines failed.

More’s the pity. In America alone, traffic congestion brings economic losses estimated in the hundreds of billions of dollars each year. Such costs will rise unless existing transport systems receive badly needed investment. For example, fixing New York’s beleaguered, overcrowded subway will take at least $100bn, according to one recent estimate. A driverless deus ex machina might seem to spare governments some difficult decisions.

But congestion is a near-inevitable side-effect of urban growth. Cities exist because being near to other people brings enormous advantages. Proximity allows people to find friends, mates and business partners, to discuss ideas and generate new ones, and to trade (and so to capture the benefits of specialisation). Regrettably, clumping leads to crowding: the more people an area houses, the greater the competition for its scarce resources, from seats at a hot new restaurant to space on public roadways. Each new arrival enhances a city’s magic but also adds to congestion. Cities grow until costs outstrip benefits.

New transport technologies are not useless. Mass-transit railways and highways allowed big cities to get bigger. But their congestion-easing benefits inevitably proved temporary. When the New York subway extended into northern Manhattan, it became practical to live far from the dirty, expensive, crowded downtown area, while still enjoying access to the city’s social and economic benefits. So the city’s population rose—a lot—leaving New Yorkers once more cheek by jowl. A post-war highway-building boom in America yielded explosive growth in city suburbs. Cities once again found their equilibrium, however, as the suburban land-rush led to road congestion, raising the cost of living far from employment centres. In a paper published in 2011, Gilles Duranton, of the University of Pennsylvania, and Matthew Turner, of Brown University, identified a “fundamental law of road congestion”: namely, that building more highways does not alleviate congestion. Rather, it attracts more residents, leads to more driving by existing residents and boosts transport-intensive economic activity, until roads are once again crammed.

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Category: Business and finance, Approved, Finance and economics, FINANCE

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