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Reinventing Auto-Mobility

All the transportation trends indicate that if we keep going in the direction we are going with regard to the level of investment in transportation infrastructure and the kinds of technology that we bring to bear for improving the automotive infrastructure, then an outcome of perpetual, increasing gridlock on more and more of our highway infrastructure is inevitable. The way out of this otherwise ineveitable problem is for us to reinvent the concept of auto-mobilituy and in particular bring to bear technologies to automobiles that we’ve done in so many other areas in terms of automation and this presentation is to look at the economic case of how such a reinvention of automobility might be implemented.

Wealth and Mobility

First it is helpful to look back at the rather extraordinary relationship between the growth in per capita wealth and the parallel, almost matching rate of growth and trend of growth in automobility per capita; that is to say, the vehicle miles of travel per capita. What we see in the trend data taken from US census data is that both the per capita GDP and the per cap VMT have increased over five-fold from levels in the mid-1930’s which is the earliest period for which we have data available. Now this is an extraordinary correlation between two trends and the relationship between the two is not happenstance. It’s not that we get more money and therefore we drive around; on the contrary, the relationship is in fact that the availability of personal automobile travel is a powerful productivity enhancement in optimizing resource allocation in the economy – in the US as well as other developed economies. The economic impact appears on multiple fronts. First and foremost the automobile is a powerful productivity tool for the labor market. That means that for a given individual the number of jobs that they can apply to, that they can reach everyday via an auto-assisted commute, is several orders of magnitude greater than it would be if they were limited to locations they could reach on public transit, on bicycle or by foot. This is because they can go a greater distance in almost any given direction. So they can go to all those employment opportunities that would otherwise be unavailable to them if they were limited to transit, bicycle or their human mobility.


Similarly, employers are able to draw from a vastly larger pool of labor. What this means of course is that employees can seek out the jobs for which their particular skills are going to get the highest rewards; conversely, employers can seek out the employee that offers the highest level of skills for the amoung of reward that they are willing to pay in terms of wages and benefits. So this means the distribution of labor is optimized far more effectively than would be the case without automobiles.

There are other major avenues through which auto-mobility has a favorable impact on the economy. The ability for free and unfettered travel on the highways is a big boon to businesses; it permits them to handle their management of services, deliveries and inventories in a way that would be much different if they didn’t have greater mobility. It permits the phenomenon we witnessed in the last couple of decades of the 20th century of just in time inventories, whereby businesses are able to manage the use of their supply lines in a way that minimizes the amount of supply they have to have in the pipeline per unit of output. This benefits businessees economically through higher profits and the ability to offer lower prices.

Finally, there are substantial benefits to consumers, whose spending accounts for approximately two-thirds of our economic activity. They can avail themselves of greater shopping opportunities. The phenomenon of the big box retailer is made possible by the automobile. Auto-mobility allows consumers to travel further to shop for big ticket items, like automobiles, furniture and appliances, at the best possible prices. Vendors can thereby locate themselves in places where they can minimize their property costs while maximizing their reach to potential buyers. Consumers also enjoy better access to health care, to education opportunities, to a greater range of entertainment and dining opportunities. The scope of available opportunities and choices are multiplied many times because this means of transportation is readily available.

Transit and Mobility
As a side note, per capita pulic transit trips (primarily buses, light rail and heavy rail) have declined two-thirds since the 1930’s. This stands in stark contrast with the greater than five-fold increase in vehicle miles of travel per capita over the same period. This isn’t to say that public transit doesn’t perform an important function in our economy and society: it offers efficient transportation in certain corridors and provides mobility to many who cannot avail themselves of auto-mobility for whatever reasons. We certainly experience the impact it has on our lives when for instance transit workers go on strike, as happened before Christmas, 2005 in New York. Still, the long term trend is significant, going back
at least 70 years. The reason is that whenever possible, people have chosen auto-mobility because it is – in most places – a much more effective tool for getting from where I am to where I want to go in one trip with the least cost and the least time.

The point of considering the long term trends in public transit is because proponents often offer it as an alternative way to address the problem of gridlock. However, transit trips make up less than 2% of all the trips that we take – not surprising in light of the sustained decline in transit trips per capita over the

last 70 years. Despite an enormous investment in capital and operating subsidies over the past 20 years, there has been little effect on transit’s share of trips. Even if somehow we could double or even triple transit trips from today’s level, they would still comprise less than 5% of today’s trips. Given that auto trips are expected to rise 35-40% over the next 25 years, transit’s share of total trips will likely continue to decline. Clearly, people prefer auto-mobility in almost all circumstances. Public transit will continue to play an important role in our overall transportation environment, but we cannot look there to have any significant impact on the gridlock problem.