Autonomous Car Pricing Will Turn Your Town Into A Science Experiment

In a future driven by shared autonomous vehicles, transportation becomes a utility. The name of the game is efficiency — you pay for what you use, and how you use it. No car ownership, no car insurance, no maintenance, no gas, no driveways or garages… you pay for a ride from A to B, and when you get out, you’ve washed your hands of the investment.

But all those things have a cost, so it must mean someone else is coughing up the dough, right? In the case of present-day rideshare services (known as Transportation Network Companies, or TNCs) like Uber and Lyft, the fixed costs of fuel and car maintenance and driver fees are baked into your fare without calling out the fees specifically. There are base fares, booking fees, per minute and per mile rates. With the exception of Surge pricing, TNCs throttle their pricing models in a rather opaque manner.

It’s assumed you like it that way. Knowing what portion of your fare goes into the driver’s pocket or towards fuel expenses is unnecessary info, and part of the convenience with on-demand transportation is the fact that it’s some other schmuck’s job to figure all that out.

Fair enough. But imagine an entire transit grid running through on-demand, shared resources. Then imagine that the entities managing it may include federal and local governments, car makers, telco and media conglomerates, Google, Amazon, etc. A mere tweak of your fare could be covering the tax for a new bridge, or rewarding you for buying a product during the trip, or contributing to donations for the ACLU. Such are ideas we usually draft up as legislature, enforce through police, or educate the public on; you’d want to have an idea of where your money goes in those instances, correct?

Let’s find out.

At any given moment, the future transportation grid will have dozens of opportunities to charge (or reward) your choices based on how they affect the efficiency of the grid and the pockets of the companies who manage it — the latter traditionally being disinterested in showing any transparency.

Maybe the moving picture above is more than you care to swallow when thinking about your transportation costs, but I’m a transparency kinda guy. I believe you should have information, and more importantly, have the obligation to think critically about it. Ready to use your imagination?

Base Rate

Hey look, we’ve started with something that is actually happening today! Massachusetts is considering a bill to charge driverless cars by the mile. Why do you think they might do that?

Are they equating autonomous cars with electric cars, since the latter obviously don’t contribute to the Gas Tax — a very appropriate tax to discuss in this article, since it was so poorly thought out that its funding is inversely proportional to driving more efficient cars? Autonomous cars will likely be powered by alternative fuels like electricity, but there’s no reason they can’t be gas-powered. So, that’s a strange bill to write. Perhaps they have another agenda behind the bill… one that grants them access to consumer data.

Bill or no bill, the Base Rate has a lot of potential to influence how traffic moves. In all likelihood, some hybrid of per-mile and per-minute (as TNCs currently utilize) seems the best way to go, but consider that a per-mile only rate might dissuade stakeholders from urban development, while a rate tied to per-minute operation would dissuade the development of high-speed roads and urban sprawl.

Empty Trip

Since we’re talking about urban density and sprawl, we should definitely talk about Empty Trips. Known also as a Zero Occupant Trip, this is a major cost incurred by shared transit services like taxis and TNCs: you request a ride out to East Bumblefudge, where there isn’t going to be anyone waiting to hail that ride back to civilization. Effectively, you’re creating two trips, but only paying for one. That’s why taxi drivers often refuse to take you out to the boondocks. They’ll have a long, expensive trip back before they can find a new fare.

Obviously, there are smarter ways to solve this problem than simply refusing to pick you up. But deciding who pays for the empty trip could be the most significant factor in urban development since… well, maybe ever.

If the User (that’s you) is on the hook for empty trips, making a home in the remote suburbs might be a tough go, with most of your rides looking like the graphic above, and costing an extra 50% or more to cover the inefficiency. Maybe that means more ride-sharing and mass transit for you.

On the other hand, perhaps the TNC covers your empty trips. The fight over which companies will own the grid (and consumer’s information, and their attention) is bound to yield “freebies” to users in the same way Gmail is a freebie: they’ll gladly cover the cost of your inefficiency as long as they get something in return — the authority to show you ads, or download your in-car conversations, or force you to use their messaging service while riding… who knows what those crazy kids in the Valley will think up. Companies could replace sports teams as the local religion, with all the residents of rural Detroit owing their low-cost transportation allegiance to Ford, while the outskirts of Austin are filled with Google loyalists.

Or, it could be that your local government subsidizes empty trips as a means of combating high rent downtown, or enlarging the city’s footprint to attract real estate developers. Maybe the housing developers themselves would provide subsidies. In either case, the growth of suburbia would be heavily promoted… at least, until those parties change their minds.

Lastly and perhaps most interestingly, you might find yourself in a situation where your empty trip fee is magically relieved by Walmart or a local pizza shop. Unbeknownst to you, there was an auction running on the empty trip, and every business operating a shipping service in the vicinity of your drop-off point had an automated bid posted to the auction in hopes of grabbing a low-cost delivery driver to take their package to its next destination. Pizza saves the day, yet again.

Ride Share

Ride sharing! I can already hear that collective sigh from everyone who doesn’t live in San Francisco.

Like it or lump it, turning personal vehicles into mass transit tools is a huge part of the revolution in transportation efficiency. And, if you do indeed “lump it”, then this article is for you.

Remember, what we’re talking about here is the efficiency of the grid’s operation — but that doesn’t have to mean everyone live as efficiently as possible. It just means inefficiency will cost you. Hate the idea of sharing your trip? Your user profile could demand that rideshares be disabled, which would in turn penalize you with a higher fare. Passengers more amenable to ridesharing could enable the option and save money with every mile, even if no one’s in the car.

Take it further? Why not. If you’re willing to share a ride with a pet, or a bunch of packages, or a group of kids going to school, you save even more during your trip. The less privacy and space you need, the less you pay. It’s one of several examples where the meek shall inherit the wealth, while the status symbols of affluence become less aspirational and more despicable.

Congestion

Who causes traffic congestion? Grab a mirror and take the hint.

Your very existence on the roadways, let alone your behavior, contributes to congestion… and congestion is the nemesis of efficiency.

Like ride sharing, a congestion fee is a useful way to educate users on how their choices impact society at large. Many of the decisions drivers make today could be thrown into this bucket (hence the appearance of a multiplier in the graphic.)

Should you want to ride in the fast lane, the grid could clear other cars out of the way and charge you per second for the inconvenience — and in turn, reward the other cars’ passengers for the inconvenience you caused them.

Perhaps it’s even more costly for you to stop all vehicles at an intersection so that your car can make a split-second u-turn based on new directions you provided. It all depends on how much you’re willing to pay for your needs to be prioritized. Hell, in a future of autonomous transportation, we don’t need dedicated lanes on the road. You could select a route that takes you upstream against all other traffic, if it turns out that’s the fastest way for you to get to Point B. It’d be a crippling fee to do so, but you could do it.

All this assumes that you’re the one paying congestion fees, but that’s only one side of the coin.

Do you really want to be on the road at 6:12pm on a Tuesday? No, you do it because your job tells you to. And in a world where traffic costs can be attributed to quantifiable microfee levels, it wouldn’t take much to have your government penalizing the company for requiring standard 9–6 hours. The possibility of having fees levied against businesses for causing congestion could make for very interesting decisions around remote work, parking, operating hours, and even hiring practices.

Multimode Incentive

When autonomous vehicles hit their stride, the service operating on the grid will transcend the means. Cars, pods, shuttles, buses, trains, bikes, scooters, maybe even drones… they’re all components of the service model. The right tool for the job, if you will.

So, it follows that getting people out of cars — and into mass transit or zero-emissions transit — would be a major priority. Present-day incentives to push people towards mixed mode transportation are pretty ham-handed, but that will change with the introduction of real-time pricing.

Should you require a car from door-to-door, you’ll pay a full-fat fare — perhaps even see a penalty for straining the system. However, if you’re willing to bike to a rideshare point or train, the grid will know, and could reward such behavior with a lower rate once you do hop on the train. Being open to re-routes and delays for the sake of the greater good nets you even more savings.

What makes this functionality so valuable is the ability to validate a market for alternative transit without having to front infrastructure investment. In America, that’s huge because, well… we really hate mass transit.

Rather than spend decades on a transit project campaigning for funding, developing the infrastructure, and marketing it to viability, a multimode incentive could gauge public interest before the project even begins. Offer a fare discount to walk, bike, or share rides along the routes where your project is planned, and the turnout will tell the tale. Rinse and repeat.

If you want to know whether a transit project in America is feasible, you don’t set up focus groups — you see what it takes to get people to actually step out of their cars.

Route Management

Great, so we’ve got a million ways to slice your transit costs based on efficiency. But who’s doing the slicing?

Tech companies, corporations, governments, and investors all want a piece of this multi-trillion dollar market, and most for reasons more valuable than mere profit. Of course, there’s an inherent distrust in allowing one company to hold total control over the grid; on the other hand, information access suffers as the management splinters, which decreases the quantity and quality of insights.

What we really need to see is something rarely witnessed in modern society: fully transparent, altruistic collaboration among stakeholders. This isn’t a battle — and if it is, it’s a battle we’re all fighting against inefficiency. Hold yourself and others accountable to choices that yield transparency, and the transportation revolution will thrive. Don’t settle for the status quo… it has no imagination.