The Coming Disruption of Transport

[2transpo]

Does that mean 100% of auto cargo on rail will disappear?

Yes

I am doubtful on this ever happening. This statement means that people living in Gooderham, Gravenhurst, Napanee, TImmins, and Cochrane will no longer be buying cars. This means that contractors that keep heavily tools in their trucks will no longer be buying vehicles. This means that those in landscaping will no longer be buying trucks. I feel that people will always be buying vehicles as the need will be there. If you live in the GTAH or Ottawa you might move down to 1 or no cars, otherwise I doubt that no personal vehicles on the road will happen anytime soon to be relevant.

When car ownership decreases, car production decreases and the traffic takes a hit, probably about 70-80%, but that isn't the whole story.

By when would you say this would happen?

When you have reach the point that all cars are level 4 or at least some level 4 hybrid where override is technically possible, this is where auto traffic on rails totally disappears. At this point, an auto manufacturer will be able to finish their vehicle at the factory, send it off the plant floor and from that moment, the car will deliver itself directly to the consumer. The middle man is cut out.

 

[afransen]

^Saying “people will stop buying autos altogether” is like saying “soon, all apartment renters will buy condos” (or vv). Markets are more complicated than that.

A great many people with a serviceable ICE vehicle will want to extract its full value before switching. Yes, it will be fun to give the AV a destination and chill, but a paid-for vehicle has value. Anyone with a driver’s license is likely willing to keep driving, so long as fuel is accessible and the price differential is not overwhelming. It will be 15 years before those recently built ICE vehicles wear out. As noted, many people will choose to own their own vehicle. (But yes, others will be quite happy to share).

AV’s are coming, but I’m not sensing a tidal wave - yet.

- Paul

People still buy and ride horses, so I don't see private car ownership going away altogether.

 

[crs1026]

When you have reach the point that all cars are level 4 or at least some level 4 hybrid where override is technically possible, this is where auto traffic on rails totally disappears. At this point, an auto manufacturer will be able to finish their vehicle at the factory, send it off the plant floor and from that moment, the car will deliver itself directly to the consumer. The middle man is cut out.

And the customer rejects the delivered vehicle due to stone chips. Somehow I think there will still be a business for car forwarding, especially since an AV won’t make it from factory to customer on a single battery charge.

Much as I dislike car dealers, they do perform useful work when they do pre-delivery setup. Vehicles don’t leave the assembly line in ready to drive condition.

I can’t see the auto industry eliminating aftermarket businesses. Dealers will fight for every last bit of their business, even if (as today) they are a cash cow that doesn’t add much value.

- Paul

 

[crs1026]

People still buy and ride horses, so I don't see private car ownership going away altogether.

The beauty of the AV is the number of different ownership and pooling models that can be offered. If you think comparing cellphone contracts is complicated.... ;-) Some people will own, some people may buy a timeshare style pool share, some people will pay as they ride.
If AV’s enable sprawl, they enable driveways. An AV will be affordable for many in the middle class. And they will have a place to store them.
The only limiting factor on private ownership will be parking. Let’s not kid ourselves.... many places especially in the burbs can and will retain as much parking capacity as exists today. Only in denser areas will parking lots be repurposed to extract value.
The taxi industry has failed to counter rideshare companies, because despite all the new competition they are unable to change two fundamental attributes of taxi’s : poor vehicle condition and driver behaviour/deportment. We should not assume that AV pools will do any better at creating a riding experience that is superior to having one’s own space.
Even today, some proportion of transport expense happens with disposable income. It’s consumer behaviour, and thus partially a function of tastes rather than economics. That will always be the case.

- Paul

 

[afransen]

And the customer rejects the delivered vehicle due to stone chips. Somehow I think there will still be a business for car forwarding, especially since an AV won’t make it from factory to customer on a single battery charge.

Much as I dislike car dealers, they do perform useful work when they do pre-delivery setup. Vehicles don’t leave the assembly line in ready to drive condition.

I can’t see the auto industry eliminating aftermarket businesses. Dealers will fight for every last bit of their business, even if (as today) they are a cash cow that doesn’t add much value.

- Paul

While I agree, it is likely that cars will be floated to point of use (by ship, train and/or by truck), dealers are toast. Their bread and butter service business is going to wither with EVs, nevermind AVs. AVs, the fleet operators are not the suckers that retail customers are. They aren't going to be sucked in by fresh baked cookies and a Keurig. They will be doing maintenance inhouse or by contracted maintenance outfit.

 

[crs1026]

While I agree, it is likely that cars will be floated to point of use (by ship, train and/or by truck), dealers are toast. Their bread and butter service business is going to wither with EVs, nevermind AVs. AVs, the fleet operators are not the suckers that retail customers are. They aren't going to be sucked in by fresh baked cooking and a Keurig. They will be doing maintenance inhouse or by contracted maintenance outfit.

Vehicle maintenance may end up similar to say furnace maintenance - the owner buys a contract, which may be all inclusive, parts+labour, or pay as you go. Certainly fleet owners won't be haggling with service advisors over throttle cleaning, cabin air filters, and wiper blades the way the average car owner does today.

- Paul

 

[afransen]

The only limiting factor on private ownership will be parking. Let’s not kid ourselves.... many places especially in the burbs can and will retain as much parking capacity as exists today. Only in denser areas will parking lots be repurposed to extract value.

This is crazy. You think Walmart, a penny business, will still put in 10 acres of parking if they don't need to? Those 10 acres aren't free--they cost Walmart a lot of money.

 

[afransen]

Vehicle maintenance may end up similar to say furnace maintenance - the owner buys a contract, which may be all inclusive, parts+labour, or pay as you go. Certainly fleet owners won't be haggling with service advisors over throttle cleaning, cabin air filters, and wiper blades the way the average car owner does today.

- Paul

There is essentially no reason for someone with an EV to go to a dealer. Most of the work that needs to be done on an EV could be done at any auto service/repair shop (very occasionally brakes, cabin air filter, wiper blades, tire rotations). And it will be much harder for them to 'find' the $1000 worth of repairs that keeps the lights on for dealers. It is going to be the hunger games for dealerships. They will need to become much leaner and fewer in number if they hope to survive. Tesla has this figured out, which is why they don't have third party dealerships. The legacy OEMs are discovering that their dealers have this figured out, too: they refuse to sell EVs made by their manufacturers. GM recently imposed a 'buy-in or buy-out' deal on Cadillac dealers, where they had to buy into that brand's EV future (at a cost of several hundred grand) or get bought out as a dealer. This is going to be very costly for legacy OEMs to extricate themselves from.

 

[crs1026]

This is crazy. You think Walmart, a penny business, will still put in 10 acres of parking if they don't need to? Those 10 acres aren't free--they cost Walmart a lot of money.

Not on the edge of town, they don't. Sure, put up a few towers or additional stores to increase the density... but we just don't have the zoning limits that would change the value of all those lots. Malls like Yorkdale are the exception not the rule. Even today, Ikea's lots are seldom ever completely full. Lowes? Home Depot? If that land had developable value, we'd see them cutting back even without AV's.

- Paul

 

[afransen]

A lot of parking is dictated by parking minimums. Those regulations are going away with AVs (and in some progressive cities, well before then).

 

[lenaitch]

There is essentially no reason for someone with an EV to go to a dealer. Most of the work that needs to be done on an EV could be done at any auto service/repair shop (very occasionally brakes, cabin air filter, wiper blades, tire rotations). And it will be much harder for them to 'find' the $1000 worth of repairs that keeps the lights on for dealers. It is going to be the hunger games for dealerships. They will need to become much leaner and fewer in number if they hope to survive. Tesla has this figured out, which is why they don't have third party dealerships. The legacy OEMs are discovering that their dealers have this figured out, too: they refuse to sell EVs made by their manufacturers. GM recently imposed a 'buy-in or buy-out' deal on Cadillac dealers, where they had to buy into that brand's EV future (at a cost of several hundred grand) or get bought out as a dealer. This is going to be very costly for legacy OEMs to extricate themselves from.

Perhaps, but there will always be work during the warrantee period. Outside of warrantee work, there is really no reason for owners to use a dealer now, but many do. Most people don't know vehicles and the dealerships market heavily on 'we know what's best for your car'. Even at that, many of the 'mom and pop' shops will struggle to change over their equipment and training to work on EVs and AVs. Manufacturers and dealers have deeper pockets and will be able to available faster.

There is also the issue of proprietary parts and diagnostic. When OBD coding first came out, some manufacturers held the technology closely and it took 'right to repair legislation' in many US states to break that hold. Now it is widely available but not without a fight. In the early days, diagnostic equipment was multiple thousands of dollars - now they are everywhere for under $100.

The same thing is happening in agriculture. John Deere is currently holding proprietary diagnostics and repair on a lot of their equipment, saying that only their techs can do the work. Farmers are having equipment idled waiting up to several days for techs to show up.

 

[MisterF]

This is crazy. You think Walmart, a penny business, will still put in 10 acres of parking if they don't need to? Those 10 acres aren't free--they cost Walmart a lot of money.

I'd say that large amounts of parking will still be required in a TAAS future; all those AVs will need to be stored somewhere overnight when people aren't using them after all. What will change is that the parking won't need to be at destinations, so most parking will be in low value, out of the way areas. Parking in high demand areas like people's homes, workplaces, and commercial areas will be largely eliminated. The acres of mall and power centre parking lots will be opened up for development without needing expensive underground parking, which will reduce the cost of development. What property management companies and condo corporations will do with their enormous underground parking garages is a fascinating question.

If the AV/EV revolution drives down costs as much as people like Tony Seba predict, people who continue to own their own cars will be almost exclusively the very rich. For them, parking will be available as a limited, premium service and will be largely irrelevant to the average person.

 

[afransen]

I'd say that large amounts of parking will still be required in a TAAS future; all those AVs will need to be stored somewhere overnight when people aren't using them after all. What will change is that the parking won't need to be at destinations, so most parking will be in low value, out of the way areas. Parking in high demand areas like people's homes, workplaces, and commercial areas will be largely eliminated. The acres of mall and power centre parking lots will be opened up for development without needing expensive underground parking, which will reduce the cost of development. What property management companies and condo corporations will do with their enormous underground parking garages is a fascinating question.

If the AV/EV revolution drives down costs as much as people like Tony Seba predict, people who continue to own their own cars will be almost exclusively the very rich. For them, parking will be available as a limited, premium service and will be largely irrelevant to the average person.

We will only need perhaps 5-10% current quantities of parking. We only need perhaps 20% of the current number of cars, and we need far fewer parking spots per car (can be upwards of 7 spots per car in a city, that can probably come down closer to 2).

Even if people own their vehicles, they will go to scattered short term dwell locations (like PPUDO lanes at transit stations). AV fleet vehicles can queue up in long ranks, spaced close together, significantly increasing density.

I think parking garages downtown might become loading stations for AVs. The lower levels could become ecommerce distribution infrastructure, perhaps.

 

[2transpo]

From the perspective of freight railroads, this isn't a good future. Finished vehicles and auto parts make up 10% of freight traffic and it is usually well paying.

Over the next 10 years, we will see that all disappear. As auto manufacturing collapses when people move to TAAS, the manufacturing of vehicles will become small and niche, and what traffic for parts remains will likely go to ultra-JIT facilitated by autonomous trucks. Additionally, if the manufacturer chooses to even bother with transporting their vehicles rather than letting them deliver themselves (which makes more economic sense), the smaller quantities and more dispursed distribution will likely find itself better served by road haulage.

The bottom line is that in about 5-15 years, the widely recognized tall autorack is going to go extinct.

 

[afransen]

The bottom line is that in about 5-15 years, the widely recognized tall autorack is going to go extinct.

Even if we go 100% AVs, if they have an average life of 1M kms (seems on the high end without mid-life refurbishment of interior, etc.) we still need to move 20-30% of the cars we do today (assuming current average vehicle life of around 200-300k km). And practically speaking, it probably makes sense to carry cars on larger vehicles to save the wear and tear.