DEBATE: Should cities prepare for a future of self-driving cars?

  • Two experts from the Mercatus Center recently debated what state and local governments should do to prepare for the proliferation of autonomous vehicles.
  • Writing in favor of building for autonomous vehicles, the first expert argued local governments should invest in a relatively restrained range of “dumb” infrastructure like utility poles.
  • Writing against building for autonomous vehicles, the second expert warned that high-tech infrastructure investments in the industry will probably become outdated by the time they are constructed.

Autonomous vehicles (AV) are hitting the streets in increasing numbers as car companies race to develop self-driving cars and roll out “smart driving” features on their latest models. Due to the massive potential benefits of AVs, such as a huge reduction in traffic accidents and expanded accessibility to the elderly and visual impaired, most industry experts believe it is only a matter of time before AV technology and services revolutionize the transportation industry.

For lawmakers, city planners, and policy experts, this has given rise to a debate over what state and local governments should do to prepare for the massive changes to mass transit that AVs portend. Many states and municipalities, for instance, have already begun building “smart streets” to provide AVs with more information about roads and potential hazards.

To encourage the debate, the Mercatus Center, a university-based research center for market-oriented ideas, recently ran a two-part series by research fellows Brent Skorup and Emily Hamilton discussing the future of AV infrastructure and what cities should (or shouldn’t) do about it.

Why cities should build for AV

Writing in favor of developing transportation infrastructure for AVs, Brent Skorup took a measured approach, offering two basic suggestions for what policymakers can do to encourage private innovation in connected cars and smart cities.

First, he recommended that cities study and plan for the development of AVs. Since most people will soon find AVs to be safer and more convenient than traditional cars, he said, road infrastructure and even the rules of the road will have to change to accommodate and spur the development of self-driving cars and vehicles.

Second, rather than choosing the specific wireless technologies to install along roadways and on cars, Skorup argued that local governments should invest in “dumb” infrastructure that is capable of supporting a variety of different technologies and IT providers. By this he meant “passive, long-lasting infrastructure like light poles and utility poles.”

Even the staunchest free-market advocates, Skorup noted, believe that roadways require public management such as the current system the U.S. has today. Government control of public rights-of-way alongside roads has paved the way for all kinds of commercial activity like electrical utility, phone, and cable TV distribution networks, and newer technologies like “small cells” and 5G devices require similar access to these spaces. Building out the infrastructure to make this possible — without committing to a specific IT contract — makes more sense because the assent is useful for a longer period of time.

Investing in dumb infrastructure also has the benefit of letting cities keep their options open to the best technology of the moment, argued Skorup.

“Passive infrastructure means that if one device maker fails to find a market, the right to use the infrastructure can be transferred to another innovator,” he wrote. “Just as no one predicted cellular networks would — after several iterations — spawn smartphone, ridesharing, and homesharing markets decades later, no one knows which smart road applications will develop and which wireless technologies will win the day.”

While cities can be prone to misreading the marketplace and making bad choices about what infrastructure to invest in, Skorup said this is no time for “planning paralysis.” By studying transportation trends and learning from the past, cities can take meaningful, impactful steps to pave a smooth road for the widespread adoption of AVs and connected car technology.

Why cities should beware of building for AV

In her article against building infrastructure for AVs, Emily Hamilton focused most of her wariness on building municipal “smart streets” that deploy sensors, fiber optic cables, and other new technologies to aid autonomous and smart vehicles with data collection and sharing. This, supporters say, would allow AVs to develop at a faster rate than the industry alone might achieve, and it would make cities and roadways with such infrastructure more attractive to AV developers and manufacturers.

The first problem with this, Hamilton said, is that such investments in the industry will probably become outdated by the time they’re constructed.

“As cities are just beginning to develop plans to install sensors that allow for vehicle-to-infrastructure (V2I) communications, private industry is already circumventing the obstacles smart streets are designed to address,” she explained. “By the time cities build smart streets, AV companies will likely have leapfrogged municipal technology.

For example, the system of cameras and sensors that allow AVs to “see” the world once presented serious limitations to what the vehicle was able to perceive, especially in adverse weather conditions. Now, however, AVs have lidar sensors that can “see” 200 meters ahead, and companies are well on their way to improving these sensors so that they can function in rain and snow. Similarly, Hamilton pointed out that the once-prohibitive cost of onboard sensors, which could be aided by building fixed in-street sensors, has fallen 90 percent from the roughly $150,000 worth of sensor technology on the original Google car, and manufacturers are aiming for a price of just $500 for future vehicles.

The second problem with municipal investments in smart streets, Hamilton argued, is that it could entrench government involvement in the development of transportation rather than allowing opportunities for voluntary transactions to drive development more effectively and efficiently. A history of “enormous cross-subsidies,” such as tax dollars from drivers that help fund unrelated transit projects, she said, has had the unforeseen effect of making driving too costly for many Americans.

“We can’t foresee how smart streets might shape the transportation options of the future,” Hamilton wrote, “but the American history of determining how we can move through our cities provides reason to be wary of engineering around a new technology.”

Instead, she recommended exploring new options for pricing roads in light of widespread AV use, with a focus on reducing the cost of time-wasting traffic and curtailing overuse and congestion.


In the end, these positions do not seem to be diametrically opposed to each other so much as they emphasize different aspects of the future of transportation. Both Skorup and Hamilton were wary of local governments picking winners and losers and projecting too much into the future when making infrastructure decisions in the here and now. Instead they both recommended— in different ways — that local governments give the industry freedom to develop efficient and cost-effective innovations with AVs.

Read their full arguments at the Mercatus Center: Part One (cities should build) and Part Two (cities should not build).

Image Credit: “Highway 110 – Los Angeles, United States – Urban photography” by Giuseppe Milo is licensed under CC BY 2.0

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