Paris is set to host the 2024 Olympic Games. When the Games begin, Olympic visitors in Paris will see the first post-car city, according to the Financial Times.¹

Picture a city where traffic congestion is a mere blip on the radar, where serious accidents are as rare as a leap year, pedestrians rarely miss a transit connection, drivers quickly locate an open parking space, and traffic officials know precisely where and when to dispense road crews. A fantasy for now–but perhaps not for too much longer. Information and communications technology is poised to revolutionize transportation, potentially spurring vast improvements in mobility, safety, and environmental outcomes in the next decades. What will these developments mean to cities and their revenue streams, and how will all this connectivity be funded? The road is far from being clearly marked, but some signposts have started to appear that may help communities sketch out their course.

From here to there

The future of transportation will likely evolve around the three following vectors:

• Make cars drive themselves (Automated Vehicle Systems or AVS)
• Connect cars to each other (Connected Vehicle Systems or CVS)
• Connect cars to the infrastructure (Intelligent Transportation Systems or ITS)

Today’s cars increasingly feature driver-assisted components such as collision avoidance and blind-spot detection that rely on cameras, radars, or light-based sensors to help drivers navigate the roadways. As innovative as these features now seem, they are likely to be viewed as distant forerunners of the autonomous vehicles of the future.

Wireless connectivity like cellular, Wi-Fi, and dedicated short-range communications (DSRC) can be used to connect cars to each other and allow vehicles to seamlessly “talk” to other vehicles without the drawbacks of camera or radar sensors that rely on line of sight. Wireless technologies will allow vehicles to receive data faster and over longer distances than other technology.

The technology can also connect vehicles to the infrastructure. We will see the rise of intelligent transportation systems in which electronics, communications, and information processing are used to improve the efficiency and safety of a surface transportation system.² ITS would likely be developed and operated by a public or quasi-public organization.

Planning for Connected and Automated Vehicles: Greater Ann Arbor Property Initiative; Prepared by Public Sector Consultants and Center for Automotive Research, March 2017

Whether connected, autonomous, or both, the goal is to develop a vehicle that can use technology to improve safety, efficiency, and mobility. The National Highway Traffic Safety Administration (NHTSA) estimates that vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) safety applications could eliminate or mitigate the severity of up to 80% of non-impaired crashes, including crashes at intersections or while changing lanes.

Data-rich information about changes in traffic lights, congestion, or accidents, which can keep traffic moving, could put a dent in fuel consumption and time on the road. The Texas A&M Transportation Institute estimates drivers in nearly 500 urban areas spent 5.5 billion hours of extra time and 2.9 billion gallons of wasted fuel sitting in traffic in 2011. Information about parking availability could also reduce needless circling to find an open space and help lower the transportation’s contribution to greenhouse gases, which was 27% of the total in 2015.

Happening now

Testing of self-driving cars in a structured environment has already started. Some speculate that by 2020 highly autonomous cars are expected to be on the road, auto ride sharing is expected to be a fixture in some limited locations like college campuses, and urban planners will need to consider different types of transportation.

Federal officials have also gotten behind this technology. In 2016, the U.S. Department of Transportation issued a proposed rule that would mandate V2V communications in light vehicles and promote, though not mandate, the use of DSRC as part of federal motor vehicle standards. NHTSA has also developed a policy statement for safe testing and deployment of new auto technologies, which includes a 15-point safety assessment for manufacturers and developers of automated vehicles and a model state policy to distinguish between state and federal responsibilities. In January 2017, the Federal Highway Administration released guidance on V2I.

Activity at the state level has varied significantly. Nevada was the first state to authorize the operation of autonomous vehicles in 2011. As of October 2017, 21 states and the District of Columbia have passed legislation related to autonomous vehicles.³

Whether the nation’s transportation system develops into a seamless network of roads and highways crisscrossing the nation where cars can travel unimpeded or in isolated corridors of traffic patterns may depend on funding as much as technology. The National Highway System, which includes interstate highways as well as those of strategic importance, does not have the authority to mandate the design of state and local roads. But for states and municipalities to receive federal funds, they must comply with federal road standards, which could serve as an additional incentive to adopt connected and automated technologies.

Impact to the local community

Enormous improvements in transportation are within reach, but for these gains to be fully leveraged, local municipalities will need to start considering a range of issues that cut across technology, infrastructure, budgeting, zoning, social balance, and risk management among others.

• Connected vehicle infrastructure. These elements typically focus on deploying roadside communications equipment, installing a fiber backbone in roads, implanting street and traffic signals with sensors or other connective devices, expanding broadband capacities, developing detailed road mapping services, and having data services to collect and process vehicle data.
• Zoning and land use. As shared ownership and on-demand ride services become more popular, the space needed for parking could decline, but the need for pick-up and drop-off areas could increase. Further, fully automated vehicles that can park themselves tightly together may mean that smaller parking facilities will be required in downtown or congested areas. Municipalities may be able to repurpose these facilities or rezone them for other commercial or business use.
• Changes in revenue streams. Revenue from moving violations and parking may also fall as connected and automated vehicles with system controls linked to motor vehicle laws and speeds come on the road. Municipalities that depend heavily on these sources of revenue will likely need to rethink their funding models, perhaps shifting to sources other than the transportation industry or to more mileage-based user fees, congestion pricing, and/or use of tolls.
• Staffing. With safer connected and automated vehicles that less frequently stray from motor vehicle laws on the roads, fewer on-the-beat police will likely be needed to patrol the roads, but more human resources would be needed to support back-office and in-the-field traffic and system operations.
• Condition of current infrastructure. Municipalities with well-maintained road stock have an advantage over their counterparts that have pot-holed and poorly marked roads, which have and continue to be an obstacle to developing fully automated vehicles.
• Legal and regulatory issues. While federal and state officials unravel issues related to CAV safety standards, cyber risks, and privacy, local officials will also have to grapple with more grassroots issues such as determining procedures for ticketing an automated or driverless vehicle.
• Public benefit. For a city’s entire population to benefit from advances in transportation, municipalities will also need to make accommodations for bike and ride sharing and on-demand rides–services on which mass transit users typically rely.
• Planning. Because of the long lead time to full automation, planning needs to be flexible. For example, a 30-year municipal bond issued today to fund a parking garage may not deliver on the revenue stream if only current use patterns are considered in modeling the revenue streams. Likewise, transportation needs and vehicle miles driven could be affected by the adoption of financial incentives like pay-per-mile driving, increased vehicle occupancy from shared rides, increased appeal of public transit stemming from new first-and-last mile solutions, the public’s willingness to commute longer distances in hands-free automated vehicles, increases in empty passenger or cargo loads on return trips, or reduced bundling of trips.

Many cities have taken the first steps. In June 2016, Columbus, Ohio, won a $40 million grant from the U.S. Department of Transportation in a Smart City Challenge, supplementing the $90 million the city received from private partners to implement plans to fully integrate the city. Among the other finalists were Austin, Denver, Kansas City (Missouri), Pittsburgh, Portland (Oregon), and San Francisco. As part of its commitment to creating a smart city, Las Vegas became the first city to give the green light for the use of V2I technology, connecting its traffic signal network to the vehicles of a major automaker. Beverly Hills, California, which has set its sights on being a leader in application of autonomous vehicle technology, has already started building its “fiber to the premise network.” Dozens of other cities have started to install sensors and cameras to track traffic, participate in autonomous vehicle pilot programs, develop mapping, and form partnerships with technology companies and automakers.

The road to these cleaner, safer, smooth-flowing cities, however, is likely to be bumpy and not without accidents. The likely hurdles may include overcoming disparate and fragmented traffic control systems, consumers’ acceptance of automated vehicles, dilapidated infrastructure, and cyber and privacy concerns among other technical and regulatory issues. Those cities that require their prospective private transportation partners to deal with a dozen or more agencies to gain approval may lose out to more regulatory-friendly counterparts.

Despite these issues, the degree to which cities successfully deploy technology to move citizens to their jobs and recreation may define their competitiveness and ability to attract people and investment in the years ahead.

Ready, set, go

Funding for connected and autonomous infrastructure may come from sources not traditionally associated with transportation. For example, a municipality may be able to tap into state or federal funds more broadly allocated to ITS if the connected infrastructure project aligns with the requirements of the ITS funding program. Aimed at improving safety, mobility, or environmental outcomes, connected technology projects may likewise become eligible for funds designed to reduce congestion or emissions, though not specifically earmarked for CAV technology.

Municipalities may also be able to leverage detailed road mapping or other proprietary traffic or road information into revenue streams to support connected infrastructure development and maintenance. One of the most common current private-public arrangements now involves an exchange of information such as information on road closings or planned work for crowd-sourced data on traffic jams, accidents, or other traffic information. Other models that generate revenue may emerge providing municipalities an opportunity to develop a clear set of priorities.

The year 2045 is only a stone’s throw away for planning purposes. Over the next three decades, municipalities will need to make some tough decisions on land use, zoning, budgeting, and infrastructure that will set the stage for their future competitiveness. The challenges are not insignificant, but the benefits of smart transportation can last for generations to come.