Widespread Urban Adoption of Self-Driving Vehicles and Robo-Taxis Could Lead to a Revolutionary Transformation of Cities, According to a New BCG Report
BOSTON—Widespread urban adoption of self-driving vehicles (SDVs) and “robo-taxis,” or self-driving taxis, could result in a 60% drop in the number of cars on city streets, an 80% or greater decrease in tailpipe emissions, and 90% fewer road accidents, according to a new report by The Boston Consulting Group (BCG) prepared in collaboration with the World Economic Forum.
Self-Driving Vehicles, Robo-Taxis, and the Urban Mobility Revolution, released today, builds on earlier research by BCG and the World Economic Forum, including a survey of more than 5,500 consumers in ten countries—the largest global survey on SDVs to date. The report examines four potential scenarios for SDVs in an urban context and describes the possible impact of each one. While broad consumer adoption of SDVs—to which BCG’s research shows there are few barriers—would by itself lead to significant disruption, the real revolution in urban mobility will come with widespread adoption of robo-taxis.
“There is a compelling case to be made for SDVs in cities,” said Nikolaus Lang, a BCG senior partner and report coauthor. “Ride-shared, electric robo-taxis can substantially transform and improve urban transportation and, by direct extension, livability, by providing more people with easier access to mobility, making streets safer, and freeing up space no longer needed for parking. The major players—industry, consumers, and policymakers—are excited and engaged.”
Some 58% of consumers in cities around the world are open to trying out SDVs. Willingness is highest among younger consumers: 63% of those aged 29 or younger are willing to ride in a fully self-driving car, compared with 46% of consumers aged 51 or older.
Acceptance of SDVs is highest in emerging markets. In India, for example, willingness is 85%, while consumers in Japan and the Netherlands are most reluctant (36% and 41%, respectively). Consumers cite the convenience of parking assistance and an increase in productivity while traveling as the top two reasons for interest in SDVs. When asked who should produce SDVs, almost 50% of respondents look to traditional-car manufacturers. Trust in automakers is highest in France, Germany, and Japan; it is weaker in India, the US, and China, where tech companies have high visibility.
Although few consumers have even seen an SDV, their expectations for how SDVs will differ from traditional cars are quite specific. More than 35% expect SDVs to be hybrid vehicles, and another 29% anticipate that they will be electric.
Many consumers are willing to pay a premium of $5,000 or more for a fully self-driving car. In France, India, and Japan, every second consumer is ready to pay more for an SDV. This willingness to pay extra is driven by an economic logic that balances the incremental cost against potential cost savings in other areas, such as lower parking fees, fuel savings, and even lower housing costs if it becomes more convenient to live farther from the more expensive city core.
The research also involved in-depth interviews with 25 urban policymakers in 12 cities. Some 60% of these policymakers expect that by 2025, at least one city will have banned traditional-car ownership, partly as a result of robo-taxi fleets. Another 24% believe that this will happen by 2030. In terms of operating robo-taxi fleets, policymakers clearly see the private sector in the lead and envision a multiplayer setup rather than a monopolistic structure. Numerous trials involving SDVs are already underway in cities as diverse as Singapore, London, and Gothenburg. Gothenburg is currently planning to launch a pilot of 100 SDVs on its ring road in 2017.
In addition to conducting research with consumers and city policymakers, BCG and the World Economic Forum developed four comprehensive scenarios—based on autonomous technology, ride sharing, and electrification—for the city of the future. Here are the scenarios, in order of potential impact:
The Premium Car That Drives Itself. SDVs complement the existing mobility landscape as high-end offerings. This results in a small reduction (about 1%) in the number of vehicles on the streets through limited sharing of self-driving vehicles and fewer accidents—a drop of almost 20%—because SDVs, without human error as a risk factor, are much safer.
SDVs Rule the Streets. In this scenario, SDVs replace most traditional cars but are still primarily privately owned. One in ten SDVs is shared by multiple individuals, and the total number of cars in the city falls by 8%. The number of accidents drops by 55%, and there is a 5% increase in freed-up parking space.
Robo-Taxis Take Over. Robo-taxis are the primary mobility option in the city. The biggest change is a nearly 50% decrease in the number of cars as consumers abandon privately owned vehicles for robo-taxis. There are almost 90% fewer accidents, and nearly 40% of parking space is freed up.
The Ridesharing Revolution. Shared robo-taxis are the main mobility mode. Every self-driving taxi now averages 2 passengers instead of the 1.2 assumed to be the average occupancy previously. Ridesharing frees up more parking space (54%) and further lowers the number of cars needed to provide the same level of mobility to the population (59%). Accidents decrease by 87%.
“No single scenario will play out exactly as described, but our analysis makes it clear that the potential benefits for society are huge if SDVs are combined with ride sharing and electrification,” said Michael Rüßmann, a BCG senior partner and report coauthor. “A power train shift from internal-combustion to electric engines is essential if cities want to cut tailpipe emissions, and ride sharing in urban areas is required to reduce the number of vehicles that are on the streets at any given time. Autonomous capabilities are the key to big improvements in road safety. These three factors—ride sharing, autonomous driving, and electrification—reinforce each other to facilitate fast adoption.”
A copy of the report can be downloaded at www.bcgperspectives.com.
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