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Monday, Oct 2, 2023

Economic Forecast & Trends 2017:2018 and Beyond: Economic Opportunities from Traffic Jams

As Mayor Garcetti’s Sustainable City pLAn describes, Los Angeles drivers spend more time in traffic than any other major U.S. city – and that is before Los Angeles welcomes the 500,000 new residents expected by 2035.

But, this population growth does not necessarily mean more traffic jams. The mobility evolution has begun, and the pLAn calls for increases in shared transportation (sometimes called “mobility”) services with a specific goal of doubling such trips by 2025 (from 2012 levels).

One traditional iteration of shared mobility – public transportation – will likely continue to be the “backbone” of any city’s mobility program in the coming decades. In addition, new mobility options will continue to expand and new models may emerge; and new users will join existing programs. For example, in 2018 we will likely see more carsharing which is growing at a rate of 35% a year in the U.S. In addition we will also most likely see an increase in mobility services where users need not drive themselves – one study found that only 60% of today’s 18 year olds have a driver’s license and Goldman Sachs has predicted that the ride-hailing market (for example Lyft and Uber) will grow eightfold to $285 billion by 2030. Furthermore, more vehicles may be used in “multi-modal” programs. For example, we may see more programs in which single vehicles are used for carsharing during the day, carpooling in the mornings and evenings and ride-hailing on the weekends.

Autonomous vehicles will almost certainly be part of the mobility revolution – RethinkX projects that “by 2030, within 10 years of regulatory approval of autonomous vehicles (AVs), 95% of U.S. passenger miles traveled will be served by on-demand autonomous electric vehicles owned by fleets, not individuals.” This prediction is not science fiction – nuTonomy plans to launch a commercial ride service in Singapore in 2018.

Lawmakers must be nimble in addressing these mobility and technological changes. Certain laws from traditional transportation modes, such as laws governing traditional counter-based rental car transactions, may also apply to mobility programs. For example, certain state vehicle “rental” laws that catch mobility programs within their scope contain provisions requiring posting signs at rental counters and conducting in-person signature or driver’s license verification. Compliance with such obligations may be difficult since many mobility program transactions occur remotely and only involve a user, a vehicle, and a mobile application. In addition, local, state, and federal for-hire vehicle or motor carrier laws may apply to certain mobility programs. Moreover, multiple uses of a vehicle will raise legal and risk issues that need to be carefully assessed.

Accessibility and universal design are also important considerations – the Americans with Disabilities Act and other laws may apply to mobility programs. For example, an autonomous vehicle used as part of a mobility program may not be accessible to all users or serve its desired mobility purpose if it does not include the means to help users enter the vehicle, secure themselves inside the vehicle, and exit the vehicle without human assistance. In vehicles without drivers, a higher level of vehicle accessibility may be needed, and such accessibility should be considered early as such modes begin to be developed and deployed. Accessibility should also be discussed beyond the confines of vehicles themselves – a mobility program may rightly include a bicycle sharing component for its environmental and other benefits; however, users for whom bicycle sharing is not physically an option should be considered.

Even new legal frameworks may struggle with the pace of innovation. Developers of highly autonomous vehicles currently must operate in a legal landscape rich with uncertainty. Though the U.S. Department of Transportation and the National Highway Traffic Safety Administration have released non-binding federal guidance relating to autonomous vehicles called “A Vision for Safety 2.0” (which replaces the non-binding guidance released in Fall 2016), and the U.S. House of Representatives passed the SELF DRIVE Act in August 2017, there is still (as of the drafting of this article) no binding federal law providing for a national framework for autonomous vehicles and preempting the patchwork of state laws and regulations governing autonomous vehicles.

Data ownership and privacy considerations will also be critical for mobility programs. Even companies that have experience operating in the transportation space may find it costly and time consuming to adjust to the quickly evolving legal landscape surrounding technology and consumer privacy as more transportation becomes more intertwined with app-based products that collect consumer information, as more mobility partnerships involve the sharing and monetizing of consumer data, and as more companies seek to perform user background checks.

In sum, and paradoxically, the impact of Los Angeles’ forecasted population growth may not necessarily mean an increase in lost productivity due to more traffic idling. Indeed, the mobility revolution that is projected to simultaneously grow in Los Angeles, may mean more economic opportunities in 2018 and beyond.

Wesley D. Hurst (Principal) and Tara J. Cyr (Associate) are attorneys with Polsinelli PC and are members of the firm’s Mobility and Vehicle Use Practice Group. They can be contacted at (310) 556-1801 or through Polsinelli.com.

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