Driverless cars will help revolutionise city transport, predicts new report

As cities around the world prepare for the advent of self-driving cars, what does their arrival mean for urban planners and city leaders?

An aerial view of heavy traffic on city roads

The arrival of driverless cars is one of three changes in urban mobility that are likely to revolutionise city transport over the next 15 years, according to a new report.

The study by Bloomberg New Energy Finance and McKinsey & Company – An Integrated Perspective on the Future of Mobility – predicts that changes in urban transport are likely to have far-reaching yet contrasting effects on the world’s great cities.

Vehicles and the way they are used will change more in the next two decades than they have in the last 100 years
— Colin McKerracher, head of advanced transport at Bloomberg New Energy Finance

The report looks at the likely effect of several new technologies – the shift to electric cars, an increase in ride-sharing and the arrival of autonomous vehicles – on the transport sector in 50 cities around the world.

It predicts that transport models in these cities, which are between them home to half a billion people, are likely to follow one of three routes:

  • The ‘clean and shared’ model, where shared vehicles could account for nearly half of passenger car miles by 2030 in larger emerging economy cities such as Mumbai, Delhi and Mexico City
  • The ‘private autonomy’ model, where the arrival of driverless cars could see passenger miles increase by a quarter in cities with high-income suburban sprawl
  • The ‘seamless mobility’ model, in which electric vehicles could make up the majority of vehicles on the road in densely-populated high-income cities such as Singapore and London – the result of low-emission zones, consumer interest and favourable economics.

“Vehicles and the way they are used will change more in the next two decades than they have in the last 100 years,” said Colin McKerracher, head of advanced transport at Bloomberg New Energy Finance.

“This study show[s] that the impact on cities will be particularly profound, and will differ from one metropolis to another.”



Embracing self-driving vehicles – the private autonomy model

In the ‘private autonomy’ model, the study forecasts that consumers in cities with significant sprawl will embrace self-driving and electric vehicle technologies. 

Dedicated road space could be allocated to self-driving vehicles, says the report – an approach currently being explored in Iowa – while improved connectivity will make it easier to put in place demand-driven congestion charging schemes.

In these areas, car-sharing and ride-hailing schemes may complement private cars, but are unlikely to replace them on a large scale, predict the authors.

However, they warn, the combination of electric vehicles and autonomy may also increase demand for mobility, adding to congestion.

As a result, the number of passenger miles travelled could increase by as much as a quarter by 2030, suggest the authors, with much of this increase driven by private autonomous vehicles.

‘A once-in-a-generation opportunity’

McKinsey & Company senior partner Stefan Knupfer said: “The coming decade will be a once-in-a-generation opportunity for automotive players. 

“Market dynamics, business models, and customer requirements all have the potential to drastically change in those cities that will be on the leading edge of this transformation.”

The report predicts that autonomous driving, connectivity, car sharing, electric vehicles and the rise of renewable energy will all work to mutually reinforce one another.

For example, say the authors, during the 2020s autonomous driving will boost the use of electric vehicles in high-use services such as ride-hailing, as higher upfront costs are offset by lower operating costs.

These changes to city mobility will present challenges for the automotive and energy industries, as well as for city governments, predict the authors.

Fuel consumption from light-duty vehicles could drop by as much as 75% by 2030 in some cities, leading governments to look for new ways to recover lost taxes.

At the same time, as driverless technologies take hold, as many as four in ten vehicles could be operating autonomously by 2030, predict the authors, accelerating the rise of ‘mobility as a service’.