Socioeconomic Impacts of Automated and Connected Vehicles (2018)

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1 Coming to the specific topic of this sixth symposium, De la Torre emphasized the importance of examining the socioeconomic impacts of automated and connected vehicles (CAVs) on the transport system. Over the com­ ing decades, the reach of CAVs may surpass what stake­ holders already consider a driver of transformative change in the sector. It is therefore essential to explore the degree to which connected and automated vehicles and shared mobility (CAVSM) may prove beneficial or adverse in achieving common societal and economic goals. De la Torre noted that progress in the technologies and innovative business models for CAVs proceeds at a fast pace, while old and new questions over the poten­ tial for significant socioeconomic impacts in the long­ term are yet largely unanswered. High­level automation, increasingly connected systems, and a far broader inter­ face between the consumption and the provision of transportation services will not succeed at scale merely by integrating more and better technologies. Consider­ ing the importance of ensuring the buy­in of citizens for these new technologies and of achieving a better under­ standing of how transport users and society at large per­ ceive and value their future use, de la Torre pointed to the need for more research and innovation to assess the impacts, benefits, and costs of the deployment of CAVSM Welcome from the european commission Clara de la Torre and Robert Missen Clara de la Torre welcomed all participants and thanked the members of the planning committee for their hard work in organizing the symposium, the authors of the white paper, the speakers for sharing their knowledge and insights, and the participants for making time for this event in their busy schedules. She reviewed the history of the collaborative EU­U.S. symposia, stressing that the success of the first series of four had prompted a second series. Since 2013, the sym­ posia have in fact proved an excellent method for sharing information on critical issues, best practices, and research gaps. Initial promising outcomes from the symposia have included early learning, expanded networking, and collaborative research opportunities. The symposia thus succeeded in fostering greater trans­Atlantic interaction between researchers and practitioners, notably through the twinning research approach,1 which supports the European Union and the U.S. Department of Transporta­ tion in issuing separate but compatible calls for research. Clara de la Torre, Directorate-General for Research and Innovation, European Commission, Brussels, Belgium Robert Missen, Directorate-General for Mobility and Transport, European Commission, Brussels, Belgium Neil J. Pedersen, Transportation Research Board, Washington, D.C., USA Alasdair Cain, U.S. Department of Transportation, Washington, D.C., USA Barbara Lenz, Institute of Transport Research, German Aerospace Center, Berlin, Germany Susan Shaheen, Transportation Sustainability Research Center, University of California, Berkeley, USA Nick Reed, Bosch, United Kingdom Johanna P. Zmud, Texas A&M Transportation Institute, USA Karel Martens, Technion—Israel Institute of Technology, Israel Michael F. Ableson, General Motors LLC, USA Opening Session 1 Twinning: coordination of research activities in funded projects of mutual interest.

2 S O C I O E C O N O M I C I M P A C T S O F A U T O M A T E D A N D C O N N E C T E D V E H I C L E S on our roads. She reviewed the multidisciplinary nature of CAVSM development, which embraces transport planning, design, operations, finance, economics, insur­ ance, risk assessment, risk balance management, pub­ lic outreach, and public policy. De la Torre also invited participants to adopt a cross­modal perspective in their discussions. De la Torre concluded by highlighting noteworthy features of Horizon Europe, the forthcoming EU frame­ work program for research and innovation (2021–2027), whose overarching goals are to strengthen the EU’s sci­ entific and technological base; boost Europe’s innova­ tion capacity, competitiveness, and jobs; and deliver on citizens’ priorities. She notably mentioned that in its “Pillar II: Global Challenges & Industrial Competitive­ ness,” Horizon Europe will invest around 15 billion euros (US$17.5 billion) in the Climate, Energy, and Mobility cluster, including interventions to boost industrial com­ petitiveness in transport, promote smart and clean mobil­ ity, and, possibly, a public–private partnership (PPP) on CAVs. International cooperation will likely be enhanced with intensified targeted actions and through full open­ ness to researchers across the world. Robert Missen stressed the importance of providing sufficient knowledge to policymakers engaged in the development of CAVSM. He stressed that understanding and assessing socioeconomic impacts, often called the soft side, is no less critical than harnessing technological progress, and he shared his expectations that the sym­ posium would explicitly contribute to this goal through comprehensive and targeted discussions. Welcome from the transportation research Board Neil J. Pedersen Neil Pedersen reviewed the past experience of the EU­U.S. symposia and praised their concrete usefulness in gener­ ating new research and enabling a mutual learning pro­ cess between the European Union and the United States. Pedersen particularly welcomed the topic of this sixth symposium, which aims at stimulating novel research and the generation of new knowledge on the socio­ economic dimension of CAVSM. He stressed that the technology options for CAVSM are broadly identified, while their social and economic implications are largely understudied. He noted that the symposium partici­ pants can contribute to a better understanding of socio­ economic impacts, not only in their expert capacity but also as citizens and consumers. Pedersen stressed the importance of equity issues, the implications of CAVSM, and the need to better under­ stand if and to what extent technology can respond to equity goals and concerns. He also remarked upon the high relevance of demographic variables in assessing the social and economic impacts of CAVSM, including geo­ graphic mobility of people. Among other key implications of CAVSM, Pedersen stressed privacy issues and the manifold challenges of handling personal information while safeguarding the rights of individuals to preserve their privacy. Overall, the diffusion of CAVSM calls for a governance structure and rules that pay due attention to their socioeconomic dimension. Pedersen finally cautioned against the speculative thinking that too often accompanies socioeconomic implications of novel technologies and solutions. These should be assessed on the basis of solid scientific evi­ dence; hence the need to devise appropriate research programs that explicitly address the socioeconomic dimension. Welcome from the u.s. department of transportation Alasdair Cain Alasdair Cain thanked the symposium organizers and all participants, stating that such a gathering of the best experts from both the European Union and the United States ensures that the contribution of the discussions will make the CAVSM transition happen in the safest manner. He noted that the novel solutions brought in by CAVSM will generate impacts for the coming decades and thus call for a carefully designed, long­term­oriented research effort. Cain remarked that the nature, scope, and scale of CAVSM unquestionably require an effective interna­ tional coordination framework and targeted instru­ ments. In this regard, the twinning platforms previously established as a result of past symposia have proven their worth and could be further pursued. Cain praised the high quality of the symposia reports so far, as this is the basic prerequisite for translating sci­ entific evidence into policy. purpose and scope of the symposium Barbara Lenz and Susan Shaheen Barbara Lenz and Susan Shaheen, the symposium cochairs, introduced the members of the planning com­ mittee and thanked them for their dedication through­ out the symposium preparation process. They presented the thematic allocation of responsibilities between mem­ bers and praised the team spirit that developed within the committee. Lenz and Shaheen noted that at a time of great disrup­ tion and uncertainty, there is a need to understand cross­

O P E N I N G S E S S I O N 3 cutting impacts of CAVSM and devise joint research programs to explore them. To this end, the symposium was designed to identify similarities and key differences between Europe and the United States and, accordingly, to develop potential research topics to address them. Academia, government, industry, and public interests are increasingly developing a collective narrative on CAVs and shared forms of transport. The main motivation of the symposium was, therefore, to explore how CAVSM may prove beneficial or not in achieving common soci­ etal, environmental, and economic goals and to identify pathways that will mitigate unintended consequences. Lenz and Shaheen summarized the methodology adopted to make the most of the symposium discussions. Four topics were identified—freight transport; places where people work, live, and play; people’s behavior; and stakeholders’ role and attitude—and the specific implications of CAVSM for each topic were explored. Four transversal themes were also identified so that each exploratory topic could be examined from the perspec­ tives of economics and welfare, equity, data access and privacy, and safety and security. The cochairs further presented the two alternative scenarios devised to frame the discussion on the four­ by­four structure shown in Figure 1, driven by differ­ ent combinations of government regulation and market forces. Lenz and Shaheen finally encouraged all par­ ticipants to share their ideas and experiences in the breakout sessions,2 which were designed to provide a fundamental contribution to the ultimate symposium outcome of research problem statements, which would then be translated into areas of potential research and joint initiatives. presentation of the symposium White paper: synthesis of the socioeconomic impacts of connected and automated Vehicles and shared moBility Johanna P. Zmud and Nick Reed Johanna Zmud and Nick Reed presented the white paper they prepared for the symposium, “Synthesis of the Socio­ economic Impacts of Connected and Automated Vehicles and Shared Mobility.” The complete text of the white paper is provided in Appendix A. Zmud and Reed’s pre­ sentation covered the topics summarized below. Zmud reminded participants that the main objec­ tives of the white paper were to provide foundational, high­level information on socioeconomic implications of CAVSM and to introduce and facilitate the symposium discussions. She noted that CAVs result from the com­ bination of two technological realms: connectivity and automation. In the United States, automated vehicle (AV) and con­ nected vehicle (CV) systems are viewed as independent technologies, whereas in Europe they are seen as comple­ mentary. Significant differences between the European Union and the United States are also found in terms of regulation. Policy and regulations are not prescriptive in the United States, where reliance is rather on volun­ tary guidelines for the AV industry and best practices for AV testing on public roads. The National Highway Scenario 1 Automated and Connected Vehicles: framing scenarios CAVs on the Rise Scenario 2 Market Forces Strong Market Forces Weak Low Government Regulation High Government Regulation CAVs Tamed by Policy & People FIGURE 1 Framing scenarios for CAVs. 2 Each breakout group included between 12 and 15 participants (from both the European Union and the United States) representing academia, business, and policy making.

4 S O C I O E C O N O M I C I M P A C T S O F A U T O M A T E D A N D C O N N E C T E D V E H I C L E S Traffic Safety Administration is responsible for vehicle equipment, while states regulate human driver and vehi­ cle operation, and legislation is not harmonized across states. In Europe, on the other hand, the European Com­ mission aims at harmonizing the legal framework along with research and industrial innovation across member states; a first set of use cases (Levels 3–4 for passenger cars and trucks on motorways and cities; Level 4 for public transport in low speed situations) has been identi­ fied to help shape policy and regulation. Zmud discussed the data privacy and access dimen­ sion of CAVSM. She remarked that CAV and shared mobility systems have in common the large amount of data they collect. This collection of data entails a poten­ tial increase in privacy risk and four types of potential privacy problems for individuals: loss of trust, loss of self­determination, discrimination, and economic loss. These possible problems are dramatically reflected in the results of a 2015 survey carried out in the United States in which 91% of adult respondents agreed that con­ sumers have lost control of how personal information is collected and used by companies. A critical issue in fact arises from who has access to personal/location data and whether these data are directly or indirectly (e.g., in combination with other data) threatening individual pri­ vacy. Control of data access is therefore fundamental to prevent misuse or mistreatment of personal data. Zmud noted that protocols for privacy protection and data sig­ nificantly differ between Europe and the United States. In the United States, the Federal Trade Commission Act of 1914 prohibits unfair or deceptive practice (with­ out, however, specific CAVSM provisions) and while most states have some form of privacy legislation, none address CAVSM data. In the European Union, data pri­ vacy is akin to a constitutional right, which has recently materialized in the General Data Protection Regulation that harmonizes regulation across member states. In discussing safety and security challenges, Zmud remarked that more than 90% of road accidents are caused by human error, which contributes to the high safety expectations associated with AVs. She noted that connectivity also has a promising potential to increase safety, as safety messages could reduce accident severity or prevent traffic crashes. However, the safety benefits of CVs can only be reaped if the vehicle is equipped with the proper applications that are turned on with the driver paying attention. Altogether, safety is the primary motiva­ tor for CAVs in the United States, whereas in the Euro­ pean Union, additional benefits are also targeted to the environment and to congestion levels, with vehicle­to­ infrastructure technologies playing a fundamental role for smart mobility applications. Zmud then commented on the extent to which CAV technologies are likely to fulfil their safety promise, on the critical importance of testing on public roads, and on the learning effect this can spur: the more AV miles/kilometers are driven, the faster safety improvements are likely to be achieved and, thus, to help build the necessary trust and acceptance, the lack of which is currently a major barrier to adoption (see Figure 2). As for security issues, Zmud observed that cybersecurity is an obvious challenge for CVs but also raises concerns for AVs when they reach Level 4 or 5. Security by design is now recognized as the guiding principle to address CAV security issues from the start. Reed discussed economics and welfare issues raised by CAVSM. He noted that economic considerations will always be a factor in the development and ultimate success of new technologies. CAVs are no exception, and it is especially important to understand how their economic and welfare effects will be distributed. Reed remarked that employment costs for profes­ sional drivers account for a large share of total oper­ ating costs (43% for truck drivers in the United States and as much as 88% for a taxi in Zurich, Switzerland), with AVs thus paving the way to huge potential savings. Additional savings could be achieved on fuels, which account for 20%–25% of operating costs and could be reduced by as much as 8% by truck platooning with CAVs (see Figure 3). Savings in wages arising from AVs are, however, likely to be at least partially offset by the higher purchasing costs of the additional technology. Altogether, a Price­ Levels of Automation Level 0: No automation. Level 1: Human controls driving, but the automated systems can take over one major driving function, such as steering or speed. Level 2: Human is responsible for safety- critical functions. Automated systems can execute both steering and acceleration/ deceleration functions to assist driver. Most automakers are currently developing vehicles at this level. Level 3: Vehicle can manage all safety-critical functions under certain conditions, but human is expected to take over driving tasks when alerted. Level 4: Vehicle is self-driving in some condi- tions or situations but not all. Level 5: Car can be completely self-driving in all situations. Requires absolutely no human participation in driving tasks.

O P E N I N G S E S S I O N 5 Safety and security concerns impact likelihood to use AVs Rank Privately Owned AVs AV Carsharing Fleetsa AV Ridesourcing Fleetsb 1 Safety of reaction time Lack of information Privacy 2 Cost (purchase) Trust in AV technology Vehicle hacked 3 No need to own car Lack of control Safety of reaction time 4 Like to drive Safety of reaction time Trust 5 Cost (maintenance/repair) Safety of AV not personally owned Lack of information Source: Texas A&M Transportation Institute aCarsharing offers members access to vehicles by joining an organization that provides and maintains a fleet of cars and/or light trucks. These vehicles may be located within neighborhoods, public transit stations, employment centers, universities, and so forth. The carsharing organization typically provides insurance, gasoline, parking, and maintenance. Members who join a carsharing organization typically pay a fee each time they use a vehicle. bRidesourcing services are prearranged and on-demand transportation services for compensation in which drivers and passengers connect via digital applications. Digital applications are typically used for booking, electronic payment, and ratings. (Source: SAE International J3163, September 2018, http://sae.org/shared-mobility/.) FIGURE 2 Safety and security concerns. Source: Volvo European Truck Platooning FIGURE 3 European truck platooning. waterhouseCoopers study estimated that with the rapid uptake of AVs, transportation costs could be reduced by 30% by 2040. Reed observed that in an industry that has an aging driver population and struggles to attract new entrants, the advent of automated deliveries may help to miti­ gate the shortfall of professional drivers in both the United States and Europe. This notwithstanding, the Inter national Transport Forum estimated that by 2030, around two­thirds of the 6.4 million truck driver jobs across the United States and Europe could be eliminated by automation. Reed remarked that this huge job loss could be mitigated by a change in the responsibilities and role of the driver, calling for a different skill set and retraining. He noted that additional savings could be achieved through new vehicle forms that maximize pro­ ductivity, as, for instance, in short­range urban deliveries. As for passenger transport, Reed remarked that in areas that are poorly served by public transit systems, AV services may help residents and businesses to meet their mobility needs, which in turn may support citizens into employment and reduce dependence on publicly funded services for transportation and medical care. Improved accessibility may, however, lead to increases in housing prices and a subsequent rebound distancing from educa­ tion and employment opportunities. Reed also expressed caution about the true extent to which travel time can be successfully reclaimed for productive uses in an AV (for example, people suffering from motion sickness might find it difficult to read or write while traveling in a driver­ less vehicle). Reed then noted that a significant benefit of CAVs is how they might facilitate a move toward shared mobil­ ity (Figure 4). Research has indicated that one shared AV may replace as many as nine individually owned cars in an urban environment, which is an attractive prop­ osition for congested cities. However, some conflict­ ing evidence is beginning to emerge, with users showing

6 S O C I O E C O N O M I C I M P A C T S O F A U T O M A T E D A N D C O N N E C T E D V E H I C L E S behavioral adaptations that result in increased vehicle miles/kilometers traveled and cannibalization of trips from public transit. City authorities will need to monitor the progression of these behavioral changes carefully and respond appropriately to ensure optimal outcomes. Reed observed that while a shift toward shared mobil­ ity has the potential of significantly reducing the urban space allocated to parking, city authorities are unlikely to welcome the prospect of free­floating vehicles roam­ ing the streets awaiting their next assignment. While the shift toward shared AV operation could indeed have a significant impact on safety, he noted that the most advanced safety systems tend to be made available on high­end vehicles before trickling down to lesser models. As a consequence, it may be many years before these safety systems are present on the vehicles of the riskiest drivers, typically those who are young and not able to afford a new car. Reed therefore commented that safety features and systems that can deliver benefits in the short term should not be overlooked in favor of more distant and yet unproven technologies. Reed discussed the social equity implications of CAVSM, and their potential to enable communities of citizens to gain greater access to opportunities for employ­ ment, education, health, and social interaction. These social benefits are likely to be particularly relevant for travelers with additional needs, such as those who are elderly, persons with disabilities, and those living in areas that are underserved by the existing transport provision. Reed, however, remarked that if city and regional authori­ ties cede responsibility for public transit to private compa­ nies operating AVs, there is a risk that operational areas will be selected on the basis of their potential to generate the greatest profit rather than on the goal to maximize mobility for the broadest set of stakeholders. Reed concluded by observing that the deployment of CAVs is associated with a wide range of interconnected issues, some presenting positive prospects, others raising legitimate concerns. It will be essential to manage inter­ ests across the public and private sectors to maximize benefits and ensure their equitable distribution. setting the scene: designing fair transportation systems Karel Martens and Michael F. Ableson Karel Martens discussed the possible role of AVs in ensuring transport justice and elaborated on the general question “Can an autonomous mobility future be a fair future?” He observed that in the past, the role of gov­ ernments was to invest in infrastructure (considered as public goods). Now, it is recognized that a fundamental duty of governments is to provide sufficient accessibil­ ity to all, under virtually all circumstances, to enable freedom of movement. He noted that while the overall accessibility concept is clear, it is difficult to measure, as the term “sufficient” is ambiguous and highly subjective. Martens observed that significant progress has been made to improve transport conditions and accessibility performances. This progress, however, comes at a cost, as the fruition of new and better transport services is con­ strained by three main factors: purchase power (afford­ ability), (dis)abilities, and the need to ensure the mobility of children. Martens developed three possible scenarios for the deployment of CAVSM: In the first scenario, automa­ tion is only partially achieved, with no equity benefits being accrued, as the limiting factors remain largely unaddressed (e.g., purchase power, impairments). The second scenario features full automation and the persis­ tence of the private car ownership model, allowing for an accessibility improvement for persons with disabilities and for the transport of children without fully remov­ ing the obstacles. In the third scenario, full automation is achieved with shared mobility as a prevailing role, which may be construed as a limitation to the freedom of owning a car while offering a similar impact balance to Scenario 2. Martens concluded that to ensure the fairness of transport systems, policies should start by considering people and their needs rather than technologies and their performances, because CAVSM, along with other technological innovations, is not a magic wand. Justice is not an impact, but a goal, and the role of government is fundamental to promote and facilitate the adoption of new solutions that meet societal needs and aspirations. Michael Ableson said that General Motors is com­ mitted to developing and promoting technologies that Source: Rinspeed Self-driving commute? FIGURE 4 Depiction of self-driving.

O P E N I N G S E S S I O N 7 contribute to achieving the “three zeros” policy, which is the ultimate eradication of (1) accidents and their social and economic costs, (2) emissions that endanger the environment and the global climate, and (3) congestion and the huge social burden it imposes upon society. He emphasized the priority assigned to safety issues, par­ ticularly for AVs from Level 4 upwards. He argued that the deployment of AVs is strongly correlated with that of electric vehicles (EVs) and that a major goal to be pursued is to ensure that all AVs are powered by electricity only. He further stressed that the introduction of shared AVs fosters the democratization of automotive technology and accessibility and noted that General Motors is a forerunner in the experimenta­ tion of on­demand shared mobility exclusively operated with full EVs, with already more than 150,000 users. Outlining future prospects, Ableson remarked that the safe and successful deployment of AVs requires considerable investment, in the billions, which is well beyond small­scale experimentation projects. He noted that the cost of AV equipment is currently higher than that of the vehicle itself, as 40% of the vehicle parts are new, and that trials which are carried out in uncontrolled environments are extremely demanding. The overall high costs of AVs notwithstanding, Ableson argued that full­scale AVs will be available as of 2019, and that the future transport system will most likely see the prevalence of mixed (multipurpose) AVs. He mentioned that there is a tendency to over estimate short­term impacts while underestimating those in the longer term, and predicted that the currently high costs of AVs are bound to significantly decrease, from $2 to $3 per mile down to less than $1 per mile for EV/AVs. Ableson concluded that the emphasis on the socio­ economic impacts of CAVs is highly welcomed, as it may allow society to extend the reach of impact evaluation and assessment beyond transportation into other dimen­ sions (e.g., housing, job access).