Taxes and the Urban Mobility Revolution

The future of urban automobility. Graphic Credit: “Reinventing the Automobile.”

by James A. Bacon

Et tu, Hugo?

Del. Tim Hugo, R-Centreville, has proposed eliminating Virginia’s motor fuels tax and replacing it with a 0.9% increase in the state sales tax, the Times-Dispatch reports today. That measure, combined with the allocation of an additional 0.5% of the sales tax to the Commonwealth Transportation Fund, would raise a half billion dollar more for transportation in Virginia per year.

Hugo’s proposal follows a measure submitted by Governor Bob McDonnell to transfer a sliver of revenue from the sales tax to transportation, a bill sponsored by Del. Chris Stolle, R-Virginia Beach, to hold a Hampton Roads referendum for a regional sales tax increase, and a bill sponsored by Sen. John Watkins, R-Powhatan, to increase the wholesale tax on motor fuels.

Under political pressure from local governments and business lobbies to “do something,” the General Assembly is more inundated than Superstorm Sandy with ideas for hiking transportation taxes. But it’s drier than the Sahara when it comes to ideas for ensuring that the money is spent effectively, much less to advance a transportation system for the 21st century. The only figure who halfway makes sense is House Speaker William Howell, who says he might put the brakes on any tax increase because the legislature does not have time during its 45-day session to craft major legislation.

I have little confidence that Virginia’s political class will come to its senses in a year’s time, but we can always pray that the wildebeest-like stampede to higher taxes might relent long enough for reason to take hold ever so briefly.

What would a reasoned approach to transportation reform look like? For starters, it would recognize that the United States (and indeed the world) is on the brink of the greatest revolution in mobility since the invention of the automobile more than a century ago. We can either squander money on 20th-century transportation strategies, which are increasingly obsolete, or we can invest money in projects that will help us pioneer the future in a way that will make Virginia more livable, sustainable and economically competitive.

Every elected official in Virginia, every lobbyist and every civic leader needs to read “Reinventing the Automobile: Personal Urban Mobility for the 21st Century.” This slender, amply illustrated volume describes how the Information Technology revolution is transforming the automobile into something that no one imagined even five years ago.

As the co-authors observe, today’s automobiles are way over-engineered. “Today a typical automobile weighs 20 times as much as its driver, can travel over 300 miles without refueling, is able to attain speeds of more than 100 miles per hour, requires more than 100 square feet for parking, and is parked 90 percent of the time.” By designing cars to specifications that match the requirements of personal urban mobility, it soon will be possible to mass produce vehicles that reduce mass, save energy, ameliorate congestion and diminish the space consumed by parking — all while dramatically cutting the cost of automobile ownership and supporting infrastructure.

“Reinventing the Automobile” describes four inter-locking developments. The first is the emergence of a new “automotive DNA” allowing for Ultra Small Vehicles (USVs). These electric vehicles designed for urban use, prototypes of which have already been built, weigh less than 1,000 pounds, have top speeds of 25-35 miles per hour, have a travel range of 40 miles or so and take up one-third the space of conventional automobiles.

The second trend is the rise of the “Mobility Internet,” in which USVs equipped with sensors and wireless are able to communicate with one one another, allowing them to travel safely at closer distances, effectively increasing the capacity of urban roads. Eventually these cars will be capable of driving on auto-pilot, which will make them safer.

A third development is the integration of electric USVs with the smart grid, in which electric power companies use time-of-day pricing to balance load demand and offset the cost of green but intermittent power sources like solar and wind power. Eventually, hydrogen fuel cells will replace conventional batteries to extend the range of electric vehicles.

Fourthly, advances in IT and sensor technology will make it possible to develop electronically managed, dynamically priced markets for electricity, scarce roadway capacity, parking and even shared-ownership vehicles. “These markets … will depend on ubiquitous metering and sensing, make use of powerful computational back-ends, provide price signals and incentives that regulate supply and demand, and motivate sustainable activity patterns within cities.”

This is not pie-in-the-sky stuff. Many pieces of the system are coming into the market already, and the technology for the rest is under development. The impact on urban development will be mind-boggling. Imagine how human settlement patterns will change if the new technology makes it possible to boost the capacity of existing streets and thoroughfares while narrowing lanes and slashing the footprint devoted to parking spaces. Just think of how much more pedestrian- and bicycle-friendly we can make our communities. Imagine how much more livable densely populated urban areas will become. Write the authors:

Over time, as this process gathers momentum, we will see the increasing emergence of cities that provide high levels of personal mobility but are safer, quieter, cleaner, more livable, more energy efficient, and more sustainable that those of today. Cities that don’t adapt fast enough will find themselves at an increase competitive disadvantage with those that do.

Here’s what really gets me. You’d think Northern Virginia’s super tech-savvy businesses would get it. IT is their business. The integration of complex systems is their business. But where are they in this debate? Are they taking the lead? No, they’re backing business-as-usual thinking articulated by the region’s real estate interests. How very, very sad. An extraordinary opportunity is slipping away. Sometimes, I just want to cry.

17 Responses to Taxes and the Urban Mobility Revolution

  1. well… they’re not going to do GPS VMT… anytime soon…

    and they’re going to max their credit on toll roads pretty quick if not already.

    but I see a silver lining. Up until this point, it’s been de rigueur that fuel taxes go to build infrastructure for cars.

    A sales tax is going to give the rail and transit crowd more equal footing for justification – and to Jim Bacon’s oft asked question – where is the cost-benefit calculation – for road, rail and transit.

    Would this mean that new transportation proposals would require all 3 elements in the analysis?

    • Interesting point, Larry. If Virginia shifts transportation financing to the sales tax, there will be no justification for privileging road/highway transportation projects over mass transit projects. Unfortunately, as you also observe, there is no objective methodology for comparing and ranking road vs. transit projects. Politics will rule.

  2. Excellent post. Having worked in the automotive industry for 20 years, and counting Mercedes-Benz North America, Audi of America, and Porsche Cars North America as clients, I can tell you that we will have to pry the fossil-fuel burning IC engine out of the automakers’ cold, dead hands before any movement towards smaller, simpler vehicles will occur… unless some catastrophe occurs like a sudden plunge in oil production, and then it will be management by crisis. They simply have their eyes set on this quarter’s goals, and understand clearly how to maximize profits under the present regime. For anyone interested in all the profit-generating variables in play for automakers, feel free to check out the short paper http://www.scribd.com/doc/61373484/Clean-Hydrogen-Dirty-Secrets.

    That engineering genius of NASCAR’s golden era, Smokey Yunick, explained the state of automotive technology the best; “They’re (automakers) trying to make an 18-year-old virgin out of an 80-year-old whore.” The cars we drive today are indeed over-engineered, with many engines developing over 300 hp and capable of driving not only over 100 mph, but over 200 mph if not for the speed governing programmed into on-board computers.

    Of course, the switch from two-ton blocks of iron to smaller vehicles will be problematic, as no transition can happen overnight, and vehicles like Hummers could punt those USVs down the road like a tin can in the event of an accident.

    The trends you list are laudable, but I maintain reservations about auto-pilot vehicles. As deep as human stupidity can run, such as texting and driving, the variables at play while driving are indeed numerous, and would be very difficult to cover simply by software and sensors. I may be proven wrong in the future, but I’m skeptical we’ll ever arrive at a day when vehicles will save us from our own idiocies.

  3. “These electric vehicles designed for urban use, prototypes of which have already been built, weigh less than 1,000 pounds, have top speeds of 25-35 miles per hour, have a travel range of 40 miles or so and take up one-third the space of conventional automobiles.”.

    Wasn’t it just two weeks ago that Terry McAuliffe’s car company was roundly criticized in the comments section of this blog for making the exact cars described in this article?

  4. I can only speak for myself. I think the idea behind McAuliffe’s car company is a great one. It’s just a matter of time before millions of Americans are driving cars like McAuliffe is producing. However, that doesn’t mean that a market exists right now. McAuliffe and his investors are taking a big gamble. If they succeed, they’ll look like geniuses. If they fail, they’ll be another in a long line of visionaries who attempted to launch a company before the market was ready for them.

  5. “But where are they in this debate? Are they taking the lead? No, they’re backing business-as-usual thinking articulated by the region’s real estate interests. How very, very sad. An extraordinary opportunity is slipping away. Sometimes, I just want to cry.”.

    You can talk to a rock but you can’t make it listen.

    The capital of the state doesn’t have an adequate bus system let alone a subway. It can’t keep a minor league baseball team in town. Putting up a statue of Arthur Ashe somehow becomes a major controversy. Yeah, we’ll walk you guys through the Jetsons’ technology of the the modern automobile. Then, you will return to the Country Club of Virginia to discuss the good old days.

    Hopeless. Richmond is hopeless.

    Move the capital to Charlottesville, or Tidewater. Anywhere. Just get the political control of the state away from Richmond.

  6. So long as Virginia gives greater protection to property rights in dirt than to other types of property, we will struggle.

    Electric vehicles will not catch on with the public so long as battery technology remains where it is. Driving range needs to become much closer to what is available with gasoline engines. Also, it cracks me up to hear people complain about pollution from power plants and then cheer electric vehicles.

  7. On average a bus carries ten passengers. How many times does a bus outweigh its passengers? How many sq ft to park? What pecentage of the time pafked? What peffcentage of non revenje miles, let alone negative revenue miles.

    Agreed, we need a 426 HP Hyudaj or a 650 HP Lexus hybrid the same way we need a Bushmaster, ut autos are tbe vehicle of the future.

  8. When you do the cost benefit calculation for roads vs all otber transit, roads win hands down .

  9. As for energy efficient urban living, new data shows tbat New Yorks largest buildings, just 2% , account for 45% of building energy use.

  10. That computational back end you talk about wil need a dedicated nuclear power plant to run it.

  11. Jim, are you trying to make us older, faster? You (seem) to advocate living in small spaces and driving small electric cars. There is a segment of the population that already does this, most of them live in Florida and drive thier little golf carts wherever they need to go; as you can guess they are retirement communities.

    I realize that times change but I really can’t imagine being in my twenties or thirties, raising kids and living in a small space and driving something that has a maximum range of less than 100 miles and has to be plugged in every night. Of course when I was that age and raising a family I also couldn’t have imagined living in the tundra of Alaska, chipping ice off the bucket of water that we were going to heat and fix breakfast with and having to use an outhouse in the morning, every morning. No, it wasn’t me, but I did have some friends who lived this way (with two small kids) for over 10 years.

    Heck, I’m hoping to die way before I have to surrender to a retirement community and here you are (apparently) advocating that all of us move into some degree this lifestyle.

    • Accurate, I’m not “advocating” anything. The changes I describe apply to the urban environment. If you want to live in the ‘burbs with your gas-powered car, that’s just fine with me. I don’t believe in social engineering, and I don’t imposing my values on others. What I do believe in is finding market-based solutions to our existing problems. If the auto industry redesigns the automobile in ways that urban dwellers find acceptable, why should you have a problem with that?

      • With all due respect (and I do respect you and your views), when I read this blog it does seem as though you are into social engineering which typically also imposes certain values. I too think that market based solutions are what/where we need to go. If someone likes/wants to live in the city, go for it. If they want to be auto-free or some type of electric vehicle, go for it. But like I said, the gist of what I read is an advocacy for living in smaller, apartment-like dwellings and smaller vehicles. I’m VERY market based, but I dislike when one segment is favored over another.

        In Oregon, they tried to install/institute TOD (transit oriented districts), these were little ‘communites’ typically mixed-use, next to light rail transit stops. The unstated (but understood) goal was to get people out of cars and have a place where they could live and shop (not typically work) in this little walkable community and take the light rail to whatever other destination they wanted to go. They were and are dismal failures (because the vast majority of people did NOT give up the automobile) and are slowly but surely sliding towards run down areas that you’d rather not live in or near. The properties (condos and apartments) didn’t sell until they (city and county) threw in things like 10 year substantial property tax discounts. However as the discounts for those areas is expiring, folks have tried to get out and again, they are a hard sell. Worse, Portland in particular, has now put up several apartment buildings (not necessarily near light rail) that have minimal parking (30 unit buildings with no parking provided or accounted for). The reason it is happening (and neighbors don’t like it because all of a sudden the on-street parking becomes a nightmare) is because the city advocates for it and allows it. There was a time, not so long ago, when you could submit your plans for a multi-family building but the issue of parking was addressed by the city before the plans were approved; so yes, to me it does feel like a large dose of social engineering.

        • I’m no advocate of the Portland approach. That’s social engineering, elites imposing their vision and values on a sometimes reluctant population. But I do think we need to move to more efficient human settlement patterns.

          Top-down government social engineering is not the way to achieve more efficient human settlement patterns. Government needs to un-do the *last* generation of social engineering, which created the suburbs, and then get the hell out of the way.

          In a free market, some people will prefer more compact communities served by mass transit. (Funding mass transit is another question — I don’t believe in subsidies for any transportation system.) Other people won’t. That’s fine with me.

  12. Since we’re on the subject of smaller vehicles, I just ran across this story. Now HERE is a vehicle that I would consider, the only drawback being it’s size, but the price, the mpg, yeah, I’d check this out if it comes about. Oh and the good news, there is no federal money backing this so the taxpayer won’t be on the hook if it fails, unlike so many Obama backed flops.

    http://www.foxnews.com/leisure/2013/01/04/6800-car-to-be-built-at-former-gm-plant-in-louisiana/?intcmp=features

  13. ” But I do think we need to move to more efficient human settlement patterns. ”

    First we would have to agree on what that is. I would suggest that each mode of transportation has its own set of densities that it supports best, and its own set of costs. The most efficient pattern would be the mix of modes that provides the greatest benefits at lowest cost, considering local geography.

    If we ever figure out what thatmix is, the anti-car crowd will be unappy to see what designing for the optimum mix does to their pre-concieved ideas.

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