Urbanism Next
University of OregonUniversity of Oregon
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Economy

The introduction of new technologies has the potential to impact local, state, and national economies in significant ways.

Technologies such as transportation network companies (TNCs), e-commerce, and autonomous vehicles (AVs) have the potential to transform large sectors of the economy—and in many cases they already are.

Some brick-and-mortar retailers, including large chains and mass merchandisers, have been losing market share to e-commerce, and the ascendency of TNCs such as Lyft and Uber has drawn riders away from taxis and other for-hire transportation services. The rise of the sharing economy has also created competition for a variety of existing business models, from hotels to rental cars. On the flip side, these technologies have expanded the “gig” economy, increasing the number of flexible, low-barrier jobs that exist. Additional changes, such as AVs, could bring significant disruptions to real estate, freight, goods delivery, and infrastructure. Almost every part of the economy will likely be affected by these technologies, either directly or indirectly.

TOPICS TO CONSIDER

Municipal Revenues and Finance

AVs and other new mobility services could have significant impacts on government revenues. According to a survey by Governing of the 25 largest U.S. cities, cities took in a total of nearly $5 billion in the 2016 fiscal year from parking-related activities (56%), camera and traffic citations (12%), gas taxes (14%), and vehicle registration and licensing fees (13%). The deployment of AVs  could lead to decreasing rates of vehicle ownership and usage of private vehicles, which could reduce revenues from fees and fines in the process. Without finding alternatives for the revenues that currently come from automotive taxes, fees, and fines, new transportation technologies could create significant disruptions to municipal finances. Additionally, many cities are heavily dependent on property taxes and sales taxes. The closure of big box stores and malls may strain municipal budgets further due to the loss of tax revenue.

Shift in Industries and Labor

While there is evidence to suggest that TNCs are pulling riders away from taxi and shuttle services, contributing to some job losses, TNCs (and other for-hire contract jobs) have also provided a new stream of gig economy jobs which have low barriers to entry. E-commerce is competing with conventional retail, contributing to job losses in certain retail sectors like department stores, while placing increased demand on warehousing capacity and staffing to match. These shifts are already underway, and the labor market could shift considerably more in the future with the deployment of autonomous cars and trucks. Researchers estimate that 1.3 to 2.3 million jobs in the United States could be directly eliminated by AVs by 2048, depending on different adoption scenarios. Driverless technology may also further expand food delivery services and make delivery operations more efficient, which could also impact the restaurant industry.

Land Value Shifts

The economic impacts of new technologies on land value hinges on the new uses of land. The tax base may grow or shrink depending on the redevelopment of land, and new uses of land will also affect the types of employment that occur on that land. If vast swaths become available for redevelopment, property values could shift, and the forces that drive property values could shift as transportation access changes.

Key questions

  • How can existing tax codes, fee schedules, and fines be updated to reflect current and upcoming changes in transportation?
  • Are there new tax codes, fee schedules, and fines that need to be created in response to current and upcoming changes in transportation?
  • What types of workforce development initiatives should cities undertake in order to proactively prepare for changes to labor forces brought about by new technological developments?  

What to do

Interested in doing something practical with this information? The Nexus has two “What to Do” categories, Governance and Design, with suggestions of where to start, as well as examples of what’s been tried before.

  • Pages within the Governance category deal with policy, planning, regulation, and everything else a government agency of any size might need to consider.
  • Pages within the Design category, meanwhile, focus on the nuts and bolts side of things, from how streets should be designed to how new opportunities for infill can shape future developments.

Click the link below to get started.

More about what to do »

Resources

Policies, pilots, and approaches

Coming in March 2020

Suggested reports

Report – Academic
2017
Benjamin Y. Clark
Urbanism Next

The goal of this white paper is to consider the impact of AVs on municipal budgets. AVs create a “potential rat’s nest of a budgeting challenge.” This paper seeks to begin the process of untangling that rat’s nest, and provide the foundation for future phases of the project that will consider potential additional revenue sources to fund the infrastructure changes that may come from the integration of AVs as well as land use planning implications.

Communication tools

Coming in March 2020

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