Autonomous Cars and Real Estate
Yes, I love my car. My car is fully paid for. No car payments for me.
I am the proud owner of a 2006 Chevy sedan with over 115,000 miles. Now I will note that I am starting to see small rust spots on the hood and trunk of my car. And I have always had some sort of electronic gremlin that causes the doors to lock and unlock at will, whether I am in the car of not. And I think the CD changer stopped working about 4 years into my ownership experience. But despite all of this I love my Chevy. And the reason why I love this car is it is 100% paid for – no monthly car payments.
I did not want to buy a new car. But after the sixth new battery replacement and the fact that I think the starter is going to stop starting soon I had to bite the bullet and buy a new car. A new car that I will likely only drive about one hour a day or about 4% of the time. I will spend about $7,500 a year on car payments and gas to drive 4% of the year! That just seems like such a huge waste. But, according to a Morgan Stanley global study of all automotive/car rental/fleet management car usage, most cars are only driven 4% of the time each year.
Wow, so I am not the only one wasting money. Makes me feel a little better but not a lot better.
I wish I had other options, but I have not bought into car sharing services like Uber. Sure it might work for a night out with my wife, but not sure it’ll work out well when I need to do a commercial property inspection or when I need to drive from Cleveland to Detroit to visit a client or conduct comparative property research.
However, others are starting to buy into car sharing. Last year almost 100,000 people used Uber or Lyft services. So is car sharing the future? It definitely could be – and the car sharing companies are banking on autonomous cars helping their bottom line. Today, approximately 75% of the car sharing fare goes to the driver. With autonomous cars that fare would go directly to Uber or Lyft.
Some economists are predicting that by 2030, less than 15 years from today autonomous cars will be commonplace. And PricewaterhouseCoopers predicts that autonomous cars will result in a 99% reduction in cars on the road – that’s going from 245 million to 2.4 million.
Last year, approximately 16.4 million new cars were sold in the U.S. To support the purchase and service of these and used cars there are approximately 16,400 new car dealerships, 175,000 automotive repair shops and 168,000 gas stations. If the number of cars drastically decreases there will be a huge impact on the businesses that service this industry. We could see a massive need to re-purpose a great deal of real estate as these businesses across the country cease to exist.
Re-purposing these establishments will not be easy, those that include a fuel pump will also likely have underground storage tanks. Tanks, which if not properly managed, closed or removed can potentially lead to petroleum leaking into the soil and into groundwater. It doesn’t mean re-purposing can’t be done or shouldn’t be done, as these structures are typically located at prime high volume intersections. But to get it done, it will require more resources, expertise and adherence to regulations.
The end result, a reduction in the number of people driving cars on the road could mean less pollution, traffic and damage to city roads. As well, we could see more investment in retail and service locations, in particular in urban areas, as there would be less of a need for expansive parking lots or reserve funds for site/lot improvements.
Now, we only need to be sure the autonomous cars are good drivers.