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Rethinking the impact of autonomous and zero emission vehicles

Rethinking the impact of new vehicle technologies

KPMG analysis shows that while new vehicle technologies such as autonomous and zero emission vehicles could unlock capacity of existing transport infrastructure, they could also make congestion worse. Smarter transport models can help predict their impact and guide policies and infrastructure investment decisions to maintain the economic prosperity and liveability of our cities.

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Illustration of a red car with sensors between two blue cars

According to KPMG analysis1, investing in roads and public transport is no longer enough to meet Melbourne’s growing travel needs.

KPMG undertook a detailed analysis of the impact of autonomous and zero emission vehicles on Greater Melbourne’s transport network. While the analysis focused on Greater Melbourne, key insights and policy implications could be equally relevant to other cities and regions.

New vehicle technologies such as autonomous and zero emission vehicles present opportunities to better utilise existing transport infrastructure and enhance our economic, social, environmental outcomes. However, as with all new technologies, their benefits are not guaranteed and without the right evidence base to inform the policies and infrastructure decisions, there could be unintended consequences.

Traditional approaches to transport modelling don’t allow us to properly assess the impact of new technologies on the wider transport network. With our cities growing at historic levels we urgently need new approaches that can model the impacts of changing citizen preferences as new technologies are adopted. Once we have better data on the impacts we can develop smarter policies to maximise their benefits and minimise their downsides.

Unlocking new transport technologies

As a first step to unlocking the benefits of new transport technologies, KPMG and Infrastructure Victoria worked together to develop modelling and analysis for the introduction of three key new vehicle technologies in Melbourne:

  1. Zero emission vehicles
  2. Automated vehicles (i.e. driverless cars) and 
  3. On-demand automated vehicles (i.e. driverless taxis).

KPMG used the KPMG Melbourne Activity and Agent Based Model (MABM), along with financial and energy market impact analysis to shed light on the impacts of new vehicle technologies.

 

The MABM is a cutting edge strategic transport model that uses ‘big data’ and machine learning to simulate how people in Melbourne might move between their day-to-day activities under a range of scenarios. View the KPMG Melbourne Activity and Agent Based Model to learn more.

What is the impact of doing nothing?

Without new transport technologies, there is only so much we can do in order to accommodate population growth on our transport system.

 

“If we limit our solutions to building more roads and railways, Greater Melbourne in 30 years could include significant congestion, crowded public transport and much longer peak travel times. While the benefits of rapid growth to our state is significant, not planning for this growth in an appropriate manner and managing our current infrastructure efficiently may put our liveability at risk.”

Paul Low
KPMG’s National Sector Leader
Infrastructure, Government and Healthcare, KPMG Australia

 

Figure 1 shows some projected results about Melbourne’s transport system if we don’t introduce any new vehicle technologies.

  • By 2046, Melbourne is projected to have 65 percent more people and 52.5 percent more cars.
  • By 2046, 19 percent of all trips will be taken on public transport (compared to 10 percent now).
  • Trains will experience particularly high growth to 2.6 million train boardings per day by 2046.
  • Walking distance per person rises to 2.1 km per day as people shift from car to public transport.
  • Due to population growth, total car travel is still on the rise.
  • Still, the average car is used only 4.8 percent of the time by 2046.
  • Average network speed is similar in 2046 as the present day due to investment in new roads, but cars lose 8 percent of their speed during peak hour by 2046.

Figure 1: Melbourne's future transport system without new technologies

The impacts of three transport technologies

1. Zero emission vehicles (electric or hydrogen cell vehicles) help the environment but worsen congestion.

Zero emission vehicles (ZEVs) are cars that use electricity or hydrogen instead of petrol. Electric vehicles in particular are cheaper to run and both electric and hydrogen cell vehicles are much friendlier to the environment than traditional cars.

For the purpose of this analysis, we’ll be focusing on electric cars.

Not only are electric cars easier on the environment, they could also be easier on the wallet. Even with today’s technology, the running cost of electric vehicles is around 5 cents per km compared to about 18 cents per km for petrol vehicles, and new technologies could bring the cost down even further in future. The reduction in the cost of driving could lead to a modest shift from public transport to road transport, and an associated increase in congestion.

Key
upsides
  • Environmentally friendly
  • Potentially cheaper to run
Key
downsides
  • Congestion gets slightly worse, because the average person may drive more often and/ or longer due to lower cost.

2. Private automated vehicles (AVs) travel closer together and take up less space on roads, but their convenience and ability to drive empty can clog up key roads.

Automated vehicles (AVs) are cars that can drive on roads without a human driver (or even a passenger). AVs can also 'platoon' on the road, meaning they can drive closer together and coordinate their starts and stops to use road space more efficiently.

Travel in a private AV is cheaper than a traditional car (if it’s electric), more convenient (because it’s driverless) and more universally accessible (because anyone can use one).

Key upsides
  • Less congestion, because AVs can platoon.
  • Anyone can use an AV regardless of age or physical ability.
  • Travellers can work, read, watch TV or sleep during car travel.
Key downsides
  • The convenience and lower cost of travel on AVs encourages more people to use the roads, so congestion reductions are partly offset by more car use.
  • People may want to send their cars home empty to avoid parking fees – this could cause major congestion on inner city roads

3. On-demand AVs dramatically reduce congestion, as well as the number of cars needed in Melbourne to service the same level of demand. But fares discourage people from using the on-demand AVs, which lowers accessibility.

On-demand AVs are AVs that are used as taxis, rather than private vehicles. Without a driver, taxi services are significantly cheaper and may become attractive as a replacement for privately owned vehicles. On-demand AVs could save Melburnians money, by sharing the costs of vehicle ownership (purchase cost, vehicle insurance, maintenance etc.) across a larger group of people.

The replacement of private AVs with on-demand AVs almost eliminates road congestion across the network. Average network delays across the day are reduced by 90 percent, while morning peak delays are reduced by 93 percent compared to Dead end. On average, peak time speeds increase by 74 percent across the network.

Key upsides
  • Cheaper than owning a private car, because a group of people are sharing the costs of car ownership and maintenance.
  • Just one tenth of the vehicle fleet in Greater Melbourne is needed to service the same level of demand.
  • Reduced need for car parking frees up space, especially in the CBD and busy areas.
  • More people walk and use public transport because they don’t own private cars.
  • Much less congestion, because AVs can platoon, and because of higher public transport use.
  • We don’t need to invest as much in new roads, which frees up space for other uses.
Key downsides
  • Being charged a fare for each individual trip may discourage people from using on-demand AVs for certain trips.
  • Waiting times may be inconvenient, especially in peak times and in the outer suburbs.

What happens when we introduce these new technologies?

Figure 2 summarises some key transport outcomes in 2046, when traditional cars are replaced with electric vehicles, private AVs or on-demand AVs. Some of the key effects of introducing these technologies are summarised below:

  • Private AVs shift 5 percent of trips from public transport to cars, because they take up less space on the roads (due to platooning) and are more convenient to use than traditional cars.
  • On-demand vehicles result in 9 percent increase in trips on public transport due to waiting times and fares.
  • Using on-demand vehicles rather than private cars reduces the need for people to own cars by more than 93 percent (i.e. overall fleet of cars in Greater Melbourne declines). This is because cars are shared among individual users, rather than privately owned, so each car can be used more in a typical day.
  • Walking distance is higher when more people use public transport.
  • Electric cars encourage slightly more car travel because they are cheaper, while private AVs considerably add to the demand for car travel, because they are more convenient.

It should be noted that this analysis is based on a scenario where all cars across Greater Melbourne are replaced with each of these technologies by 2046, and that the vehicle types do not co-exist.

Figure 2: Melbourne’s transport system – 2046 'What if' scenarios

What happens if technologies co-exist?

Our analysis so far has involved replacing traditional cars with a fleet of one particular new technology, but in reality it’s more likely that our future involves a mix of traditional cars, human-driven electric cars, private AVs and on-demand AVs.

  • Melbourne needs 2.2 million cars, compared to 3.5 million with traditional cars or 265,000 with all on-demand AVs.
  • 22 percent of trips occur on public transport, compared to just 14 percent if all cars are private AVs and 28 percent with all on-demand cars.
  • Average speeds are projected to increase by 52 percent across the day and almost double during the morning peak (89 percent increase). Average delays in the morning peak are 99.5 percent reduced compared to when traditional cars are on the road. The network congestion improvements occur across the network, but are seen most strongly in the inner city.

Figure 3: Public transport demand – Greater Melbourne

Demand for public transport in Greater Melbourne under range of ZEV and AV scenarios.

How can we maximise the upsides and minimise the downsides?

A few of our recommended solutions to maximise the upsides and minimise the downsides of new vehicle technologies are summarised below.

  • Pricing or regulating empty running: AVs help with congestion, but not if we send them home or just let them drive by itself on roads empty to avoid parking fees. Without regulating empty trips, Melbourne could face serious congestion. Discouraging people from empty running to avoid parking fees would help avoid this problem, especially in the inner city.
  • Encourage people to use on-demand AVs: It’s critical to find ways to minimise waiting times, particularly in outer suburbs so that more people choose to use on-demand AVs. The more we use on-demand AVs, the more benefits we can unlock for our existing road infrastructure.
  • Ongoing investment in public transport: KPMG’s analysis found that no matter what new vehicle technologies are introduced, public transport is key to ensuring growing populations can access employment, health, education and other services. Access to areas with high capacity modes like rail is crucial to Melbourne’s knowledge economy and continued economic growth. Providing appealing public transport options also encourages use of on-demand AVs, with all the benefits described above.

 

"Our detailed analysis of these new technologies suggests that by facilitating their uptake, supported by appropriate policy and regulatory mechanisms, we can better utilise the infrastructure we already have, and take steps towards enhancing our productivity and liveability."

Praveen Thakur
Partner, Transport & Infrastructure, Management Consulting

 

Transport technology is critical for protecting Melbourne’s liveability. But the impacts of autonomous and zero emission vehicles summarised above are not unique to Melbourne. Any city in Australia and beyond can use key insights from KPMG’s analysis to help inform their transport plans and policies.

References

  1. Read KPMG’s Automated and Zero Emission Vehicle Infrastructure Advice report for a detailed analysis and recommendations of the effects of transport technologies, opportunities and threats.

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