CADA responds to Denver’s mobility effort announcement that challenges vehicular commuters

August 2017

Denver Mayor Michael Hancock’s Mobility Plan—introduced during his State of the City Address July 12 — is big and bold, yet largely misguided, it seems.

To attack traffic congestion and air pollution,
Hancock seeks to invest $2 billion in the next several years to change how Denver citizens get around, significantly moving them out of private automobiles.

The Mobility Action Plan’s goals include getting 30 percent of commuters to walk, bike or use transit. He estimates this will cut traffic fatalities to zero by 2030 and reduce emissions 80 percent by 2050.

All are significant goals, we agree. However, we want to ensure that his strategies are based on realistic assumptions and question whether the marketplace is a
better tool than government action for accomplishing
them.

Hancock’s plan: People will walk, bike or bus it

The plan assumes that combined, economics and congestion will prompt more people to walk, ride bicycles or take transit (mostly the bus). It also assumes that people will abandon private vehicles for
what’s known as Mobility-as-a-Service (MaaS), which includes car sharing and services like Uber and Lyft — and that MaaS will soon be offered with autonomous
electric vehicles.

It’s the second assumption that seems most uncertain. Unquestionably, transportation is poised for radical changes.

Many studies indicate that hybrid and electric vehicles (EV) eventually will replace gasoline-powered cars. It’s already happening, partly as the result of federal standards and partly because technology is making them practical alternatives with
good performance, competitive range and reasonable prices.

All major automakers already offer hybrids and EVs. Colorado’s new car dealers welcome the opportunity to sell these vehicles to consumers who are becoming more aware and interested in what they offer. We think the mayor’s strategy to make them more desirable by building more charging stations is required, if this technology is going to gain acceptance. When gasoline prices start going up again — and they will — the auto industry will be ready
with great alternatives.

Beware of unintended consequences and hurdles

Cars still need roadways. Denver spends a lot of its property tax dollars on street maintenance, while state and federal roads are funded by gasoline taxes. That model will have to change as EVs and hybrids —
not to mention bicycles and buses — become more prevalent.

Cars are becoming more autonomous but aren’t fully autonomous yet, because the technology isn’t perfect. Questions remain about mixing autonomous and driver operated vehicles. The insurance industry will need to catch up.

Some studies predict that 95 percent of all vehicle miles traveled will be through MaaS in autonomous EVs and one continuously circulating vehicle picking up and delivering passengers will replace 10 personal
cars. It’s not realistic to believe that a MaaS vehicle will always be full and that for every drop-off there will be a pick-up right there ready to ride. Any Uber or Lyft driver will tell you lots of empty miles are driven between passengers.

Privacy and productivity issues

Also, there are issues of privacy and productivity. Futurists say people will share rides. But research shows that the desire for privacy, including the perception it’s safer not to ride with strangers, is
one reason people won’t ride the bus. It’s assumed people will use the time saved by driving productively, but how many people are using their time on transit working instead of surfing on their phones or listening to music?

Potential economic implications

The impact on the economy could be devastating. The auto industry accounts for more than 20 percent of all sales taxes collected and that will evaporate, leaving less money for street maintenance, including
bike lanes and sidewalks. If everyone uses MaaS, transit use will plummet and the result could be more, not fewer, vehicles on the road.

What’s more, thousands of people will need to find new jobs. These are issues that need to be addressed before large sums of government money are spent in a massive social engineering effort. The auto industry is adapting as the market demands. And as business people, we believe the marketplace is where lasting and beneficial change will be made. The economics have to be right for consumers, not just government, and many big-picture questions have yet to be answered.

Stay vigilant,

Ed Dobbs, Chair
Colorado Automobile Dealers Association