I've been asking myself for 5 years now, what new industries will pop up in light of electric self-driving cars taking over our transportation system. I compiled some ideas and research below. Let me know your thoughts in the comments.
1. Expect oil prices to plunge
As more and more electric cars come online, less oil consumption is needed. Even if self driving cars are gas powered they'll be able to navigate and carpool more efficiently. As petroleum prices fall from loss of demand, expect other crude oil by products prices to rise. Crude oil refining production will fall due to gasoline being its main driver as seen in the graph below.
So where is the opportunity? Bet on Jet Fuel prices rising, airplane companies either going out of business or really focusing on buying planes with the best fuel economy. Look into companies with alternative methods to creating lubricants and plastics, as they will become more viable in the future.
2. No more metered parking
Driverless cars will drop passengers off at their destination and go find parking elsewhere (or remain on the road if they are part of a ride-sharing program). The U.S. has about 144 billion square feet of total parking, which represents up to one-third of the total real estate in some large cities. Reports estimate self-driving vehicles have the potential to reduce parking space by about 61 billion square feet, which is about the size of Connecticut and Vermont combined. A reduction in the demand for parking can result in reclaiming this valuable real estate for more beneficial social and economic purposes. However, it also means significantly less money for cities through parking tickets. In 2012 alone, Washington, D.C. collected $92.6 million in parking ticket revenue.
So where is the opportunity? Get ready for cars to be taxed based on time on the road. Expect a tech company to develop a national or state level collaboration project to meter the time cars spend on the road. This will allow municipalities to recoup money lost from parking, speeding and gas tax revenue. Expect street front businesses to gain real estate value and heavy parking density areas to lose real estate value.
3. Real Estate, urban to suburban or suburban to urban?
As said in the CNBC article below, many think that self driving cars will provide easy commuting for suburban dwellers, which will entice urban dwellers to switch to the suburban life. I would like to propose the opposite point. I think that without the need of car ownership and self driving car fleets being able to provide fluid (non-stationary) transportation out of the city, it will become more popular and less expensive to live in the city.
So where is the opportunity?
Expect parking minimums to decrease or go away altogether, providing opportunities to buy real estate in areas previously off limits to residential building project because of limited parking spaces. Watch for growth in urban areas with viable non-limiting transportation system (self-driving fleets). Look for a new development in drop off zones and mechanics to effeicently and effectively transition passengers. Look for service areas that take the place of gas station, that recharge or replace batteries of cars. Car interior designers should be focused on making cars more office or home like to provide additional sleep, play or work time while passengers are riding.
CNBC Article
Real Estate:While freeing up parking space may present an opportunity, real estate agents should be worried. Faster and easier commutes will shift residential value from properties in urban centers to those in suburban areas. In commercial real estate, spaces currently predicated on human drivers will be converted to other uses. For instance, PARTNER Engineering CEO, Joe Derhake, has suggested there will no longer be a need for gas stations on busy street corners to attract people's attention.
More to come tomorrow....
