The voices of Urban Institute's researchers and staff
September 14, 2018

Self-driving cars could harm low-income people if we don’t prepare for their rise

The Urban Institute will cohost the Reimagine Communities Symposium in Plano, Texas, on October 3, 2018. In a series of posts this month, we’ll explore the theme of the conference: how we can harness technology to create more inclusive communities and create pathways to economic opportunity. Other posts in this series:


Self-driving cars are expected to become commercially available within 10 years. This will change not only the way we get around but the nature of our cities and regional growth patterns. How these changes affect us will be determined by transformative factors and policy decisions spanning how we live, work, and move.

Of particular concern is how this shifting landscape will affect low-income residents. In the initial adjustment period, inequality could worsen because of the prohibitively high cost of purchasing autonomous vehicles. In the long run, any significant realignment to land-use patterns, to the job market, and to public transit could disproportionately harm people with limited means.

Housing costs and urban sprawl

Self-driving cars might alter city landscapes in ways that reduce housing costs. Parking spaces will take up less valuable land as cars can park in the suburbs in more condensed lots, and demand for cars might fall as self-driving ride sharing takes over as many experts predict.

With reduced need for parking comes fewer requirements for developers, lowering the costs of building homes and multifamily dwellings. Elsewhere, newly freed up parking garages and spaces could be repurposed for housing or other uses, further increasing supply and reducing costs in the city.

Additionally, although it’s possible that self-driving cars will make city living more desirable because getting around without a car will be simpler and congestion might decline (as occurred with the increase in ride sharing), it is perhaps more likely that the lower cost of transit both in terms of time and money will encourage sprawl into the suburbs. We saw this when highways were developed beginning in the 1950s, and it’s possible this could happen again. This would, in turn, further pull down housing costs in central cities.   

Changing job types and locations

Although this potential sprawl into the suburbs could reduce housing costs in the city, it could also take jobs with it, recreating the spatial mismatch challenges that low-income city residents faced following the expansion of highways in the 1950s, when there was a surplus of workers relative to the number of available jobs in inner-city neighborhoods.  

More directly, low-income residents that currently make a living by driving taxis, buses, and other motor vehicle transit will likely lose their jobs. Other jobs might open in their place, but they will likely require higher skill levels and education, as has been found from increases in artificial intelligence and computerization more broadly.

Higher public transit costs

Although the costs of riding in a car might decline once shared self-driving cars are pervasive, increased access to self-driving cars might reduce demand for public transit, similar to the impact that ride-hailing services have on public transit once they are competitively offered in a city. This could increase overall transit costs for low-income households, unless self-driving ride-sharing cars present a viable alternative to public transit for low-income residents, which has been suggested of ride sharing more broadly.

What steps can harness the benefits of self-driving cars to spur equity?

Evidence shows that policies and programs, including the following tactics, can help us prepare for the changes to come from self-driving cars:

Stay involved in the rollout of self-driving cars in our cities to ensure access in low-income neighborhoods. For example, in Columbus, Ohio, a new US Department of Transportation grant is connecting people in low-income neighborhoods to neighborhoods of higher opportunity by running an autonomous bus between Linden (an area of low economic opportunity) and Easton (one of Ohio’s largest job centers).

Support increased investment in affordable housing and homeownership support programs. This will help low-income residents remain in or move to neighborhoods with opportunity as jobs move and as transit costs change.

Increase investments in education and job training programs that work (like apprenticeships). As jobs become more skill based, low-income residents will need access to training that allows them to secure a good job in a changing labor market.

Strengthen antitrust laws, increase investments in public research, and consider alternative taxing schemes. The profits that innovators earn in excess of the cost of innovation are a key source of the growth in inequality, and research shows that taxing them could ensure that the benefits of technological advances are widely shared. Antitrust laws and increased investments in public research could also ensure that the returns to technology benefit the public at large.

Monitor changes as they occur and respond quickly to evolving needs. If high-income residents begin a mass exodus to the suburbs, city leaders should be prepared to address spatial mismatch problems. But if people start moving into cities at higher rates, we should urge our leaders to preserve and develop new affordable housing before low-income residents are priced out.

Capital One, a funder of the Urban Institute and cohost of the Reimagine Communities Symposium, provided support for this work.

Illustration by Filo/Getty Images

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