Presentation from Drexel School of Economics/Econsult Solutions, Inc. Joint Urban Economic Policy Conference

1. Infrastructure Investment,
Technological change, and
Agglomeration: Implications for
Cities
Richard Voith
May 12, 2017

2. Uncertainty: At Record Highs

3. Sources of Uncertainty
• Policy
• Technology
―TNC’s: Uber, Lyft etc.
―Automated Vehicles
• Changing Expectations

4. Cities, Agglomeration and
Transportation
• How Will Technological Change Affect Agglomeration?
• How Will Technological Change Affect Infrastructure
Needs?

5. Cities, Agglomeration and
Transportation
• Agglomeration: Key Basis for Cities
―Density  Higher Productivity
• Agglomeration: Dependent on Transportation

7. State of Cities: Philadelphia
Population

9. Policy: Infrastructure
• Highway Trust Fund Is Tapped Out
• American Society of Civil Engineers:
―Infrastructure Grade D+
• $1.44 Trillion Short on Investment through 2025

10. 10 Year Treasury Bill Rate

11. 0
500
1,000
1,500
2,000
2,500
3,000
1960 1965 1970 1975 1980 1985 1990 1995 2000 2008
Miles of Paved Roads

12. Average Estimated Fuel
Economy by Model Year

13. 0
0.002
0.004
0.006
0.008
0.01
0.012
0.014
0.016
1932
1934
1936
1938
1940
1942
1944
1946
1948
1950
1952
1954
1956
1958
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
Cents
Gas Tax Revenue per Mile
Traveled

14. Transportation Infrastructure
and Cities
• Pre 1950: Falling transportation costs, growing central
cities
• 1950-1990: Falling transportation costs, growing
metropolitan areas and declining central cities
• 1990-2015: Stabilizing transportation costs and
stabilizing central cities.
• What next? Impacts of TNCs

15. Development of King of Prussia

16. Development of King of Prussia

17. Relative Density
• John Wanamaker Retail
Store
―2 Million Square Feet

18. What Will Disruption in the
Transportation Industry Mean for
Cities and Regions?

19. • Optimization
• Customer Expectations and Communities
Data Driven
Transportation
• Ridesharing & Transit as Substitutes
• Ridesharing & Transit as Complements
Ridesharing
Disruption
• Automation substituting for labor
• Changing spatial needs
Automation
Disruption

20. 20
A.V.’s
Ridesharing
Landscape
Turmoil for
AgenciesCustomer Expectations
Electric Cars
Connectivity Convenience
Real Time
Information
Mobile Apps

21. Transportation in the Digital
Age: 3 Main Players
1 Increased Options 2 Mobiles
3 Cashless Transactions

22. Transportation in the Digital Age:
Increased Options for Consumers
From Binary transportation modes
(car or transit)
Private
Car
Public
Transit
OR
To Multi-modal
(transit and rideshare and bike and
car share and…)

23. Transportation in the Digital
Age: Loss of Public Benefits
Greater Options
Decreased
Service Rates
Longer Wait
Times
Less Usage

24. Transportation in the Digital
Age: Loss of Public Benefits
Less Transit
Loss of “Agglomeration”
Benefits
Less Density

25. Infrastructure: Automation
Less need for
parking
Changing road
design
Multiple
passengers in
shared cares
Roadways
more densely
used
May reduce
infrastructure
needs
Transit
Seriously
Challenged
Need
sophisticated
automation to
compete
May change
transit
investments
Transportation in the Digital
Age: A Changing Landscape

26. Infrastructure: Automation
• Infrastructure Savings Depends in Part on
– Future Land Use Patterns
– Status of Transit
• Congestion increase if transit uncompetitive-> more
infrastructure
Transportation in the Digital
Age: A Changing Landscape

27. Land Use & Development
Patterns

28. • Remote parking
• Denser centers (maybe)
• Lower travel costs -> More travel,
greater decentralization
Automation: Land Use &
Development
Transportation in the Digital
Age: A Changing Landscape

29. • Cannot satisfy demand for larger scale
transportation
The Next Big Digital Implication:
Autonomous Vehicles
Transportation in the Digital
Age: A Changing Landscape

30. • Potential agglomeration loss
• Access for lower income citizens could be
adversely impacted
Automation: Land Use &
Development
Transportation in the Digital
Age: A Changing Landscape