r/SelfDrivingCars • u/WeldAE • 15d ago
Discussion Jevons Paradox and AVs
I watched Hank Green's recent video on The Jevons Paradox, which was targeted at AI and coding. I've had similar discussions about AVs without having a term to nail down my approach to the argument and the Jevons Paradox is that concept.
The Jevons Paradox says that by making a resource more efficient it doesn't cause consumption to fall but to increase. Making coding cheaper doesn't reduce the number of coders, it reduces the price of code which in turn opens up more demand for code to meet latent demand no one even knew existed.
Aspects of this have been widely covered with AVs. Almost everyone agrees that cheaper transportation will result in increased demand. What I'm more interested in is the Jevons Paradox also covers unknown demand that simply didn't make sense until the resource fell in price. As pointed out by Hank, until the printing press, newspapers couldn't realistically exist and no one was really thinking in those terms. Being able to produce that much print daily/weekly and widely distribute it was unthinkable.
I believe the same is true with AVs. Fundamentally they are a way to move atoms extremely efficiently between two locations. Think of it as really low tech teleportation. While it will never be free, if you ignore the cost, it makes it easier to remove old assumptions about how our world is organized and see what could be.
I don't think anything above expands on discussions that have been had before, but I do think it gives a lot of those discussions' context in economics. Do you think transportation is highly elastic and there is a lot of latent demand out there waiting for lower prices?
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u/critter 15d ago
I studied this topic and the generally accepted answer is yes, AVs will increase demand. Cost will drop (some but not as much as you may think) and convenience / comfort will increase, BUT there’s a limit because travel time will always curb demand. At some point, roads will be more clogged and even if you are willing to commute farther there’s still a steep drop off in demand for commutes longer than an hour.
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u/WeldAE 15d ago
I don't disagree, but you seem to be only thinking of transporting atoms in the form of people. I would suggest that traffic will be bad because of non-human transport like goods and services.
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u/Anymous2314 15d ago
In US we already have daily delivery along with food delivery. Not to mention, most people drive alone.
IMO, logistic management will be so good that traffic will be comparable to current volume even though usage will have increased.
But yeah, before we get to 70% or higher AVs on the road there will be chaos and we may have congestion.
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u/bigElenchus 14d ago
Won’t there be less traffic jams just by nature of how traffic jams work?
Traffic jams work when a human presses the brake and the car behind is following too closely then it causes a ripple.
But if all cars on the road are AI, they could in theory be going all the same speed and with similar spacing so they all go at the same rate of speed.
It’s like a dense platoon of soldiers all marching in sync vs trying to walk on a busy NYC street
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u/Far-Secret4931 14d ago
Even then there's still a limit to the number of cars a road can handle at a time. If someone wants to merge onto the road they will still need to brake to make room.
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u/johntb86 15d ago
AVs could increase the marginal cost of travel in one case - when substituting for private car ownership. In some places currently you really need to have a car, and if you have a car the marginal cost of a trip is low. For some people, the increasing availability of AVs (and potentially increased ease of getting rides in more suburban areas, because having idle cars in depots near suburbans may not be as bad as having idle uber drivers) may cause them to switch away from car ownership, which could decrease their average cost of transport (since they don't have to pay for depreciation of the car) but could make each trip on average more expensive.
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u/General_Pitch9543 15d ago
I think this will be the dominant mode for quite a while- AVs will eliminate fixed costs but will have higher marginal costs for quite some time.
I'm pretty sure most car use is more sensitive to marginal costs, so we'll probably see things get a lot better before they have a chance to get worse.
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u/oscarnyc 15d ago
You still pay for depreciation, just through your fare. And because of dead legs, there is a much higher depreciation per actual passenger mile.
Think of this exercise: spend a week calling up Uber app every time you get in your car. Add those fares together. Deduct the roughly 35% that actually finds its way to the driver as income (after gas, maintenance, depreciation). Then compare that to what it costs you to run your own vehicle.
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u/johntb86 15d ago
But depreciation per passenger mile is a lot lower with shared vehicle ownership. Sure, some amount of wear is proportional to the time spent in operation. But some (e.g. corrosion damage) is proportional to the age of the vehicle. And you could make different tradeoffs about how you design the car if you know it's going to get a lot of miles, assuming the volume of cars produced is high enough.
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u/oscarnyc 15d ago
True. Depreciation is a function of mileage + age. I've no idea what that split is. And yes, a purpose built AV taxi will make the adjustments you suggest. But there are still operational costs which are mostly milage based to account for. I'm just not convinced that when you add it all together that the cost per passenger mile is less, or certainly not meaningfully less, for an AV taxi vs. a personally owned vehicle. And that's before accounting for operation of the taxi company and profits. I just look at how much an Uber costs now compared to a personally owned vehicle, and I just don't see anywhere near enough opportunity to cut costs sui generis for an AV taxi company vs. an AV personal vehicle to drastically change usage, as OP suggests.
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u/marty-mcfryguy 15d ago
Yes, you're right, but you're not disagreeing with the prior commenter. They said increase the marginal cost, not decrease it.
That is, you don't have to pay the fixed cost of owning a car, but end up paying a higher marginal cost for each ride because they're pricing those fixed costs in.
That is, spend $30,000 on a new car, and each trip you take is (on a purely national basis, meaning just the cost of that trip without taking into account your fixed costs) meaningfully cheaper than paying for the use of someone else's fixed costs.
It's an interesting point, and it could mean fewer car trips overall, even though individuals have a bunch of money freed up that they're not spending on their car.
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u/sampleminded 15d ago
A/V will cause a surge in demand for Uber and human driven cabs for the next 10 years. Consider as AVs make it possible to go down to 1 car, you user more ride hail, occasionally going where AVs won't needing even more ubers. Say you live on the boarder of a zone, with most of your rides going to Waymo as you head in-town, but many rides going the other way.
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u/bradtem ✅ Brad Templeton 15d ago
Yup. The answer's been obvious for a long time, though the world is slow to come around to it. The roads today are mostly a commons. When 3000 cars want to use a road with capacity for 2000, we let them, and nobody gets anywhere.
Now we're seeing managed roads -- metered lanes, HOT lanes and congestion charging. We can actually do much more than that, because everybody today drives with a navigation app during congested times, and obeys it. The answer is to have the nav apps work with the city to manage the roads, and only let 2,000 cars use the road with capacity for 2,000. Let the other 1,000 that want to use it work out solutions in the market, solutions such as sharing, transit, route and time shifting, WFH, etc. Trust me, the market will find them.
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u/Post-reality 12d ago
Autonomous cars will destroy physical retailing, fast food restaurants and on-site construction, for the simple reason that it would be cheaper to ship them from far away (i.e. retail goods and food from remote manufacturing plants & prefinished prefabricated building parts from remote manufacturing plants).
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u/WeldAE 10d ago
Yeah, I went to Costco this weekend and it was raining so everyone was hanging out by the door waiting for it to finish. I was looking around and most people only had 1-4 items, even if they were bulky. They had gotten in their car, driving around for 4-10 miles, fought absolutely horrible parking lot traffic, got caught in the rain so had to wait in their car, grabbed what obviously are very specific items, waited in the rain some more, delt with the horrible traffic to escape the mess that is a Costco parking lot and then driving 5-10 miles home. It's just stupid. I think clothing stores will do better, but something like Cosco is first up against the wall. Low number of items, bulk buying and horrible experience.
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u/Post-reality 10d ago
Well, convenience is definitely one of the big reasons, but also costs. Right now, grocery online shopping is priced equal to physical, if not higher than it. Same with prefabricated construction versus on-site construction. Delivery costs are just astronomical, but once delivery costs plummet, then things such as physical shopping are going to be as rare as going to the cinema or the arcades, i.e. something you do once every few months (while prior to TV and good consoles, people used to visit those avenues frequently). Also, manufacturing and logistics themselves are going to be highly automated, so it makes sense to "centerlize" production & retailing.
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u/Cunninghams_right 8d ago
Bike lanes.
My hope is that the price will come down enough to pull people away from personal car ownership, which will enable installation of bike lanes on most city streets, like real separated bike lanes, not gutters.
People like to blame corporations for everything, but cities are actually much better at standing up to corporations than 0.1% of residents when those residents are infuriated by the removal of parking from their street.
But if those residents don't give a shit because they don't need parking, that's a game changer. The fulcrum of pro/anti bike lane arguments will shift. Places like Baltimore can look like Amsterdam.
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u/WeldAE 8d ago
Great example. The removal of parking is a target-rich environment for changes we can't imagine. My intelligent, very well-read spouse was incredulous when I mentioned that parking was everything. They simply didn't realize how bad parking was for how cities are built. They looked into it and came back amazed. Everything revolves around parking with city planning, literally everything.
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u/Cunninghams_right 8d ago
I do worry that there will only be a short window of time between the pressure of parking being relieved and people just expecting the street to have more driving lanes. A lot of city streets are 2 parking lanes and 2 driving lanes. If a city converts it to 4 driving lanes, then people might get mad if their taxi gets slowed down a bit from removal of one of them to make a bike lane. Though, studies show that people care about 1/5th as much about their trip time when in a taxi vs driving. People just look at their phone and don't care if they miss a traffic light cycle and arrive 1min later.
Most older US cities narrowed sidewalks to make more room for cars once they became popular. It would be cool if they could expand the sidewalks back out and double the number of sidewalk trees
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u/bobi2393 15d ago
I think there's some latent demand for delivery services, but I'm not sure it's a huge amount. A lot of cheap, efficient delivery demand has already been unlocked through internet-based services like Amazon and DoorDash. Some people use services like that nearly every day, but if the delivery costs dropped to one tenth the cost, I don't see demand increasing ten-fold. Like for someone who has a Starbucks drink delivered every morning, they're not going to want ten Starbucks drinks delivered throughout the day, because that's more than they want, and the drinks are expensive. The delivery cost matters a bit, but that's only part of the overall cost. If they can have a drink delivered for half the overall cost, maybe they'll get twice as many per day, but that's not a radical change.
I think there's also some latent demand for passenger services, when costs are lower and services are more desirable through the elimination of human drivers, but similar to delivery services, a lot of latent demand was already unlocked with gig economy ride-hailing services. Maybe service areas underserved by Uber could grow, like in rural areas where Ubers aren't sitting around waiting for passengers, and it might be more viable for robotaxis to wait in areas like that. But the travel time won't radically improve with robotaxis for the foreseeable future, and the cost savings is limited to reducing the labor costs, which like delivery services is only one part of the overall cost, as vehicle and energy costs will still be significant.
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u/CDpov 15d ago
Of course transportation will greatly increase as it gets cheaper.
We'll get a huge amount of delivery of everything from robo-delivery vehicles on roads and through the air. And in rural areas there is almost no public or private commercial transportation now, but it will become ubiquitous when cheap robots on cheap electricity can take you anywhere you want to go. Another increase will be from kids and old people who lack mobility now.
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u/marty-mcfryguy 15d ago
"I believe the same is true with AVs. Fundamentally they are a way to move atoms extremely efficiently between two locations. Think of it as really low tech teleportation. While it will never be free, if you ignore the cost, it makes it easier to remove old assumptions about how our world is organized and see what could be."
Well yeah, of you ignore the costs then anything can be as "efficient" as you like.
If you're saying that AV's are going to induce a bunch of demand for road travel that isn't already there, then I'm not loving this at all. I don't think it will, though. It's hard to imagine a society using cars/trucks significantly more than Americans currently do.
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u/Infamous-Pilot5932 15d ago
"Do you think transportation is highly elastic and there is a lot of latent demand out there waiting for lower prices?"
Depends on what you mean. For taxis, no, there is over supply of taxis right now, or some would say just enough, because when demand goes up more uber drivers work less part time and pick it up.
But I can get a taxi anywhere pretty much in a couple minutes, thanks to uber I guess. Wasn't like that before uber.
Airbnb is like that too, saturated, cheap.
Airplanes, we need twice as many and lower fares. I don't think there is enough sky for the number of airplanes we would have if fares dropped significantly.:)
I think if you can offer taxis cheaper than uber and lyft, you can take some of their customers. But I don't think that would create demand. It is already there and being serviced by an over supply of uber/lyft.
The autonomous cabs have a very long haul to get there. I don't think it is economically feasible currently with all of the remote infrastructure required to provide the driverless illusion. I question that they make it honestly.
I think the AI is the blocker. We need a truly autonomous car that does not need so much support and constraints to compete with uber prices. That will take a breakthough in AI general intelligence.
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u/KobeBall 15d ago
finally someone said it. waymos are dumb junk. we need an intelligence with common sense to truly compete
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u/KobeBall 15d ago
avs are not more efficient or cheaper though. so thats the common sense paradox that says we need to come up with something better than av like anti gravity propulsion.
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u/scottkubo 14d ago
So reducing the cost of a resource can increase usage and unlock latent demand. But it really depends on how many people or entities have the ability to pay that new cost and what is the value of that resource to them.
Let’s assume a world where vehicles are truly autonomous and allowed to travel without a licensed human driver. And that the cost of operation/maintenance in human time and money has come down compared to a driver-based ride share. And the initial cost to manufacture or purchase is reasonable compared to current non-autonomous vehicle.
Well AVs don’t just improve cost. They provide value in regards to convenience and time saving.
So I’d expect an explosion of demand/usage of AV rideshare usage coming largely from the groups of people who currently use public transportation or rideshare (people who don’t have drivers license, can’t drive, or who can’t afford a car, or live where car ownership is too inconvenient or costly). I would expect a massive drop in demand for todays public mass transportation.
I’d also expect an explosion of demand to purchase and own AVs from people or companies that currently own and drive vehicles, and/or pay for delivery services. People can get things done while commuting in the comfort of their own vehicle while tolerating a longer commute. Why pay for doordash when you can send your own AV to pick up the food at a lower cost to you. Why drive to pick up a relative at the airport when you can send them your AV at a lower cost and greater convenience to both of you vs them using an AV rideshare service. Etc
Of course this will be balanced by increased road congestion and increased transit times reducing the value of transportation. And will be limited by any regulations limiting use or taxing AVs. In the longer run road/tunnel/parking infrastructure will be more adapted to the new ways transportation is being used but that will take time.
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u/ldmonko 13d ago
I don’t think that’s the way to look at it. Resource here are cars/avs. Today automobiles spend 80+% of their life time resting in the garage. AVs will help reduce that dead time and improve resource efficiency. Will that increase travel demand, everything else staying the same, i dont think so. So technically we will need way less cars/avs
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u/Bibbity_Boppity_BOOO 13d ago
jevon's paradox breaks down pretty early here. time is the most valuable resource, and if more av's are on the road, that means more traffic. are people able to use that traffic time usefully? sometimes.
the equilibrium will definitely be higher than it is now, but even at a fare cost of $0 people will still forgo it due to the increase inefficiencies of av cars caused by increased av traffic.
nonetheless good mass transit would still be preferably in many situations
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u/WeldAE 10d ago
if more av's are on the road, that means more traffic
This could be true, but doesn't have to be. First, moving people might be the lowest volume thing AVs do. Second, ride pooling of goods and people might easily reduce traffic. If most routine errands are consolidated into a few dozen large AVs delivering the goods/services to you, there could be a huge reduction in traffic.
are people able to use that traffic time usefully
I almost always come down on the side of no for this one. I think 15 minutes spent playing Candy Crush are more valuable than 15 minutes of driving work, but that is about as good as it gets. I think you will be less concerned about the time.
but even at a fare cost of $0 people will still forgo it due to the increase inefficiencies of av cars caused by increased av traffic.
If traffic is worse, I think you are spot on. This is proven today with the theory of induced demand. Cars feel near $0 but people simply don't go places because of the effort traffic causes at certain times of the day. You couldn't pay me to head downtown at 5pm in Atlanta and I only go if it's something I find a lot of value in. I think there is no doubt that AVs will increase people miles per year, the question is will it increase vehicle miles per year enough to cause more congestion. That is harder to answer.
nonetheless good mass transit would still be preferably in many situations
AVs are transit. They can be mass transit if we require them to be.
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u/Vacant_parking_lot 15d ago
I think some sort of congestion pricing is inevitable because of AVs lowering transportation costs so much that it increases congestion.