Do you want your bonds to kill your city’s bond ratings?

Do you want your bonds to go into default?

Do you want to be responsible for a backlash against the mayor/council for not planning for a future you should have known was coming?

Do you want your city to become even more clogged with traffic, but this time the cars are empty and slowing everyone down?

Ignoring autonomous vehicles (AVs) may be possible today, but just know, they are coming soon–and by soon I mean this year (2017). While AVs may not yet be mainstream transportation today, do not count on it just being something your grandkids use. Cities have to start planning now, or their leaders will be saying YES (begrudgingly) to those questions above. A new report out from the folks at the Sustainable Cities Initiative at the University of Oregon is looking to help you deal with these questions. You can read our report here.

AVs will be on the roads in substantial numbers in the next 10 years, and taking on a substantial share of transportation needs in 20 (or less). Uber wasn’t a ‘thing’ that we did until March 2009—and not a lot of us were using it then. Today people are selling off one or more of their cars because they just use Uber/Lyft instead. And while we like the idea of having the freedom to go whenever, wherever we want in our cars, they are not used all that often—sitting idle 95, yet costing us ten percent of our budgets.

E-commerce is here and growing larger each year. When Amazon started in the 1990s no one could have imagined that this online bookstore would transform into one of the world’s largest companies. Brick and mortar stores nationwide are closing, transforming our Main Streets and shopping malls. In some cities, you can make your order and receive the goods the same day—this trend will certainly extend to more and more people globally as the reach of e-commerce extends further and further into our shopping habits.

The combination of e-commerce and AVs will (and may already be) reshape our cities.  Regardless of your desire to use an AV or not or shop on Amazon, they transformations will have an effect on our cities. Many cities have huge investments in on-street parking and parking garages to allow us to park near where we are going. Yet if an AV is driving us and dropping us off at our destination, cities won’t get to collect that revenue anymore and have a hard time paying off those revenue bonds. Think this is a problem for the future? Think again! Cities are already feeling the heat because so many people are using shared vehicle services like Lyft. Airports have seen substantial drop offs in parking revenue, taxi revenues, and rental car revenues. This is without accounting for what AVs will do, just what shared vehicles services are ALREADY doing—and they are just getting started.

This report takes you through a city’s budget—both revenues and expenditures—and starts to think about what could happen as AVs become common place and e-commerce takes on an even larger role in retail. City leaders have to start planning for this future now if they want to have a voice in what AVs/e-commerce will do to their cities. AVs create a “potential rat’s nest of a budgeting challenge” (Fung 2016). This paper seeks to begin the process of untangling that rat’s nest, and provide the foundation for future phases of the project that will consider potential additional revenue sources to fund the infrastructure changes that may come from the integration of AVs and more widespread e-commerce.

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Benjamin Y. Clark is an assistant professor of public administration in the School of Planning, Public Policy and Management at the University of Oregon. His research focuses on autonomous vehicles, public sector crowdsourcing, 311 systems, coproduction, local government management, and budgetary/financial management.  He teaches public management, public policy, and the applied research Capstone course. He has been an Executive Committee member of the Association for Budgeting and Financial Management (ABFM) since 2013. Prior to his career in academia, he worked for nearly a decade as a public servant at the local, federal, and international levels.