"There is a palpable risk that the smart transport revolution could aggravate congestion, driving, and parking problems, especially in city centers, due to new journeys and empty journeys (by autonomous vehicles), and because people will prefer car services to public transport, traveling on foot, and riding bicycles," a new report on preparation in Israel for the smart transport revolution by the National Economic Council in the Prime Minister's Office states. The Prime Minister's Office released the report today.
The report recommends forming a clear policy in spheres of life that will be affected by the transport revolution. The report's authors believe that such a policy will help maximize the economic advantages of the switch to smart transport in areas such as the campaign against traffic accidents, increasing productivity, and lowering the cost of living. National Economic Council chairman Prof. Avi Simhon says that the maximum savings for the economy resulting from such a policy could reach NIS 100 billion a year.
The report was written by Dr. Roni Bar when she was a Mimshak fellow on the National Security Council as part of a research study by the Council setting forth the possible scenarios for effects of the switch to autonomous, electric, connected, and shared vehicles in transport, planning and building, energy and the environment, cost of living, and safety.
One key word in the report is uncertainty, first of all about when autonomous and electric vehicles will become dominant in the private car market. The National Security Council believes that electric and autonomous vehicles will become significantly cheaper within five years, and that around 2030, more autonomous and electric vehicles will be sold than ordinary gasoline-powered vehicles driven by people.
In view of the uncertainty, the report presents both an optimistic and a pessimistic scenario on each of the main areas that will be affected by the transition to smart transportation. For example, where road congestion is concerned, the optimistic scenario assumes that the new technologies will facilitate more efficient muse of road capacity, so that congestion will decrease. The pessimistic scenario, on the other hand, is based on an increase in demand for private vehicles, because traveling in autonomous and electric vehicles will be much cheaper than traveling in current private vehicles. First of all, the most expensive element in taxi rides is the cost of the driver. Secondly, the costs of maintaining and operating an electric vehicle that does not consume gasoline are substantially less than the cost of a gasoline-powered vehicle.
In addition to the congestion problem, the switch to smart transportation is big news in at least three other important spheres: traffic accidents, labor productivity, and the cost of living.
In the struggle against traffic accidents, the smart car will cause a real revolution; estimates are that eliminating the human factor will reduce the rate of traffic accidents by 90% - 360 people now killed each year on the average in traffic accidents will remain alive. The resulting saving in costs will is estimated at NIS 15 billion. Another important improvement is in labor productivity. Hundreds of work hours now wasted a year in driving to work will instead be used for resting or working.
A no-less-important subject is the cost of living. Cars are families' second largest expense after housing; in two-car families, they are the largest expense. Buying one private vehicle increases average monthly spending per household in Israel from NIS 548.24 to NIS 2,365.19, and buying a second car raises it to NIS 3,757.30. It is believed that many families will be able to do without a second car by using one car more efficiently, because it can move by itself between the various stops.
In planning and building, the report states that parking needs are likely to fall significantly as a result of the revolution in vehicle use patterns. This will not only save on construction of parking lots and private parking in homes, but also streamline the use of land and parking areas and save on traffic lanes, which can be used for more residential construction and more green spaces.
In one sensitive area, however, the National Security Council expects no change. The state is not likely to forego its estimated NIS 40 billion a year in revenues from vehicle taxes. Although autonomous and electric vehicles will be much cheaper than the existing vehicles, the state will take some of the difference through taxes. "I do not foresee Israel giving up the revenues from vehicle taxation," Simhon says. "Since we still need money for education and defense, we cannot afford to give up revenues."
Simhon explains that the drop in the vehicle price will be partially offset by higher taxes, so that the state will in effect share the saving in cost with the private vehicle owner. This means that even if we pay less in shekels, the tax rate as a proportion of the vehicle price will increase, not decline, as a result of the smart transportation revolution.
Published by Globes, Israel business news - en.globes.co.il - on July 28, 2019
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