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Posted by on Jul 15, 2015 in Budget, Economy, Science & Technology | 3 comments

Driverless Cars Will Send U.S. Cities Scrambling for Revenue

Before we know it, self-driving cars will be everywhere. Once the stuff of science fiction, we’ll soon be seeing people asleep at the wheel. Or maybe there won’t be a wheel at all, and we’ll be free to climb into the back seat to sneak in some more sleep on the way to work. Or finish reading the paper. Or just take in the scenery, for once.

While Google used to be the only name in town when it came to autonomous cars, it seems every major technology and automotive company these days wants a slice of this pie. Delphi, Cisco, Nvidia, Cadillac, Volvo, and many others have signaled their intentions to jump into the driverless car arms race, and that’s a very good thing. The more competition in the market, the less prohibitive the initial costs will be for consumers.

And if you’re a consumer (you are), then you have every reason in the world to be excited about this development. For better or worse, though, local governments are not nearly as excited. Why? It’s simple: they may soon be waving goodbye to their very lucrative revenue streams from traffic fines.

Putting City Revenue at Risk

The most appealing feature of an autonomous car is that it will take fewer risks, such as running red lights, parking carelessly, or trying to drive home after indulging at the local biergarten. That’s the whole point: while the software running these things is still not ready for mass production, nearly a million miles of nearly accident-free driving tells us that computers are vastly better drivers than humans are.

So what’s going to happen to the revenue from moving violations that some local governments have come to rely on? That’s a big unanswered question.

National data on revenue collected in traffic violation fines is hard to come by, but we can look at individual cities to get a sense of the problem. Los Angeles drivers alone coughed up some $161 million in parking tickets in 2014. Cumulatively, twenty major cities in the state of California collect $40 million in fines each year. Some of this revenue is shared with towing companies, but it’s still a huge chunk of change.

As you can imagine, this is going to send state and city officials scrambling to patch the holes in their already strained budgets. Cities rely on fines to, for example, fix crumbling infrastructure (pot holes, structurally deficient bridges, etc.), but also to pay public officials’ salaries and keep important public services afloat.

With Savings Come New Problems

The good news, though, is that driverless cars will save us a significant amount of money elsewhere. Given how rare car crashes are expected to be once we’re all being chauffeured by computers, the likelihood—and the cost—of traffic accidents is expected to plummet. Right now, the average cost of a car accident with injuries is more than $126,000. And the savings don’t stop there; thanks to the anticipated savings in fuel consumption and other factors, driverless cars could save us something like $211 billion every year. That’s according to a 2013 report by the Eno Center for Transportation.

Saving all that money sounds great, but it still doesn’t solve the coming budgetary shortfall that this technology will almost certainly precipitate. Cities all across the country are going to have to get smarter about allocating their existing resources and generating revenue.

One potential solution would be to adopt some kind of per-mile tax on driving. Though our shift away from fossil fuels has been glacially slow, gas taxes are not long for this world; it’s time for a common sense alternative. Other solutions will have to tread carefully, considering how many Americans are as ignorant of how taxes work as they are hostile toward their implementation.

Regardless, we’re seeing here another example of technology vastly outpacing our ability to cope with it. It’s an exciting time to be alive, to be sure—as much for the emerging technologies as for the popcorn-worthy spectacle of watching bureaucrats scramble to catch up.

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