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Self-Driving Cars Are Going to Beat Up on Trains, Too

Got a gig in the global passenger rail industry? Prepare for an “enormous shakeout.”

A London commuter awaits her train. (Neil Hall/Reuters)

One reason it’s so irresistible to speculate about what self-driving cars will do to our lives is that there aren’t any around yet to show us how wrong we are: The prototypes from Google, Uber, and others are tantalizingly functional (and the feds have officially cleared a lane ahead for them, regulation-wise), but real-deal full autonomy remains safely tucked in the future.

Much of the speculation has revolved around how autonomous vehicles (or AVs) will disrupt the car industry, and the world that industry created—that is, the auto-centric neighborhoods, shopping districts, and business centers of the U.S. But a new report released Monday from the Boston Consulting Group concentrates on the potential impact AVs will have on an older, globally popular form of transportation: passenger rail. “Will Autonomous Vehicles Derail Trains? the report asks. Short answer: Oh yes.

For Americans, this might seem like a curious question, since we’re under the impression that passenger rail got its lunch money stolen when the Interstates came along nearly 60 years ago. Which is true, even though Amtrak makes a little over 30 million passenger-trips a year, and commuter rail lines contribute perhaps 500 million more. But the E.U., India, Russia, China, and Japan all have enormous rail riderships, and when you start to count all the sundry subways, streetcars, light-rail lines, and other things that roll on tracks, you’re looking at a formidable heap of passenger rail infrastructure worldwide. What becomes of all this steel and rolling stock when the robots come?

Well, let’s say it’s not looking like a good time to be investing in this particular industry. “We expect AVs to constitute a tangible threat to passenger rail within the next one or two decades,” the report authors write.

Trains will remain the least expensive mode of transportation during peak times in urban areas. But during off-peak hours and in rural environments, they will lose riders to AVs. Rail companies may even end up in a downward spiral: with reduced overall ridership, rail companies’ overall unit costs for all remaining passengers will escalate because of the inherently high proportion of fixed costs in operating a train network. This could trigger price increases or reduced schedules, which would result in a further reduction in ridership. The off-peak impacts of declining demand in rural areas could reverberate throughout the entire rail network, since it’s difficult to operate fewer off-peak trains without affecting the costs of peak trains.

It’s not going to happen all at once, but once the death spiral begins, it ain’t stopping, because the fixed costs of running a railroad are so enormous: “Even relatively modest reductions in passenger volume could turn respectable profits into massive losses; for example, a 20 percent reduction in passenger volume could turn a 5 perfect margin into a –10 percent margin.”

These researchers envision a self-driving revolution that begins in the hinterlands, because intercity highway driving is much easier for a machine to master. Once door-to-door capability is established on surface streets, the disruption will spread to more dense areas.

Over time …  as AVs’ technology improves so that the cars become fully operational in residential areas, AVs will pose a threat to subway, commuter, and regional trains. At that point, AVs could conceivably cause an enormous shakeout in the rail industry.

From a passenger perspective, the researchers attempted to draw cost comparisons between these yet-unbuilt AVs and more traditional ways to drive, in order to show how quickly robo-cars will cannibalize rail ridership. Like many others inside the car-making and ride-hailing industry, the team expects self-driving vehicles to be shared, fleet-type conveyances used in carpool-type arrangements. Since transportation costs vary widely in various countries, they chose to use the Netherlands as a representative example, where gas is pricey but rail costs are relatively low. As such, their results should be conservative when extrapolated for other markets.

According to their analysis, car pooling is the big cash saver: To save money you’d need to have three passengers, compared to being driven around solo in an AV, or owning one outright. (Most train commuters would also see time savings, because of the elimination of the journey to and from the station.)

Cities appear to be the last redoubt for passenger rail, especially highly populated and densely built ones with strong existing mass transit; there, no car, manned or unmanned, can compete. As the chart below shows, the costs of riding in AV go down as you take on more passengers, but during rush hours in urban areas, rail transit would still win the day, thanks to its ability to move millions of people around relatively quickly.  

Citing places like Singapore, where the government is pushing the notion of driverless vehicles as tools to ferry transit riders on their “last miles” to home, the report encourages rail officials to brace for disruption by rolling out their own AV-based services at stations. Indeed, in the U.S., ride-hailing services such as Uber and Lyft are already making deals with municipalities to secure these kinds of complementary arrangements with public transit.

This is, of course, a golden age for making guesstimates about the creative chaos soon to be loosed upon our roads and rails: In a pair of op-eds last week, the economist Tyler Cowen seconded the case that AVs will be sprawl-mobiles that accelerate the growth of farther-flung suburbs, while Uber CEO Travis Kalanick, who’s eager to get human drivers off his payroll, imagined pooled AV’s liberating cities from the suffocating siege of gridlock and bringing on an urban renaissance. Right up until the moment these magic vehicles drive themselves to our doors, we’ll have to content ourselves with wondering right along with them.

About the Author

  • David Dudley
    David Dudley is a senior editor at CityLab. Previously, he was editor-in-chief of Urbanite magazine and features editor for AARP The Magazine. He lives in Baltimore.