How navigating transportation shifts will steer tomorrow’s economy

How Americans get from point A to point B matters for the entire economy. What the Future editor Matt Carmichael looks at the forces that will shape transportation tomorrow, from the economics of automotive manufacturing to car culture.

How navigating transportation shifts will steer tomorrow’s economy
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  • Matt Carmichael What the Future editor
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What the Future: Transportation
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Imagine it’s 2034. Will the future of transportation be a functional one or one that rekindles our love of transportation?

We hate to say we told you so. … Nah, who are we kidding? It’s fun to have told you so. In the second issue of WTF back in 2018, we posited that there could be a “car culture war.” Ipsos’ Cliff Young wrote, “Nothing divides Americans more readily than rules and regulations. The first time someone is denied access to something they have previously taken for granted, we will have a political uprising on our hands.”

At the time, we were speaking more of autonomous vehicles (AVs), but their development has lagged projections. Not everything in that issue has come to pass. One expert predicted half of ride-shares would be autonomous by now, and … nope. In the meantime, electric vehicles (EVs) have emerged as a major political front, and people think that’s going to get worse, not better. It was a big campaign topic in the 2024 presidential election as President-elect Donald Trump suggested (wrongly) that Vice President Kamala Harris wanted to — wait for it — regulate that all vehicles be electric.

In battleground Michigan, the implication was that regulation could end the auto industry and its jobs as we know them. Was this argument what tipped the state?

A shift to EVs opens different career fields even as some are lost. You’ll need fewer oil change mechanics. But there will be more careers in batteries, power storage, technology and infrastructure construction to support changing needs.

The future of traffic

Part of car culture is that cars equal freedom. One impediment to that feeling is traffic. And any depiction of transportation in the future you’ve ever seen (up until the “Star Trek” “beaming” transporter) has starred one aspect of the present: traffic. Whether people are using jetpacks, hoverboards, AVs, e-bikes or shared scooters, they are likely surrounded by a lot of other people doing the same. After all, transportation is about moving people and moving stuff.

So, what could reduce traffic in the future?

  • Reducing the number of vehicles due to increased use of safe, timely, reliable and pleasant public transportation.
  • Reducing time spent on the road, which would mean needing fewer reasons to move. That could be due to remote work. Or virtual socialization. Or climate change making being outside unpleasant. Or building better cities that allow for more walking and alternate forms of transit and density.

Those are the options. Realistically, we’re going to need both, and neither is easy.

What would make traffic worse?

Many things could make traffic worse: adding lanes and building more roads (try Googling “induced demand”); poor urban planning; increased population; increased online shopping; failure to invest in trains and public transportation; undoing certain environmental regulations and incentives; relying on the gas tax for infrastructure funding; climate change literally melting infrastructure; return-to-office policies; and other factors.

Astute readers will note that the list of what will make traffic worse is a much longer and more “baseline continuation” list than the “solving” list was. AVs at least offer a hope that your time spent in traffic will be more pleasant or productive. 🤷

Part of the traffic problem is misaligned incentives. State Departments of Transportation (DOTs) are often funded by a tax on gas. Progress is measured in vehicle miles traveled (VMT), which has increased for decades. To reduce traffic, DOTs need incentives to lower that number. And climate policy and transportation policy are basically the same thing, as we’ll discuss later.

What can history teach us for the future?

If you look at the infrastructure of Pompeii, streets were built on a grid that was easy to understand and navigate. Some were closed to traffic to make safe pedestrian boulevards. Chariots were built to standard widths and clearances. That allowed for elevated stepping-stone-like crosswalks with enough room for the wheels to pass between. Sewage was funneled into the streets and eventually washed out to sea. So, builders made ways for people to cross without having to dip their sandals into the filth.

What do these practices have in common? They’re all related to human-centric design.

What are the business questions here?

Back to our premise of moving people and stuff, there are limitless questions. Here is a smattering of examples:

  • How do we build a more resilient supply chain?
  • Will AV trucks make up for a looming shortage of drivers?
  • Is it possible to have more e-commerce and less traffic?
  • Will business or consumers bear the cost of shipping in the long run?
  • What influence will Tesla CEO Elon Musk have in the new Trump administration?
  • Will delivery drones really become a thing?
  • What kinds of garages will people have/need in the future?
  • How will commuting change?
  • What will in-car marketing look like?

People are making economic trade-offs

Insurance costs more. Vehicles cost more (partially because they’re rolling battery-powered computers at this point). Fuel costs are uncertain. More cars now require a subscription to access popular features people used to just pay for once upfront, like remote start, navigation and entertainment.

If people subscribe to, say, Apple Music through their car maker rather than directly, how could other businesses bundle subscriptions and related offers or services with the car as a platform?

Who pays (and how) for all the deferred maintenance of our aging infrastructure? Taxpayers whine about increases, but older taxpayers, especially, paid artificially low taxes for the decades that maintenance was deferred. Now those bills are coming due with interest, and the roads and bridges are literally collapsing around us. The money to fix what we have, let alone to invest in forward-looking infrastructure, is going to have to come from somewhere.

Climate change will not make that better, my friends, as everything from pavement to railroad track switches are literally melting.

Transportation also equals time

If people are spending more — or maybe ideally less — time in traffic, what happens to all the other demands on our time?

That was a lot of questions. Got any answers?

Some…

  • Keep the humans at the center of your plans. It worked for Pompeii (until the volcano), and it could work for your city/brand/product/service.
  • Realize that how we’ll get from place to place will change, but our desire to connect with others, explore and move our stuff will evolve but will remain fundamental human needs.
  • Spend some time thinking through scenarios based on that litany of questions on the previous page. There are many plausible futures there, and they’ll all have an impact on whatever you do for a living and as you go about living your personal lives, too. We can help with that.

Because in the end, your customers (or their customers, for our B2B friends) are people who move and buy stuff and store that stuff and transport it. Many like driving, and they’re not all sold on auto-related subscriptions. Most are strapped for cash, and every dollar they spend in one category is a dollar they don’t have to spend in another.

However, the “many like driving” point has also been changing for a bunch of reasons. The number of teens getting their driver’s license has been falling for decades as social patterns change, costs go up and graduated driver’s license requirements have become stricter, taking a lot of the “freedom” out of driving.

There’s a shift where driving doesn’t equal freedom for kids who can socialize virtually to some degree. Today about a quarter of younger Americans say their vehicle reflects their personality, but that number has dipped since we first asked in 2017. This shift contrasts sharply from our past car culture.

For a weekend in August, classic car enthusiasts gather in Detroit for the “Dream Cruise” where they drive their cars up and down Woodward Avenue, which was the first paved road in the U.S. They visit haunts of yesteryear like Hunter House, a hamburger joint. But also gone are the heydays of road-tripping Route 66 and its kitschy drive-in theaters and dive motels.

So, will a future of transportation be a functional one, or one that rekindles our love of transportation? The implications for every sector hinge on the trade-offs people make in response.

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The author(s)
  • Matt Carmichael What the Future editor