Self-driving cars are on the way, and in their wake, they'll leave a variety of entities slightly less better off. Insurance companies may be the first to feel the pinch, as less-than-risk-averse drivers are replaced with Electric Grandmothers more than willing to maintain safe speed limits and the proper distance between vehicles. And as goes the car accident, so go other areas of the private sector: personal injury/DUI lawyers, hospitals, body shops, red light camera manufacturers, towing companies, etc.
But the public sector will take the hit as well. "Flow my tears," said the policeman.
Consider the following. This past year, the City of Los Angeles generated $161 million from parking violations. Red light violations have a fee of $490. Californians caught driving under the influence are fined up to $15,649 for a first-offense misdemeanor DUI conviction and up to $22,492 for an under-21 equivalent. Cities in California collect, on average, $40 million annually in towing fees that they divide with towing firms. Simply put, the hundreds of millions of dollars generated from poor driving-related behaviors provide significant funding for transportation infrastructure and maintenance, public schools, judicial salaries, domestic violence advocacy, conservation, and many other public services.
Since California legalized driverless vehicles, Google has logged more than 1.7 million miles during the testing phase and been involved in 11 accidents, none of which were the fault of the driverless vehicle. Tesla, Mercedes, and others are not far behind. It turns out that automated vehicle technology—unlike humans—abides by the law. And that’s bad news for local government revenues. In other words, once driverless cars become mainstream, deep revenue sources acquired from driving-related violations such as speeding tickets and DUIs will decrease greatly.
Someone has to pay for the roads and other government activities, but it won't be drivers. So, as the Brookings Institution report points out, new revenue streams will have to be sought. The obvious suggestion is tax-per-mile billing, but that puts the government right in your vehicle
-- an idea that's not going to gain in popularity any time soon.
While the loss of revenue will have an impact, the picture painted here is skewed. For many years, communities have treated police departments as revenue generators
, rather than crime fighters. This has skewed incentives so badly that some small towns have become nothing more than profitable speed traps
. That's one end of the issue: the pressure (or the willingness) to overpolice minor traffic violations to keep city governments (and the police departments themselves) funded.
But that's only part of it. The situation looks rather dire, especially if one doesn't examine what's not
being said in these paragraphs. As Scott Shackford at Reason points out, the Brookings Institution report does some mighty fine cherry-picking
for its list of potentially-affected government services. Without a doubt, a downturn in revenue will affect good
government programs like public schools and domestic violence programs. But it will also cut back funding for far more dubious government spending.
What an interesting list of government-financed uses they've chosen. Notice they left off "Poorly made third-party database software that will stop working properly in less than three years and that was purchased from somebody belonging to the same frat as the assistant city manager," "police abuse settlements," and "blatant pension spiking."
These "losses" will also be somewhat offset by less tax revenue being spent on
traffic enforcement, accident response units and other related law enforcement activities. This will also mean fewer law enforcement officers will need to be employed, which should further reduce government expeditures.
The problem is that most governments aren't capable of heading off this sort of "threat" to their livelihoods, even with years of advance notice. Trimming back unneeded public sector employees won't happen until years after it's obvious they're no longer needed and will often come accompanied with expensive severance packages. New tax revenue streams won't be explored until they can be put off no longer, and often will just be added on top of existing taxes, rather than replacing those that have slowed to a trickle.
Worse, those most affected by this sort of shift will be the same people most affected by most government tax increases: the poor. The lowest income brackets will be the last to adopt driverless vehicles, leaving them the most exposed to fines for traffic violations (fines that will likely increase
as revenue dwindles), as well as new
costs like per-mile taxation. They're also most likely to see support programs they rely on suffer cuts as traffic enforcement money dries up.
The report somewhat addresses this outcome with a discussion of income inequality and the "disappearance of the middle class." While some of it is accurate and some of it is mostly buzzwords in search of a point, there's no doubt that traffic enforcement revenue will mostly be collected from those who can least afford it. After all, governments have done this for years -- something that helped fuel the outrage and backlash in Ferguson after the shooting of Michael Brown.
Is Brookings actually trying to blame the gap between billionaires and the poor for the racial tension in Ferguson? Which venture capitalist was it who told the Ferguson police to step up fine collection to rake in more money for the city's coffers? Which hedge fund manager invented the bureaucratic court system in Ferguson and other St. Louis County cities designed to wring every last cent from any indigent minority who couldn't afford an attorney? Which Wall Street "fat cat" is adding additional fees to every little fine so that getting pulled over for something as simple as not signaling a turn could end up costing hundreds of dollars for somebody who could end up losing his license and his ability to even work?
While driverless cars hold a great deal of disruption potential, when it's all said and done, governments will remain largely undisrupted. Whatever changes are made in response will arrive well after they're needed and be badly implemented. The same people who suffered in the previous system will find no improvement in the next one. While one would hope the drastic reduction in traffic enforcement would result in better, smarter policing more focused on serious criminal activity, old habits die hard. Cops will just go where the driverless car ain't, rather than trim that area of law enforcement to the minimum required. And cities will cut programs deemed expendable, rather than subject their own spending habits to greater scrutiny.