Traffic revenues – including everything from parking and traffic camera fines to revenue from traffic citations to gas taxes and vehicle registration and licensing fees – currently net the 25 largest cities in the U.S. nearly $5 billion in auto-related revenues annually, or about $129 per person. New York City, for example, generated $1.2 billion in 2016 alone, while Chicago, New York, and the District of Columbia all report camera revenues currently exceeding $100 million a year.
All of this will change, however, as autonomous vehicles and transit become more prevalent. Once widespread adoption occurs, the former Chief Financial Officer of Chicago expects cities to lose an average of 10% to 15% of operating revenues. Clearly, the combination of an electric vehicle world and the sharing economy it will produce will have a powerful impact.
Not surprisingly, cities identified as most likely to experience the steepest revenue losses were densely populated localities where parking comes at a premium. That would mean that cities reporting the highest related revenues per capita, such as San Francisco at $512, Washington DC at $502, and Chicago at $248 per person, will be among the hardest hit in terms of diminished revenues.
But resort towns, most of which are heavily reliant on parking revenues, will also be hard hit. In Rehoboth Beach Delaware, for example, parking-related revenues account for 30% of the current budget. Similarly, revenues for parking collections, traffic fines, and other court penalties – which today are 29% in Rehoboth Beach, 35% in nearby Dewey Beach, Delaware, and a whopping 38% in Cottage, Maryland – will be hard hit.
Add to that the fact that The Aspen Institute Center for Urban Innovation anticipates some riders might forego transit altogether. If ride hailing and ridesharing companies do not have to pay drivers, they could potentially offer transportation at a price that is so low that people will choose to travel by car all the way to their destinations, draining transit ridership revenues.
Bottom line: cities and towns both big and small across our nation must come to grips with how they will handle the revenue fall-off that autonomous vehicles and transit are likely to create in the not-too-distant future.