It’s an interesting time to be a commuter. The rise of ride-hailing companies like Uber and Lyft has transformed transportation around the world. At the same time, public transit in many American cities is carrying more riders than ever—though many operators are saddled with debt and facing significant repair backlogs. Meanwhile, more transportation tech start-ups are competing to realize their vision for the future of mobility and transform how consumers choose to get around.
So far, most government discussion has focused on regulating autonomous vehicles once they are on the road. But lawmakers will soon also have to make important decisions about public sector investments in transportation and infrastructure in light of these nascent technologies. Building and maintaining public transportation has long been a responsibility of local and state government—but will the rise of autonomous vehicles and private mobility options make much of this kind of investment obsolete?
To analyze how autonomous vehicles might change the incumbent transportation industry, let’s consider Professor Clayton Christensen’s disruption theories taught in his online Disruptive Strategy course.
One interpretation of driverless cars is that they represent sustaining innovations—or advances in technology or industrial process that incumbents often leverage through their competitive advantage. Automobile manufacturers, working with tech giants like Uber and Google, see the writings on the wall with self-driving vehicles and have made investments in these technologies accordingly. Ford, General Motors, and Jaguar have all recently partnered with Lyft, for example, with the thought that one day consumers could hail a self-driving car from these manufacturers through the service.
Self-driving cars could alternatively be considered a new-market disruption whereby a new kind of experience of automobiles—car-as-a-service—will offer a mobility option to a larger group of consumers and will gradually pull legacy customers away from car ownership into a new market. Like other new-market disruptions, customers would likely gravitate to the convenience and simplicity of this new model.
While transit agencies are fundamentally civic operations, in many ways, however, they operate like businesses. Not only are they significant employers in their regions, they also issue debt, strategically plan for re-investment, and seek ways to cut costs. Also like businesses, transit groups are subject to market forces that can lure consumers away and hurt the bottom line—something agencies must consider when making long-term spending decisions.
Public agencies invest millions of dollars in assets that should offer public benefit for decades. But if self-driving cars and alternative mobility options are the future, how should government continue to maintain and invest in forms of public transit that will be directly competitive with new operators? Will fixed-route service like buses meet the same fate of horse-drawn buggies, and how should that threat shape future public spending?
One helpful resource to assess the future of transit in light of these trends is Professor Christensen’s jobs-to-be done framework. Christensen explains that this concept is based on the principle that consumers don’t buy a product or service, they “hire” a good or service to fulfill a certain need—they make purchasing decisions based on the “why” of the product rather than the product itself. In this view, consumers don’t purchase a vehicle because they want a car, they do so to commute to work, drop their child off at school, display a status symbol, or meet some other need. By thinking about the job to be done, rather than the product, transit groups might better prepare for disruption from new entrants.
By this reasoning, public transport doesn’t necessarily have to be replaced by autonomous vehicles. Instead, it could co-opt that technology and use it to upgrade and modernize fleets to suit the consumers’ needs, thereby continuing to satisfy the job-to-be-done for commuters. Imagine, for instance, future public transit featuring fleets of driverless shuttles, using self-driving technology that would be competitive with private or ride-sharing vehicles.
Other improvements that leverage technical advancements can be applied too. For example, improved data analytics capabilities could help maximize the efficiency of public vehicles to ensure an optimal number of busses are on the road at any one time. These improvements would continue to benefit citizens in the way that public transit was envisioned, but with an updated delivery model.
By these methods, agencies could invest in new capital with more confidence in the sustainability of these decisions. It doesn’t help that many transit agencies have wrestled with fiscal troubles for years. But if these groups don’t strategically plan for the rise of autonomous vehicles, disruption could derail agencies’ efforts to stay relevant as the precipice of change approaches.