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Wireless connectivity can produce intelligent transportation systems and smart cities

Connected and automated technologies have the potential to revolutionize transportation systems into safer, cleaner, and more efficient systems. That transformation will center on vehicle-to-vehicle (V2V) as well as vehicle-to-infrastructure (V2I) connectivity. While some cities have already taken the first steps in this process, there are several issues that interested municipalities must consider to create fully functional connected cities—also known as smart cities.

The following excerpt from Milliman consultant Christine Kogut’s article “Connected cities: A path for local governments” highlights these issues. In the article, she also discusses the benefits of creating connected cities and possible sources of funding for them.

Enormous improvements in transportation are within reach, but for these gains to be fully leveraged, local municipalities will need to start considering a range of issues that cut across technology, infrastructure, budgeting, zoning, social balance, and risk management among others.

Connected vehicle infrastructure. These elements typically focus on deploying roadside communications equipment, installing a fiber backbone in roads, implanting street and traffic signals with sensors or other connective devices, expanding broadband capacities, developing detailed road mapping services, and having data services to collect and process vehicle data.

Zoning and land use. As shared ownership and on-demand ride services become more popular, the space needed for parking could decline, but the need for pick-up and drop-off areas could increase. Further, fully automated vehicles that can park themselves tightly together may mean that smaller parking facilities will be required in downtown or congested areas. Municipalities may be able to repurpose these facilities or rezone them for other commercial or business use.

Changes in revenue streams. Revenue from moving violations and parking may also fall as connected and automated vehicles with system controls linked to motor vehicle laws and speeds come on the road. Municipalities that depend heavily on these sources of revenue will likely need to rethink their funding models, perhaps shifting to sources other than the transportation industry or to more mileage-based user fees, congestion pricing, and/or use of tolls.

Staffing. With safer connected and automated vehicles that less frequently stray from motor vehicle laws on the roads, fewer on-the-beat police will likely be needed to patrol the roads, but more human resources would be needed to support back-office and in-the-field traffic and system operations.

Condition of current infrastructure. Municipalities with well-maintained road stock have an advantage over their counterparts that have pot-holed and poorly marked roads, which have and continue to be an obstacle to developing fully automated vehicles.

Legal and regulatory issues. While federal and state officials unravel issues related to CAV [connected and autonomous vehicles] safety standards, cyber risks, and privacy, local officials will also have to grapple with more grassroots issues such as determining procedures for ticketing an automated or driverless vehicle.

Public benefit. For a city’s entire population to benefit from advances in transportation, municipalities will also need to make accommodations for bike and ride sharing and on-demand rides–services on which mass transit users typically rely.

Planning. Because of the long lead time to full automation, planning needs to be flexible. For example, a 30-year municipal bond issued today to fund a parking garage may not deliver on the revenue stream if only current use patterns are considered in modeling the revenue streams. Likewise, transportation needs and vehicle miles driven could be affected by the adoption of financial incentives like pay-per-mile driving, increased vehicle occupancy from shared rides, increased appeal of public transit stemming from new first-and-last mile solutions, the public’s willingness to commute longer distances in hands-free automated vehicles, increases in empty passenger or cargo loads on return trips, or reduced bundling of trips.

Pooling autonomous vehicle risk

The production of autonomous vehicles is shifting the responsibility of automobile-related insurance risk. Some manufacturers have already stated that they would assume liability for accidents caused by faulty technology in their cars. However, autonomous carmakers would likely spread that liability out among the suppliers of the cars’ software, systems, and devices.

According to Milliman’s Chris Kogut, a Supplier Product Liability Autonomous Share (SPLASh) insurance pool may help manufacturers and suppliers effectively manage the risk associated with autonomous car accidents.

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