Occupier-Edge_Ed.5

companies to take advantage of lower

real estate costs that come with less

convenient locations. This will, of

course, dramatically impact the trucking

industry as driverless vehicles are able

to carry freight 24/7 with reduced labor

involvement. In fact, Reuters reported

recently that Tesla is developing a

long-haul, all electric semi-truck with

autonomous driving capabilities that

moves in “platoons” and automatically

follow the direction of the lead vehicle.

Secondary impacts.

Beyond the

automobile industry and the consumers

of various modes of transportation,

there are other constituents who will be

greatly impacted by the proliferation

of a driverless vehicle economy. As

with any technology breakthrough

that redefines the culture, there will be

winners and losers. A few examples

of areas that may be positively and/or

negatively impacted include:

Local governments:

How are driverless

cars regulated? Do roads and highways

include driverless and driver-led

vehicles in the same locations? Does

traffic increase in certain locations

because of the increased ease,

and decreased cost, of driverless

transportation? How much rezoning of

real estate–parking lots, gas stations,

etc.–needs to take place? How is public

transportation ridership impacted?

Public safety:

To what degree will

automobile accidents, and related

injuries and deaths, be minimized or

eliminated? Where are police and

highway patrol resources reallocated if

speeding and other infractions are no

longer common?

Labor:

Which skill sets and occupations

will be reduced or eliminated (e.g.,

cab, truck, and delivery drivers, traffic

rout administrators, emergency room

personnel)?

Other questions:

Will driverless cars

be owned by its users – as most

vehicles are today – or will it be a TAAS

economy with manufacturers, ride

share services, or other companies

being the on-demand providers of the

majority of vehicles on the road? Will

driverless cars also be heavily weighted

towards EV technology, thus greatly

reducing the need for gas stations,

emissions testing, and combustion

engine mechanics?

Although there are still a lot of

unknowns when it comes to the future

of driverless vehicles, here’s what we

do expect: driverless cars will be game

changing technology that changes

more than just how we get around

town. It has the power to increase

employee productivity, free up real

estate for more productive uses, lower

the costs of technology, and greatly

reduce automobile accidents. And with

1.3 million people dying every year

worldwide from auto accidents – most

of them caused by human error – and

anticipated savings of up to $190 billion

a year from reduced health costs,

driverless cars can’t come fast enough.

driverless vehicles will ultimately

alter the demand for parking, freeing

up space in and around existing

commercial real estate. This will offer

myriad challenges and opportunities for

owners and occupiers.

Provide more location

flexibility.

When it comes to

driverless vehicles, the old saying,

“location, location, location” takes on

a diminished meaning. Sure, location

will always matter, but driverless

transportation has the power to reduce

the stresses of a daily commute and

provide opportunities for commute

time to be used more productively.

Both of these factors will make it

increasingly less important to live close

to the office for some employees. This

may increase the demand for housing,

and with it supporting retail, in the

exurbs of cities as the distance from

ones work can be increased with a

lesser impact on one’s quality of life.

Companies can open offices more

easily in less expensive secondary

markets and draw from a larger

talent pool as location becomes less

critical. The relationship with public

transportation may also change as

immediate proximity is also not as

important since driverless cars are

plentiful and can easily and cost

effectively get people from the train or

bus to their final destination.

Industrial real estate users –

manufacturers, fulfillment centers,

and warehouses – will also see

changes from the advent of driverless

technology. Just as the advent of new

energy sources allowed for mills to

move away from rivers, an abundance

of low-cost, unmanned vehicles will

open up manufacturers to less costly

areas less reliant on air and sea ports

or train lines. The reduced and/or

eliminated labor costs associated

with moving materials will allow for

Cushman &Wakefield

is the first commercial

real estate service firm

to the market with a

global comprehensive

automative SPG offering.

Its mission is to deeply

understand and address

the distinctive challenges

of the automotive sector

from labor issues, logistics,

infrastructure, technology,

credits and incentives, to

the unique requirements of

the real estate itself.

DISRUPTION