Gearing up for smart car revolution, Israel sees need for strategic road map

Vehicles of the future are expected to have a ‘dramatic impact,’ improving traffic, productivity, safety. But if care is not taken, it could all go downhill, warns a report

Shoshanna Solomon was The Times of Israel's Startups and Business reporter

Illustrative image of smart cars, autonomous vehicles and smart transportation (ae Young Ju; iStock by Getty Images)
Illustrative image of smart cars, autonomous vehicles and smart transportation (ae Young Ju; iStock by Getty Images)

With self-driving electric cars and ride-sharing taxis expected to one day replace private cars, Israel has published a report that aims to become the basis of a policy paper helping Startup Nation get into gear for the upcoming smart transportation revolution.

The report, published by the National Economic Council and laying out two starkly opposed possible scenarios for the effects of smart transportation on a wide range of issues, such as urban planning, jobs, health and safety, will be distributed in the next few days to all government ministries.

Its goal is to jump-start government thinking and urge the ministries toward improved coordination, becoming the basis for a nationwide policy that will lead to the “positive adoption,” over the next two decades, of connected and self-driving cars.

The advent of electric, autonomous and connected cars is already underway in Israel in a number of pilot projects, and the penetration rate is expected to increase after 2025-2030, said the report, authored by Roni Bar of the council. These vehicles may be materially different from those we know today.

Illustrative image of a self-driving car (metamorworks; iStock by Getty Images)

Although there is still much uncertainty over what form the new technologies will take, when they will mature and how they will be implemented, most global industry experts believe that they are expected to change how people and goods travel.

They are also expected to have a “dramatic impact” on the economy, including planning and construction, the energy market, state revenues, cost of living, the labor market, pollution, safety, public health and other areas, the report said.

“The aim of this paper is to discuss the significance of the penetration of autonomous, connected, ride-sharing and electric vehicles to the Israeli economy,” the report said. “And outline a wide picture of the possible implications in a variety of fields.”

It aims to create public awareness of the “significant process” that is set to take place and its potential consequences, for good and for bad. Indeed, the revolution could lead to two opposing scenarios, in which the public will either benefit from or pay a steep price for the adoption of these new technologies. Thus, steps must be taken, and an encompassing policy set out, to make sure the process will be beneficial and not detrimental.

Good vs bad scenarios

Smart transportation is liable to help cut back on traffic, the report said. Traffic costs the Israeli economy some NIS 35 billion (about $10 billion) a year, a sum expected to double by 2040 unless steps are taken. Autonomous cars can potentially help ease the jams as some of rides will be shared and the number of private cars can be reduced.

Severe traffic on the Ayalon Highway in Tel Aviv on October 28, 2015. (Simcha Simon, courtesy)

Similarly, the advent of ride-sharing and autonomous cars will reduce the need for parking spaces, as fewer families will own private cars. This could free up parking lots for other purposes, like added construction for homes, offices, bike lanes or green spaces. Electric smart cars will further reduce dependence on fuel, as well as dial down pollution and hopefully traffic accidents, the report said. Estimates say that removing the human factor from driving will lower accidents by about 90%, the report said.

In addition, people who currently spend time driving will be able to work while being driven by an autonomous car, which could positively impact productivity. And those who don’t currently own cars will become more mobile.

But without proper planning, this could all go off the rails, warns the report, as the revolution comes with a number of risks. Instead of dropping, traffic jams and parking problems could actually increase, especially in city centers, as people may decide to use shared vehicles or autonomous cars instead of riding bikes or walking.

This could lead to increased health risks as the population could get lazier with automation. In addition, if autonomous cars replace private cars and don’t translate into an increase in ride-shared vehicles, or are not accompanied by more smart mass transportation, this could add to, rather than decrease, congestion.

People employed as drivers could face layoffs, while state revenues from taxes on fuel and from automobile purchases could also drop: in 2016 the state earned NIS 41.4 billion from duties on fuel and on new cars, the report said.

To make sure the positive scenario is the one that prevails, the government must promote mass transportation solutions and ride-sharing options, and must re-evaluate how it taxes the transportation system, using smart pricing methods that take into account kilometers driven, location and time of driving, to spread out demand for such services.

The government should also set out plans to boost urban renewal, and make the most of the parking lots that are likely to free up. Transparent privacy and safety regulations must also be set out, and must involve all ministries, so operations can be coordinated.

Illustrative image of a family driving in a car (Solovyova; iStock by Getty Images)

The issues mentioned in the report affect all nations, but because Israel’s traffic situation is so bad, immediate steps should be taken to promote mass transportation infrastructure and examine interim solutions, even before the advent of autonomous vehicles, the report said.

Moreover, because the population in Israel is growing and many families have young children, it will be hard for residents to give up their private cars unless ride-sharing vehicles provide services to their doorstep. In planning for the future, Israel must make sure to take into account the needs of families with young children and those of the older population, the report said.

While Israel has so far not been a player in the automobile industry, the nation is playing a central role in the field of smart transportation, “where it has a relative advantage,” the report said. “The transition from the development stage to the implementation stages of smart transportation creates an additional significant opportunity for Israel, which can become a center” for pilot beta sites, the report said.

The report was written in cooperation with all government ministries, including the Alternative Fuels and Smart Transportation Administration at the Prime Minister’s Office, the Transportation Ministry, the Energy Ministry and the Planning Administration.

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