Area Development
States and cities are increasingly looking for ways to attract the emerging autonomous vehicle (AV) industry — making it even more important for companies that will be early implementers or are providers to the AV sector to carefully consider their options for expansion or relocation. Interconnectedness and integration are the cornerstones of the AV industry and provide a clear lens through which to evaluate how a state approaches policymaking related to the industry. Below are three areas upon which to focus:

State Policy — A company considering a particular state for relocation should consider whether the state has embraced policies that allow for the broad utilization of autonomous technologies, or has taken a more cautious approach, or has put in place burdensome barriers, such as additional permit or registration requirements. Ask whether the municipalities within the state are investing in infrastructure that will help facilitate interconnectedness (such as broadband and 5G) or are instead seeking to increase taxes on related autonomous equipment.

{{RELATEDLINKS}} Regulatory Landscape — Currently state guidance ranges from no legislation or executive orders whatsoever, to limiting AV to testing, to allowing full AV use (for hire and private) on all public roadways. Such varying degrees of inviting regulatory landscapes could steer AV product designers and developers in the direction of states and localities where testing and implementation are widely accepted.

This driving force could, in turn, alter the traditional original equipment manufacturer (OEM) supply chains, and AV technology (software and hardware) will play an increasingly important role in the automotive supply chain even though it is not linked to current OEM supply hubs. Suppliers are wise to consider where clusters of yet-to-be located AV supply chains will settle, and early adopters should have their eyes peeled for locations where AV implementation is allowed, keeping in mind that technology development, for the most part, will follow the path (or state) of least resistance.

Infrastructure Planning — Another key indicator of whether a state is positioning itself as an attractive location for AV companies is long-term infrastructure planning and shovel-ready site development that incorporate the use of autonomous technology and interconnectedness. Do these sites promote interconnectedness and integration with vehicle-to-infrastructure (V2I) communications technology? Are intelligent technologies, such as signage that is uniform and visible to humans and machines, being incorporated into planned developments and capital investments? Are capital improvements being made with an eye toward autonomous technologies and interconnectedness?

Commercial Use: A Landscape View
The speed at which a state moves into the commercial use phase of autonomous vehicles largely depends on support from company executives and elected officials.

For example, in Mountain View, California, finance developer Intuit Inc. worked with Starship Technologies Inc., an autonomous delivery startup, to utilize autonomous robots for food delivery services within the company’s Silicon Valley campus. While autonomous delivery vehicles are aimed at delivering food in an efficient manner to employees across the campus, the vehicles are also capable of delivering interoffice mail, parts and equipment, and other needed office supplies, eliminating the cost, waiting time, and environmental impact of traditional small-item delivery drop-offs. California keeps good company with other states such as Virginia, Florida, Ohio, and Texas, where corridors have likewise landed on the map.

The speed at which a state moves into the commercial use phase of autonomous vehicles largely depends on support from company executives and elected officials. Earlier this year, the United States Postal Service partnered with automated trucking startup TuSimple to create a pilot program for hauling packages and letters between Phoenix and Dallas. This type of long-distance route is tough on human drivers and often requires a team, which increases the difficulty of recruiting and acquiring drivers. Using autonomous semis allows for significant cost-efficiencies in fuel and labor.

Of course, such programs require planning for the proper infrastructure, such as dock access that is compatible with autonomous trucks, and distribution centers that are equipped to handle these vehicles. Moreover, because automated trucks can travel round-the-clock and would not be subject to hours-of-service rules, warehouses and distribution centers can be located in more remote geographic locations, freeing up prime property for other opportunities.

Practical Applications for the Labor Force
Autonomous vehicles, when combined with artificial intelligence, will impact the daily life of a significant portion of the labor force. One of the largest beneficiaries of the AV disruption may be those with physical limitations. Several of the nation’s biggest cities view AVs as a possible solution to the “last-mile challenge” (getting people from their work or residence to the nearest transit stop). By using autonomous vehicles to supplement existing transit options and thus reducing the last-mile burden, those with physical limitations may be able to participate in the workforce in new ways. For employers, the new workforce mobility, combined with the shift of manual labor jobs to systems-manager type roles due to AI, will mean anticipating workers’ changing needs. In addition, the millennial population that recently flocked to downtown cores is now moving to the suburbs. This trend could create a suburb-targeted shift, as AVs take the hassle out of commuting, allowing families to move farther from downtown areas, thus creating new areas for development in the suburban environment.

Companies and cities will have the ability to rethink their urban footprint. AVs will reduce the parking spaces needed for office and mixed-use development, opening up millions of square feet in downtown areas. Repurposing parking decks can be expensive, but existing surface parking can provide an immediate source of developable land. The reduced construction costs of these new developments without parking decks may slow the rent appreciation that makes downtown areas cost-prohibitive to many companies.

Infrastructure Necessities
The proliferation of autonomous vehicles requires a substantial investment in infrastructure to streamline their implementation. Investment will be made in both traditional infrastructure — including smart lanes, AV-compatible signage, fiber networks, and cell towers (5G) — and nontraditional infrastructure such as upskilling of the population, safe public Wi-Fi, and on-road telematics and data.

The millennial population that recently flocked to downtown cores is now moving to the suburbs. This trend could create a suburb-targeted shift, as AVs take the hassle out of commuting, allowing families to move farther from downtown areas, thus creating new areas for development in the suburban environment. The implementation, regulation, and associated cost of the infrastructure may be borne by a mix of government entities (city, county, state, federal), end-users, or third-party providers. There is currently not a defined or suggested cost allocation, as the market investment reflects initiative rather than status quo. Examples of the new infrastructure projects include Las Vegas digitally mapping its downtown corridor for use by AVs; San Diego installing more than 3,200 smart streetlights; and numerous high school and community colleges incorporating auto-tech and programming courses into their programs to satisfy positions that are already in high demand.

Moving forward, the costs of infrastructure will likely be a collaborative initiative, but experience and pending legislation tell us that some communities are looking for a tax windfall from the new disruptors, while others are positioning their community to be at the forefront of development.

Regulation will play a material role where technology is implemented and thus will impact where the subsequent projects, data centers, office/programming hubs, connected distribution, AV depots, etc. are located. Burdens that can seem mundane — such as the placement, height, and appearance of cell towers or 5G nodes, or excess fees for placement of fiber cables — can have a substantial effect against implementation. Some obstacles are more apparent, like decaying infrastructure, roads in need of repair, specialty AI/AV taxes, and communities attempting to prohibit via regulating the use of AI/AVs instead of retraining the population.

The cost and regulation of AV infrastructure and implementation makes it unlikely that the technology will be implemented simultaneously across the U.S. This will allow some communities to pull ahead in the process. These areas have the ability to create new tech clusters, thus anchoring jobs to those areas for decades to come. Additionally, the next generation workforce is likely to view the new technology as an amenity when choosing a city in which to live, therefore providing a steady influx of an educated workforce.

In Sum
Early implementers and providers of the autonomous vehicle sector have endless factors to consider not only when mapping out their next technological advancement, but also when planning for future growth and expansion. Understanding how a state’s policymakers approach interconnectedness and integration is critical to an AV company’s success in planning for its next move, business collaboration, or road test.