In the past few years, experimental autonomous vehicles have taken to America’s roads and streets. Much has been made about whether autonomous vehicles will either be a panacea or a scourge. (Read Chuck Marohn's recent article on the topic for the latter perspective.) The truth is, autonomous vehicles will simply be a transportation tool. The way we choose to use that tool could define our relationship — good or bad — to the urban environment for the next century or more.

People concerned with developing resilient communities should see autonomous vehicles as an opportunity to shift our culture away from the unrestrained use of private cars to one based on more economically productive transportation choices like public transit. Pursuant to this goal, autonomous vehicles will have great potential to reduce private car use by enabling transit agencies to improve and expand their services. 

The primary limiting cost factor for any transit service is driver compensation, not capital or maintenance costs associated with the bus itself. Because autonomous vehicles do not require a driver, transit systems that switch from piloted vehicles to autonomous vehicles can actually support many more buses, vans, trolleys, etc. with the same budgets they currently employ.

The next limiting factor is fuel costs, and the associated collateral costs of fossil fuel emissions. Fortunately, these costs could also soon be addressed with emerging electric battery technology. Electric battery drivetrains for motor vehicles could be cheaper than petrol drivetrains by the time autonomous vehicle technology is in robust use. Therefore, all autonomous vehicles would be better referred to as autonomous-electric vehicles (AEVs). 

Let’s take a deep dive into a case study of AEVs’ effects on an Austin transit system to understand how they could save all transit agencies substantial amounts of money.

Autonomation Cost Reductions

A research paper authored by Neil Quarles and Kara M. Kockelman of the University of Texas at Austin sheds light on the cost savings AEVs could provide Austin’s Capital Metro Transportation Authority (known locally as and henceforth shortened to: “CapMetro”). This article will use their findings as a springboard for discussion on the future of public bus transportation in an AEV future.

(Note: In their research, Quarles and Kockelman estimate that CapMetro will replace about 36 buses per year out of their fleet of 438, and their long-term findings are based on this. For the simplicity of this article, I presume that CMTA has chosen to replace all of its standard buses with AEV buses in the year 2028.)

According to Quarles and Kockelman, the contracted companies who manage CapMetro’s bus drivers consume about 45% percent of CapMetro’s operating budget. Driver compensation, management, and overhead costs CapMetro an average of $272K per bus per year, and $3.26M per bus over a 12 year “lifetime” for each bus (K = thousand and M = million). Automated buses could eliminate these driver costs completely and save CapMetro a maximum of $3.26M per bus lifetime. However, we must also consider the costs of adding automated technology to existing bus platforms. Using conservative estimates of $80K in capital costs for adding automated technology to a bus from the factory, CapMetro’s potential yearly savings reduce to $265K per bus per year, and to $3.18M per bus lifetime.

438 buses x $265K (savings per bus) = $116 million in savings each year

CapMetro has 438 buses, so $265K x 438 equates to $116M in savings for CapMetro per year for its bus fleet, or about $1.39B (billion) in savings for the 12-year lifetime of the fleet. Keep in mind, these are just the savings from making the buses autonomous. Thus far, we’re assuming they still run on diesel fuel. Now let’s see what happens when we bring electrification into the equation.

Electrification Cost Reductions

The determining factor for the cost of any electric vehicle is always the price of its batteries. According to Quarles and Kockelman, electric batteries aren’t quite cheap enough yet to consider buying an electric bus over a traditional diesel bus. In the study, the authors compare the lifetime cost of buying an $800K electric bus + $13.6K in electric fuel a year for 12 years, versus buying a $300K diesel bus + $38.6K in diesel fuel a year for 12 years. The lifetime cost of buying an electric bus + 12 years of fuel is about $200K dollars more in lifetime cost than the $300K diesel bus alternative. (Bus lifetime cost = cost to purchase the bus + 12 years of fuel for the bus.)

At first glance, those numbers suggest that electric vehicle won’t be a more affordable alternative to diesel-powered buses. However, it’s important to remember that the prices for electric batteries are consistently falling.

Chart 1: Estimates of Costs of Lithium-ion Batteries for use in Electric Vehicles (Source: Bjor Nykvist and Mans Nisson, 2015). Click to view larger.

Chart 2: Expected Total Lifecycle Cost vs. Purchase Year for Diesel and Electric Powertrains (Source: Quarles and Kockelman, 2016; modified by Alexander Dukes) Click to view larger.

Chart 1 shows a variety of battery costs over time and estimated “log fit” cost curves. Estimated cost curves exist for all of the collected data (the black line), expert estimates (the dashed blue line), and for Tesla and Nissan (the dashed green line). Quarles and Kockelman take this data from Chart 1 (which estimates a decline in battery prices of 8 to 14 percent year over year) and insert it into their electric bus model. Chart 2 compares electric buses’ estimated cost decline to the steady cost of diesel buses.

As shown, if we presume a conservative 8 percent cost reduction for batteries year over year, electric buses’ lifecycle costs will be at parity with diesel by about 2021. Autonomous vehicle technology is not expected to be ready for full service until at least the mid to late 2020’s. Thus, if CapMetro purchases a fleet of AEV buses after 2021 it will immediately realize all the savings from an autonomous fleet while simultaneously reducing costs with electric drivetrains.

As of the writing of this article (March 2018) the electric bus’s lifetime cost should be at most $125K more expensive than the $300K standard diesel bus’s lifetime cost (see the hollow dot on Chart 2). A decade later in 2028, an electric bus’s lifetime cost should be $150K less expensive than a $300K diesel bus’s lifetime cost (see the full dot on Chart 2). Applying this $150K in lifetime savings across the entire CapMetro fleet of 438 buses equates to $65.7M in savings over 12 years. We’ll use 2028 as a hypothetical introduction year for both autonomous and electric drivetrain technology in CapMetro’s bus fleet.

Now let’s combine the savings from autonomation and electrification to arrive at a rough savings estimate for CapMetro and make some informed guesses as to how CapMetro could best put the savings to use.

Using AEV Bus Savings to Improve Service

Adding $65.7M in fleet lifetime savings from electrification to $1.39B in fleet lifetime savings from automation equates to $1.46B in total 12-year lifetime savings from an AEV bus fleet for CapMetro. 

$65.7 million (electrification savings) + $1.39 billion (automation savings) = $1.46 billion in savings over 12 years

$1.46 billion / $600,000 (lifetime cost per bus) = 2,400 new buses

In 2028, that $1.46B could afford CapMetro many options to improve service. In fact, it would be revolutionary. If CapMetro took all of the $1.46B they save from automation and electrification of their buses, they could conceivably run a fleet of 2.4 thousand full size buses in their service area. I arrive at this number by dividing $1.46B by the estimated $600K lifetime cost of a 2028 electric bus, yielding about 2.4K buses. As CapMetro currently runs 438 buses, running 2.4K buses would multiply their fleet by 5.5 times.

(Note: Transitioning from 438 buses to 2.4K buses will increase maintenance costs for CapMetro, which are not included in the lifetime cost for each bus. Additional funds would need to be allocated to maintain two thousand new buses. However, this is tempered by the fact that electric vehicles are mechanically simpler than diesel buses and thus far easier to maintain. It is also likely that electric buses will reduce capital costs via their mechanical simplicity by experiencing lifetimes greater than the 12 years of their diesel counterparts.)

CapMetro buses currently have an average of about 98K boardings per weekday. Assuming each of the 438 buses in CapMetro’s fleet each has a capacity of about 50 people per bus, the total fleet capacity at any given time is around 22K. Thus, the number of boardings is about 4.45 times the fleet’s total capacity at any given time. (Of course, the buses are loading and unloading passengers throughout the day, which makes it possible for boardings to exceed capacity.)

2,400 buses x 50 people per bus = 120,000 users at any given time.

4.45 (boardings multiplier) x 120,000 = 534,000 boardings per day

The 4.45 number can be used as a multiplier to get a rough idea of the number of boardings that would occur in the estimated date of 2028, where CapMetro uses 2.4 thousand AEV buses to improve service. Multiplying 2.4K buses by 50 people per bus yields a 2028 fleet capacity of 120K people at any given time. Using the 4.45 multiplier on the 120K fleet capacity yields an average of 534K boardings per day if CapMetro maintains its current boarding rate of 4.45.

Shifting Car Trips to AEV Transit

The vast majority of the 534K new boardings on CapMetro’s AEV buses will replace individual car trips. When someone opts to board a bus instead of a car, it removes a would-be car trip from the road. To get an idea of how dramatic an improvement 534K boardings per day is compared to the current 98K boardings per day, take a look at the bus-vs-cycling-vs-car image below.

In the leftmost image, one bus carries 44 people in a space about three car lengths. In rightmost image, 44 cars carry one person each. The 44 cars take up the length of the block. Imagine each of those 44 cars dynamically moving through a downtown area. Now imagine how much more enjoyable Austin’s urban environments would be if there were two thousand more CapMetro buses replacing at least 534 thousand car trips per day.

In a future with automated-electric vehicles, removing those 534K car trips from the road each day will become critical, and mass transit overall will need to be seen as an essential public good. America’s excessive reliance on car trips will be aggravated further when ride hailing services like Uber and Lyft leverage automation to slash ride prices and become more accessible transportation options. Studies in large cities like New York and Boston have reported that ride hailing services actually make congestion worse because “empty” cars need to rove around in search of passengers. A vast, automated expansion of mass transit services could help balance out those ride hailing services before they fill the streets with cars.

A number of strategies can be employed by municipalities to combat excessive use of low capacity AEV-cars and promote the use of AEV public transit instead:

First, transit agencies like CapMetro can use their thousands of additional AEV buses to expand transit service out to car-dependent suburban areas while maintaining headways of thirty minutes or less. Two to four buses could be assigned to serve far-flung subdivisions with routes thirty minutes to an hour long. With traditional driven buses, this would be a waste of transit resources that could be put to better use in denser portions of a metro region. Having thousands of additional buses available for use changes this calculation.

Second, metro regions can tax low capacity AEV car use to pay for the sustenance and further expansion of transit systems. Because travel via ride-hailed AEV cars will be about 18 cents cheaper per mile than a privately-owned car today, plenty of headroom exists to tax AEV cars one or two cents per mile traveled in metro regions. The penny tax could even allow agencies to offer transit services free to users and greatly increase transit’s appeal as an alternative to travel by car. This is especially critical for suburbanites, who may be nonplussed about giving up car use.


Third, a variety of automated-electric vehicle sizes can be used within a transit system’s fleet. The calculations in this article are based on a “full-sized” bus. Automated vehicles do not require 20+ riders at a time to break even on driver compensation; therefore, agencies can easily “right size” transit vehicles to fit demand in an area.

Right sizing has profound implications for both headways and the extent of serviceable areas. If CapMetro decided to purchase buses that were half the lifetime cost (and presumably half the capacity) of the full-size AEV buses used in these calculations, CapMetro could conceivably run a fleet of 4.8 thousand buses on their current budget. 

Finally, transit agencies could use a registration system to adapt routes to feedback from users. Currently, transit agencies basically guess where consumers want to go. This is because traditional, driven buses are so expensive to run that groups of customers have to gather at a central location to meet the bus. In an AEV future, smaller “right sized” buses and vans could alter their routes to dynamically rendezvous with customers that are within a reasonable distance of the route. Already, many transit agencies have mobile apps that show the location of buses. It wouldn’t take too much work to allow these apps to ping a user’s location and bring a small bus or van to a location convenient to the customer.


Automated vehicles are coming whether we like it or not. When applied to transit they are a less expensive and more efficient means of transportation than our precious privately-owned cars. AEV transit has the potential to function as an essential public good that reduces automotive congestion in streets and expands metropolitan accessibility. Hopefully, crunching the numbers in this article has provided some insight into how we can make AEVs work for people, rather than the other way around.

Though the potential exists for public transit to vastly improve in a future with AEVs, there is still much uncertainty as to what lies over the autonomous horizon. Some experimentation and refinement will be necessary before we get AEVs right. If our society employs them according to basic Strong Towns principles I think we’ll find an appropriate balance that improves life in our towns and cities.

(Top photo source: