Quantifying the Potential Impact of Autonomous Vehicle Adoption on Government Finances

Abstract

There is some understanding that autonomous vehicles will disrupt public sector policies and the existing transportation industry, but this disruption is often loosely defined and tends to ignore how it would affect governments financially. The primary objective of this paper is to quantify the short-term impact of introducing autonomous vehicles on government finances. The analysis focuses on eight Canadian governments, encompassing four government tiers. Public discourse and academic literature are used to generate nine predicted changes (forecast variables) in future adoption scenarios. Using the predicted rate of autonomous vehicle adoption, the remaining variables are converted into financial changes by combining them with government financial records, infrastructure inventory datasets, and project cost estimates. The results suggest that, while revenue impacts are fairly minimal, and mostly impact Canadian provinces, the cost of implementing the expected vehicle-to-infrastructure (V2I) communication upgrades could be expensive for governments with smaller populations, especially municipalities. The revenue analysis indicates the biggest shift is likely to be a loss in gas tax, which affects federal and provincial revenues, yet this share is relatively small compared with the size of these governments’ budgets. The expense analysis suggests that, although provinces have extensive road networks, the cost of upgrading all of their highways may not be unreasonable compared with their yearly revenue intake. On the other hand, municipalities would require substantial new funds to be able to make the same upgrades.

Infrastructure‐related challenges in implementing connected and automated vehicles on urban roads: Insights from experts and stakeholders

“…However, there has been limited research in the available literature focusing on the financing requirements for infrastructure-related investments, maintenance, and operation expenses [60,64]. Government revenue, budget and financial institutions should conduct a thorough review of how revenue streams may change as a result of automation and supporting legislation [1,65]. Krechmer et al [66] have discussed a set of individual scenarios with corresponding upgrade cost estimates that might be paid for by public or private organisations in the USA.…”

Governmental Expenditure Implications of Autonomous Vehicles

“…Oliver, Potocnik, and Calvard (2018) argue that although initially it is likely that AVs will operate in separate, controlled environments, eventually, public standardized and smart infrastructure may be required. Terry and Bachmann (2019), using Canadian data, suggest that implementing infrastructure changes to permit vehicle communication with the road infrastructure would be especially expensive for governments with smaller populations such as municipalities.…”

How Will Autonomous Vehicles Change Local Government Budgeting and Finance? Case Studies of On-Street Parking, Curb Management, and Solid Waste Collection

“…Review of the TRD TRID database makes it clear that there is a proliferation of research around the technological aspects of AVs, but research on their secondary effects is only starting to be understood (Glancy 2015;Mitteregger et al 2019;Terry and Bachmann 2019). This report specifically seeks to study those secondary effects, not the innovations themselves but how innovations impact the municipal budget-parking revenue in particular.…”