A lot of progress is being made with self-driving cars as Uber, Apple, Alphabet and other tech companies are making breakthroughs on their self-driving cars. With self-driving cars on the way, robo-taxis will soon become a trend in the society.
Autonomous driving provides a means of commute without stress at affordable prices. Waymo, which is under Google’s parent company Alphabet is no slacker in the self-driving car industry. Waymo is now offering driverless services in Phoenix, Arizona.
With the advent of self-driving cars, the real estate market for commercial office space may witness a transformation. The most desirable commercial office real estate areas are often surrounded by talented workforce, good transport networks and better amenities.
But with autonomous driving on the way, talents may no longer need to stay in close proximity to their workplace. People can now stay in faraway places and enjoy autonomous commute to work. They will prefer to stay away to rent and buy houses at lower prices.
With self-driving cars, 11% of the distance traveled by people might become autonomous by 2030. But if more progress is made, this percentage could even increase from 11% to over 27%.
Real estate has always been about location. Location has been emphasized so much in real estate for centuries. Self-driving cars will change this. According to David Eisenberg who is the senior vice-president for digital enablement and technology at CBRE, people will be willing to stay in faraway places and enjoy their commute to work. This is because they won’t have to drive themselves anymore. Also, the advanced self-driving cars will allow them to enjoy conveniences like fast 5G internet on their way to work. They can entertain themselves as they wish without having to focus on driving cars. It’s like having your own chauffeur that can drive you anywhere you want at your convenience.
David Eisenberg also said that autonomous services will increase over time and impact the real estate market in a big way. These cars will be massively welcomed by people, and there have even been talks of expanding some federal highways. It will be a case of technology disrupting the real estate market massively in a previously unforeseen manner.
An architectural firm called Gimler has said that architects are already taking the disruption of the commercial real estate market into consideration when creating new architectural plans for houses.
Architects now design parking structures that can be converted to office space. Also, pickup and drop-off zones are now larger. Some architects are also talking about reclaiming curb space for metered parking and redeveloping land in topnotch urban spots that are currently occupied by gas stations. These gas stations will become obsolete in the future as autonomous electric cars take over.
The Google self-driving project known as Waymo is taking giant strides towards commercializing autonomous transport. During Alphabet’s quarterly call on October 25, Ruth Porat who is the CEO of Alphabet’s said that Waymo started commercialization early in Chandler, Arizona. People can now pay for rides there.
But the CEO of Waymo, John Krafcik warned that it will take a lot of time for autonomous vehicles to be rolled out everywhere. But he remained
very optimistic when he was speaking with governors of the United States at a conference held in July.
In 2019, General Motors aims to launch an autonomous taxi service in San Francisco. Other car manufacturers like Toyota and Ford are also making similar plans to roll out autonomous taxi services in 2020 and latter years.
But the technology is still new, and federal laws governing the use of these cars are yet to be formulated. Also, these vehicles still need to be subjected to a comprehensive list of tests before they can be deemed safe for commercial use all over the United States.
But once the issues listed above are resolved, and commercial autonomous cars start to become mainstream, regions outside major cities in the United States will witness tremendous growth in the development of office space. Cities that had poorer commercial transport systems and low proximity to talented workforce will be better developed then.
Regions that may benefit from the advent of autonomous cars will include the Bay Area of California and the Inland Empire outside Los Angeles.
David Eisenberg said that those whose office space are premium ones because they were close to commercial centers and public transit hubs will lose their premium feel. Office premium will now shift to new locations. These locations would be preferred by workers when commercial autonomous cars become a thing.
In the future, robots will take hold of a car, and 5G internet connection will ensure fast communication and better entertainment. But, how long can a human bladder withstand a long trip? We’ll see about that.