Implications of Autonomous Taxis on Transportation Planning

I.

Introduction

The purpose of this Research Essay is to explore the implications of autonomous taxis on
Transportation Planning specifically geared towards the Greater Toronto Area (GTA). To begin,
one must first have a basic understanding of Travel Demand Forecasting and the Four-Step
Planning Process. These basic concepts can help analyze the current system that has been applied
for taxis in the GTA, and a brief description of said concepts can be found below.
The Four-Step Planning Process is broken up into Trip Generation, Trip Distribution,
Modal Choice and Trip Assignment. Trip generation is the total number of trips generated and/or
received in a specified zone. Trip Distribution finds the number of trips that arrive and depart
between the specified zones. The Modal choice or split, finds the number of trips available
between a production/attraction pair and which method of transportation is available (i.e. taxi,
car, bus, train etc.). The Traffic Assignment is the final step where all trips and zones are
analyzed and the optimal selection/method of transportation is assigned and/or taken by a user.
With respect to the taxicab industry, the City of Toronto needs to ensure they are able to
determine the appropriate number of taxicabs required for respective areas within the city, so
they can supply sufficient vehicles based on the demand. By using current data of the overall
taxicab industry, it can then be compared to the effects of introducing autonomous driving cabs.
Now that a brief description has been reviewed for each major step, one can begin to examine
and understand how the current taxicab system in Toronto truly works.
II.

Questions
1) What is the current system like?

The City of Toronto is given the authority to regulate the taxicab industry through the
City of Toronto Act (COTA).1 Even though the cab industry is not funded by the government,
the City of Toronto understands it plays an important role in its overall Transportation Network.1
It serves as a compliment to many trips (i.e. subway, train, airport etc), and is also a main
method of travel for when Torontonians need to get to work, school, the airport and for other
leisurely purposes.
The Taxi Research Partners have released a report that includes a number of items and
information regarding the number of licenses, surveys taken, stakeholder reviews, and
calculations for demand and trip origins.6 With respect to this report, calculating demand and trip
origins is of most interest, as it is a direct step from the Transportation Planning Process.
Through public surveys and electronic records, illustrative charts were made using three metrics
which are: trip origin, spatial location and time.6 Illustrative data (i.e. charts) were made for
residential, workplace, entertainment, airport and a number of other trip origins, which allows
the City of Toronto to calculate the supply of taxicabs necessary to meet the demand at
reasonable rates.6 If there are too many taxicabs available, drivers would see a significant
decrease in income; and if there are too little taxicabs available, this method of transportation
would be viewed as unreliable and other methods would be searched and/or taken which also
results in revenue loss. Other transportation methods such as the TTC, walking, and cars are also
taken into consideration.

Figure 1. Trip Origins

Figure 3. Trip Production Summer

Figure 2. Trip Production

Figure 4. Trip Production Winter

**Note: all illustrative data retrieved from source 6 (City of Toronto, 2014)
In Toronto, the current fare structure is composed of three segments which includes The
drop, Distance charges and Waiting Charges. The drop is a base fare charge of $4.25 that is
included at the start of every trip, Distance charges are set at $0.25 for every .143km travelled
and Waiting Charges are set at $0.25 for each 29 seconds that the taxicab is not moving.1
Taxicab rates are reviewed on an annual basis and the rates are set based on a number of factors
including fuel costs, leasing fees, drivers time and a number of operating costs spent on
maintaining the vehicle.1
Additionally, the Licensing Structure for taxi drivers brings extra costs into play. There
are Ambassador and Standard Licenses, Transferability restrictions on licenses, Designated
agents, and those who lease licenses and/or vehicles.1 Going into further details about the
licensing is unnecessary as the main point to be made is that each license or title has varying
prices with respective perks. In September of 2012, the average Taxi licenses were sold for up to
$360 000, while in 2014, the average price dropped to a total of $118 235.3
2) Changes in the future?
With the recent increase and advancement in technology, it has brought science fiction
closer to home and feasible to implement in the real world. The majority of the population in
North America use smartphones and newer car models now come equipped with a standard built
in GPS. It is only a matter of time before further advancements including autonomous driving,

becomes a standard option among new vehicle models. Tesla Motors claims to have recently
released a self-driving vehicle. For every Tesla Model S manufactured after 2014, a $3000
software autopilot update was made available for those who were interested in this new
feature.4 There have been many videos posted on social media outlets which display the
vehicles successful ability to drive on roads without a person manually steering it. The car
drives using a combination of cameras, radar, ultrasonic sensors and previously acquired data
that has been uploaded from other Tesla vehicles.4
With the implementation of such technology already made available to the general
public, one can only wonder what additional purposes/uses can such technology be used for.
However, since the purpose of this paper is to explore what effects autonomous vehicles may
have in the taxicab industry, the impacts it may have on the existing industry will be the main
focus.
III.

Issues, Potential Benefits and Costs

Prior to making any research, it is evident that 2 major costs would be eliminated with the
implementation of autonomous vehicles in the taxicab industry. The cost of supplying the driver
and ensuring he/she profits from any sort of minimum wage would be removed. Inserted below
is a table from the Autonomous Predictions Vehicle Implementations article, which best
describes the benefits and costs of such a case.5
Table 1. Potential Benefits and Costs of Autonomous Vehicles

Note: Table retrieved from source 5 (Litman, 2015)

What is most notable in the above table is the potential problems that would result from
implementing fully autonomous taxicabs. The security and privacy concerns along with the loss
of jobs is very important to account for as this involves peoples livelihood and wellbeing that is
involved. It needs to be ensured that implementing new technologies in real world scenarios not
only benefits users, but it must also benefit society as a whole which can be achieved through
keeping users safe and producing enough jobs to account for the ones it made obsolete.
IV.

Likely Developments

It has already been announced that multiple dealers have invested in different types of
autonomous driving technologies. GM invested 500 million USD in Lyft, purchased selfdriving technology startup Cruise Automation for more than 1 billion USD In may BMW
announced that they would have a self-driving car on the market within 5 years. Next came Uber,
which acquired autonomous truck startup Otto for 680 Million USD and is now beginning field
trials of fully self-driving taxis in Pittsburgh Ford which plans to provide mobility services
with fully autonomous self-driving Fords by 2021.2 Given these developments, it can be
estimated that within the next decade, fully autonomous vehicles will be made available for use
to the general public.
Perhaps the only reasonable question to think about is whether the upcoming fleet of
autonomous vehicles will be mainly used for personal or commercial use. It may be safe to
assume that autonomous vehicles will be more applicable to commercial use for the following
reasons. Not everyone in the GTA and North America can afford a brand new vehicle and the
likely extra cost of having a perk such as autonomous driving may drive people away. Secondly,
the upcoming generation in the GTA may feel more comfortable using ride shares and a cheaper
taxi that will result from autonomous taxis as cars are too expensive to own/maintain.
V.

Deployment Patterns

As of 2013, there are 4 levels of autonomous vehicles that are explained in the table
below.6
Table 2. Levels of Autonomous Vehicles

Note: Table retrieved from source 5 (Litman, 2015)

Level 1 of Autonomous vehicles can actually already be seen in the industry as the Ford
Escape, Kia Sorento, GMC Sierra and many other vehicles offer some sort of driver and/or
parking assist options.7 As previously discussed, the Tesla Model S has the ability to operate on
the road without any sort of manual steering which would fall under Level 2 and 3. As further
advances in technology continue to be applied to vehicles, it is a reasonable assumption to expect
cars will begin to implement levels 2 and 3 across the majority of their models. Therefore, the 4th
level autonomous vehicles can be expected to be seen across luxury vehicles (i.e. Tesla Model S)
within the next couple of decades as common domestic car manufactures will focus on equipping
their vehicles with enough technology to satisfy Levels 2 and 3 during the same time.
VI.

Effect on Transportation Planning Decisions

The purpose of having a fully autonomous taxicab service is to eliminate unnecessary

surcharges applied to users in order to account for driver profits and vehicle expenses. This can
only be achieved when enough information has been collected and analyzed to successfully
apply to a full fleet of autonomous vehicles. A timeline can be seen below of what this process
may look like.5
Table 3. Timeline of Autonomous Vehicle impact to Transportation Planning

Note: Table retrieved from source 5 (Litman, 2015)

VII.

Impacts
1) Mobility
i. As discussed in Table.1, it is predicted that mobility around the GTA
would be improved as the need to chauffeur non drivers would be reduced,
and a potential increase in road capacity due to platooning effects may be
experienced. More mobility results in fast pace service, reliable service in
peak periods and improved customer satisfaction.
2) Traffic congestion
i. There is no reason for concern with respect to rush hour conditions as
there would still be a supply and demand model applied to the autonomous
taxicab industry. The method would be applied to this new wave of taxi
service so that it does not further impact traffic congestion, unless it is to
significantly reduce it.

VIII.

3) Public Transit Demand

i. It would relieve some of the pressure and high density situations
experienced on public transit as there are plans to include ride sharing
options. The City of Toronto considers all methods of transportation when
modelling supply and demand for population zones, and would ensure taxi
cab services are more sought after as a great compliment to their trip.
However, it will also be structured so that it is thought of as a reasonable
substitute depending on the users needs (i.e. public transit breaks down,
after hours service, need to arrive faster etc.).
4) Parking Demand
i. It is hoped that less vehicles will be taken to work as more affordable taxi
rates would result from autonomous taxi cabs. Therefore, a greater amount
of parking spaces will be available to the public for families and visitors to
the cities that drive down for leisurely purposes.
5) Traffic Safety
i. Its still uncertain what type of insurance methods will be applied if
accidents happen. But for autonomous vehicles available today,
manufacturers such as Volvo and Tesla stated that they would assume full
responsibility of crashes if their vehicles decided to crash in an emergency
situation.4
6) Energy Conservation/Pollution
i. As mentioned above, ride sharing options will be explored which helps
enforce the idea of green commutes. With a larger network of vehicles and
trust from the population, autonomous taxis may eventually be seen as
safe as taking the TTC to work with other strangers along the way. Less
cars on the road with single drivers results in less emissions and a
healthier Toronto.
Conclusion

The implementation of technology to provide fully autonomous vehicles is an inevitable

process in todays vehicle industry. It is no longer a question of if the process will happen but a
matter of when. Due to this outcome, it is important to plan ahead and to think of both the
positives and negatives new technologies have on society. With this new technology being
released it has already been noted that big companies such as Google and Uber have invested
millions of dollars to offer the first fully autonomous taxicab service industry. One needs to think
about the positives such as mobility, speed, efficiency and affordability such a service would
bring to the industry as whole. But one must also think about the potential job losses, security
and safety concerns that would result from having cars drive themselves out on the streets. It is
important to consider all options in what may appear to be an inevitable outcome, but only by
doing this, can the GTA be better prepared to solve major problems that would result from
implementing a fully autonomous taxicab service.

IX.

References

1. City of Toronto. (2012). Torontos Taxi Cab Industry. Retrieved from:

http://www.toronto.ca/legdocs/mmis/2012/ls/bgrd/backgroundfile-50094.pdf
2. Dr. Hars (2016). The Race for Fully Self-Driving Cars Has Reached a Pivotal Point.
Retrieved from: http://www.driverless-future.com/?cat=26
3. Cheney, Peter. (2015, July 16). How Uber is ending the dirty dealings behind Toronto's cab
business. Retrieved from: http://www.theglobeandmail.com/globe-drive/adventure/redline/how-uber-is-ending-the-dirty-dealings-behind-torontos-cabbusiness/article25515301/
4. Saltzman, Aaron. (2015, Oct 28). Ready or not, Tesla Autopilot means self-driving cars are
already on Canadian roads. Retrieved from: http://www.cbc.ca/news/business/teslaautopilot-test-drive-1.3291201
5. Litman, Todd. (2015, Dec 10) Autonomous Vehicle Implementation Predictions: Implications
for Transport Planning. Retrieved from: http://slidepapers.in/wpcontent/uploads/2016/03/Autonomous-Predictions-Vehicle-Implementations.pdf
6. City of Toronto (2014) Determining the Appropriate Number of Taxicabs and its Impacts for
the City of Toronto. Retrieved from:
http://www.toronto.ca/legdocs/mmis/2013/ls/bgrd/backgroundfile-59690.pdf
7. Newcomb, Doug. (2016, Aug 30). The Best Driver-Assist Cars of 2016. Retrieved from:
http://www.pcmag.com/article2/0,2817,2485278,00.asp