Shape shifting cities: Autonomous vehicles drive spatial planning for urban livability

AVs drive spatial planning for urban livability

Self-driving cars will exert a major influence on where citizens choose to live, work and travel | 🕒 4-min read.

Autonomous vehicles road

For centuries, the dominant mode of transport at the time has shaped our cities, from horse carts to subways. With autonomous vehicles (AVs) on the verge of becoming the dominant mode in the near future, self-driving cars will exert a major influence on where citizens choose to live, work and travel.

With major cities currently grappling with urban sprawl and congestion, the use of AV ride sourcing services could catalyze inner urban regeneration. However, policy makers must understand and act on the implications of the autonomous era. We have the opportunity to drive proactive spatial planning that improves the livability, sustainability and productivity of cities.

Transport innovation shapes cities

The dense inner areas of major cities have long been the historical engine of social, cultural and economic development. This has created a preference among urban dwellers to live within a short travel time of the urban core.

As a result, the spatial development of our cities is determined by the transport options available to citizens. For example, in the 1850s, walking, horses and carriages were the primary transport methods. This led most urban development to huddle within a short distance from the central business district.

Following the industrial revolution, the introduction of trams and trains enabled people to live and commute from inner suburbs. Then, the post-World War II era heralded in automobiles as the dominant mode, and new highways expanded cities outwards into low-density suburbs on the urban fringe.

In coming years, autonomous electric vehicles will trigger the next major shift in urban development patterns. Research by KPMG in Australia suggests how individuals may take advantage of the new technology and the consequences for city development.

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Autonomous vehicles make travel easier, cheaper

The development of cities is likely to shift as AVs become ubiquitous. Recent studies highlight how the economics of driving will change, along with commuter behaviors. KPMG in Australia examined the predicted impacts of AVs on traffic and land use in Melbourne, Australia, applying its proprietary Land Use and Transport Interaction (LUTI) model. Among the themes revealed by the research:

  • Urban sprawl along freeway corridors: AVs will make long distance travel easier and cheaper. Since drivers will be freed from the demands of concentrating on the road for long periods, they will accept longer travel times. Also, since AVs will communicate among each other to maximize vehicle flow, the capacity and speed of freeways will increase markedly1. As a result, urban development along long distance freeway corridors will become more attractive.
  • Inner city densification: While ride sourcing services, such as Uber and taxis, or car sharing services, like Car2Go and Zipcar, are popular, today most people continue to rely on their own private cars for most daily travel. This may change as AVs become more convenient and economical. For instance, KPMG in Australia’s analysis suggests that an autonomous ride sourcing service would cost between AUD$8-10 per half hour of travel compared to $34 today. For a typical Melbourne resident to replace all private car travel with AV ride sourcing services, annual vehicle travel cost would reduce from $11,000 to $6,000-7,0002. This is due to avoiding the high fixed costs of car ownership.

With such services becoming an appealing option, many urban dwellers might decide to forgo car ownership and choose to live in the inner suburbs to minimize autonomous ride sourcing fares. These residents would live at higher densities and rely more on public transport, walking and cycling.

How should city policy makers respond?

This analysis reveals how AVs will create competing pressures on cities, with intensifying sprawl along freeway corridors and urban consolidation pressures in inner and middle suburbs. Government planners must respond by putting relevant policy measures in place, starting now. KPMG’s study recommends several actions for policy makers:

  • Review existing planning schemes and controls to ensure they support urban consolidation that is appropriate from a societal perspective. This includes ensuring a sufficient supply of affordable housing is provided.
  • Assess new development plans to ensure they are consistent with the implications of the autonomous era.
  • Invest in decision making tools to understand the impact of autonomous and electric vehicles on land use. This can be achieved with land use transport interaction (LUTI) models.
  • Implement road pricing reform as a matter of priority to manage demand for car travel, and as a policy lever to encourage ride sharing.
  • Encourage an eventual transition from private ownership to ride sourcing and car sharing for daily travel through enabling policy and regulatory settings and facilitate business models that provide these services. Governments must also ensure high quality alternatives to car travel are available, including public transport, walking and cycling.

In light of the expected impact on city dwellers’ movements and settlement decisions, AVs could reap massive change on urban areas, as did the first passenger trains and automobiles. Governments must begin proactive policy development and spatial planning now. This will help ensure that the next dominant mode of transport makes our cities more livable and productive.


1Eno Centre for Transportation, 2013. Preparing a Nation for Autonomous Vehicles - opportunities, barriers and policy recommendations, Washington D.C.: Eno Centre for Transportation.

2Thakur, P., Kinghorn, R. & Grace, R., 2016. Urban form and function in the autonomous era, Melbourne: Australasian Transport Research Forum 2016 Proceedings.

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