Spatial and welfare effects of automated driving: Will cities grow, decline or both?

This paper shows that automated driving can lead both, to growth and decline of cities. We simulate spatial effects of automated driving for the Netherlands using LUCA, the Dutch spatial general equilibrium model. Two components of automation are accounted for: (i) more productive time use during car trips; (ii) fast and comfortable door-to-door automated public transit. We find that the car component results in population flight from cities, while the public transit component leads to population clustering in urban areas. A combination of the two may result in the population concentrating in the largest, most attractive cities, at the expense of smaller cities and non-urban regions. The simulations suggest that welfare benefits of automation are considerable, with up to 10% coming from population relocation and changes in land use. Our results are particularly relevant for countries where public transit claims a considerable share of urban mobility. Neglecting the impact of vehicle automation on public transit could result in biased policy recommendations.