Local Government

Self-Driving Cars Could Destroy Fine-Based City Government. What's the Downside?

Increasing automation limits the ability of authorities to profit off human error.


But who will pay the fines to pay the people who are supposed to build the roads, but don't?

One of the propelling concepts behind self-driving cars isn't just innovation for the sake of innovation, leading us to our sci-fi Jetsons future. If successfully implemented, it will make ground travel safer, particularly in higher population areas, increase transportation efficiency and ultimately human productivity.

But there's one little problem, noted by the government analysts of the Brooking Institution and subsequently highlighted by Wired: Local governments have become increasingly dependent on human screw-ups as a way to raise money. Speeding tickets. DUI citations. Parking violations. Those are all big money-makers for municipalities that could very well go away under a regime of self-driving cars. That's billions of dollars of revenue across the country. And that's not all the money governments could lose:

On top of that, if the theory that self-driving cars will lead people to own fewer cars holds up, revenue from registration fees will drop as well.

Again, great news for people who don't like, or can't afford, paying fines and fees. But that money finances things like transportation infrastructure and maintenance, public schools, judicial salaries, domestic violence advocacy, conservation, and many other public services, the report notes.

What an interesting list of government-financed uses they've chosen. Notice they left off "Poorly made third-party database software that will stop working properly in less than three years and that was purchased from somebody belonging to the same frat as the assistant city manager," "police abuse settlements," and "blatant pension spiking." And, as is so often the case, the argument acts as though just because the government collects revenue for these purposes that the government is actually spending the revenue on these tasks. If you think the $161 million in parking tickets Los Angeles collected last year is actually improving the roads here, I invite you to contribute to my GoFundMe page to purchase new shock absorbers for my car. And hiking gear for some of our sidewalks.

The report also notes that on the plus side, car crashes do have public costs, and those costs will go down as well. Responses to traffic accidents cost taxpayers billions each year. But this benefit will likely become a problem of its own because it means there will be lest demand or need for a significant number of public safety personnel, and just imagine how difficult it's going to be to eliminate those positions.

If vehicles become more efficient fuel-wise and there is much less revenue from fines and human error, it may naturally end up having to push governments to pay for infrastructure by taxing travelers based on use of roads, not through punitive systems or fuel taxes. The big fear would be government using a mileage tax as a supplement to other revenue generators rather than a replacement, trying to milk even more money out of citizens.

There's much more to the Brookings Institution report besides self-driving cars. The title of the report is "Local government 2035: Strategic trends and implications of new technologies." It talks about drone use and predicts that, if Amazon's experimentation for short-distance drone deliveries takes off, it could be the final nail in the coffin for the United States Postal Service (certainly something worth celebrating). It talks about fears of job losses due to the rise of computerization and automation. The report does not approach the subject with fear or with the idea that the government could or should stop such transitions, but rather with the abstract concept that local governments need to plan ahead, though this is not the kind of planning ahead governments are good at (see above: expensive, broken database programs purchased based on connections—and also Solyndra).

The report notes the growth of Bitcoin and the massive sharing economy, actually urging cities not to fear it and find places where government and private goals align (jobs—even short-term, "gig"-oriented ones). But then there is that one pesky issue, the reason why services offered through the "sharing economy" tend to be cheaper than what's being offered by the stagnant wage culture. It's the government, of course:

"A reason for local governments' unfavorable reaction to the sharing economy is the inability to tax most of these technologies. This is important because there's a lot of money to be made. The U.S. Travel Association reported that business and leisure travelers spent $887.9 billion in 2013, generating $134 billion in taxes."

The government's inability to tax such services means that participants on all sides of the sharing economy get to keep more of their money, which makes it all more accessible to the poor.

Then there's a section on "income inequality" where things get really weird, considering how much of the report is about how government gets revenue and from whom. After repeating the tiresome talking point and unlikely claim that the "middle class is disappearing," the report states:

"While these problems have existed for decades, recent places like Ferguson and Baltimore highlight that many communities are near a tipping point that, when reached, will manifest itself in violence, civil disobedience, extensive property damage, and long-term damage to the fabric of the community."

From this point, the report goes on to talk about how the number of billionaires have doubled and the number of people who have less than $10,000 in wealth, while anybody who has actually paid attention to Ferguson and Baltimore's governments are wondering how the hell the report got to this space.

Is Brookings actually trying to blame the gap between billionaires and the poor for the racial tension in Ferguson? Which venture capitalist was it who told the Ferguson police to step up fine collection to rake in more money for the city's coffers? Which hedge fund manager invented the bureaucratic court system in Ferguson and other St. Louis County cities designed to wring every last cent from any indigent minority who couldn't afford an attorney? Which Wall Street "fat cat" is adding additional fees to every little fine so that getting pulled over for something as simple as not signaling a turn could end up costing hundreds of dollars for somebody who could end up losing his license and his ability to even work?

The "one percent" may play a role in how horribly the poor are treated in communities like Ferguson and Baltimore, but the "one percent" we are talking about all have gotten their wealth by working for and running these very cities. It's absolutely remarkable after pointing out how cities stand to lose fine revenue thanks to technological innovation, these report writers completely, bafflingly fail to make any connection between fine-mongering and its impact on its poorer citizens.

It's all the more important that cities be forced to reckon with this mentality as the technological innovation from driverless cars pushes forward. Why? Because just like every cutting edge technology, it will be the richer citizens who are able to take advantage of it first. Eventually it will filter down to everybody else (go check out the prices for HDTVs these days), but until then, the first folks who will benefit from having to deal with less risk of police tickets and citations would be the rich. And that means, unless they are unwilling to make cutbacks, cities will be pressured to target their poorer citizens even more to make up for the losses. Cities will claim it's all for roads and infrastructure, but we all know by now it's often to maintain government salaries and pensions even as cities reduce their level of services.

Read the full Brookings Institution report here.

(Hat tip to CharlesWT)