Time over treasure: The surprising economics of self-driving buses

The study on self-driving buses, and comprehensive cost-benefit analysis have unearthed unexpected insights, showcasing innovative transportation technology.

In the past decade, the buzz around self-driving vehicles has reached a fever pitch. While visions of futuristic, hands-free commutes dominate the conversation, it’s crucial to sift through the hype and examine the real-world implications. A recent research endeavour delved into the emerging field by exploring the potential impact of introducing self-driving buses in southern Stockholm, Sweden.

A panoramic lens

While previous studies have either employed qualitative methods or focused on a few isolated aspects, such as decreased accident rates, highway capacity, or pollution increases (for example, excellent early work by Fagnant and Kockelman, 2015, and Milakis et al., 2017), the research published in Transportation Planning and Technology captures a panoramic view of the situation using what’s called a cost-benefit calculation.

The benefit of doing cost-benefit calculations is that one gets a sort of “total” value, i.e., if an investment is profitable or costly from a complete, societal perspective. When it comes to a lot of infrastructural costs, this is often the way to go, as the government usually bears the costs. In contrast, advantages are individual, e.g., fewer accidents or quicker travel times.

In a cost-benefit analysis, one, therefore, strives to put a price tag on all relevant factors, including fatalities (i.e., the price of human life), travel time changes (people prefer shorter commutes), and pollution (e.g., looking at health outcomes from NOx particles from the fuel), so that we can understand the total results (see Conservation Strategy Fund for a simple introduction to cost-benefit calculations).

In this study, we, therefore, did just that: we did a cost-benefit calculation of a proposed self-driving bus line. As this is a somewhat futuristic project with a lot of unknowns, we used three scenarios to investigate various levels of self-driving capabilities:

  • Scenario 1 assumed that the vehicle could drive by itself in some environments but would require an active driver elsewhere. This would still entail that a driver is onboard at all times but that they could focus on other tasks for parts of the journey.
  • Scenario 2, on the other hand, imagined that full self-driving capabilities had been achieved, mostly through adjusting the physical infrastructure. Most notably, this would entail building one additional road lane, which is very costly.
  • Scenario 3, then, also assumed that full self-driving capabilities were in place but that this was achieved by more sophisticated digital technology and digital infrastructure.
Credit. Author

Travel times mean that passengers save time commuting. Ticket revenues are for the public transport company, reflected in the Travel costs for consumers bar. This bar is mostly positive because a lot of people are switching from car to public transport, which is cheaper overall. Pollution and greenhouse gases include health outcomes and a price per tonne of CO2, mainly from fuel. Accident costs assume a calculated cost for human life and injuries. Public transport operating costs especially involve the cost of personnel, which would drastically decrease if the buses were driverless.

Infrastructure and time savings

So, what did the research find? The research is encapsulated by two overriding factors that dwarfed all others: infrastructure costs and time savings. At first glance, you might be tempted to scrutinise the exact numbers in figure 1 of the study above. However, it’s the scale of these factors that genuinely matters. If separate roadways are needed for self-driving buses, as in the second scenario, the costs skyrocket (see the large minus bar at the bottom), making it an impractical choice. Conversely, the benefits of time savings (large plus-bar at the top)  for passengers are monumental. While the figures assigned to this are hotly contested, even a conservative estimate confirms it as a substantial advantage.

Is safety not important?

Interestingly, one widely-touted benefit of self-driving vehicles – increased safety – did not significantly impact our analysis of buses. You might wonder why. The answer lies in the already low accident rates for traditional buses. Even if self-driving technology could reduce these rates by a drastic 90%, the overall savings would still be marginal compared to other factors.

That’s not to say safety is a non-issue. If the shift towards self-driving buses encourages more people to opt for public transport over cars, the overall decrease in road accidents is more visible because people don’t get in the car in the first place.

But what about those factors that can’t be so easily quantified? We considered these, too. However, these mostly concerned potentially needing additional road lanes, which we already concluded was very costly.

Invest! But at whose price?

For public transport operators, the message is clear: Invest in self-driving technology, but do so wisely. Incorporating self-driving buses into existing roadways is a more economically sound approach. Even if full automation may be a distant dream, advancements in driver-assistance technologies could make travel more enjoyable and efficient for passengers.

Yet, this convenience comes with its challenges; since the primary beneficiaries are passengers rather than operators, finding a way to fund these improvements remains a hurdle. Potential solutions could include public subsidies or increased ticket prices, but neither is very popular.


Journal reference

Almlöf, E., Zhao, X., Pernestål, A., Jenelius, E., & Nybacka, M. (2022). Frameworks for assessing societal impacts of automated driving technology. Transportation planning and technology45(7), 545-572. https://doi.org/10.1080/03081060.2022.2134866

Erik Almlöf is a Doctoral Candidate at the Integrated Transport Research Lab, located within the esteemed KTH Royal Institute of Technology in Stockholm, Sweden. With over a decade of professional experience as an analyst, he has contributed his expertise to various sectors, including academia, public institutions, and private enterprises. His current research primarily focuses on investigating the societal implications of emerging autonomous technologies.