The U.S. continues to have one of the highest car ownership rates in the world with approximately 90% of Americans owning at least one car and almost 25% owning three or more. A range of factors including high urban home prices, the nation’s dispersed geography, and underfunded public transit systems have all contributed to the automobile’s vital role in our lives. But two recent developments, road congestion pricing and driverless vehicles, may signal a shift in Americans’ transportation habits.
Americans have always had something of a love-hate relationship with their cars. For most, car ownership has been both a practical necessity and something of a rite of passage, offering keys to independence. But these benefits come with some significant downsides. First, while owning a car has always been expensive, that is particularly true today. Higher material and labor costs combined with more advanced technologies have pushed average new vehicle prices up approximately 60% over the past decade to just under $49,000. These same forces have also contributed to higher annual carrying costs for things like insurance, maintenance, and repair. The U.S. Department of Energy reports that the average U.S. household spent almost $10,000, or 16% of all expenditures, on transportation in 2020 – most of this related to car ownership.
Rising road congestion also continues to plague drivers. Average one-way commute times have risen steadily over the years reaching a peak of 28 minutes in 2019. The COVID-related shift to remote work caused a temporary decline but by 2022, commuting times were once again increasing and now they sit right below their earlier peak.
Two recent developments could provide some relief to road-weary commuters. The first is the roll-out of a congestion pricing scheme in New York City. The program, which charges drivers a $9 fee for entering Manhattan’s central business district (below 60th street), was introduced in January after several years of delay. While some business owners have reported a negative impact to sales, the program has so far largely been seen as a success. Traffic speeds in key commuting lanes and public transportation rates are up meaningfully while congestion and accident rates have fallen. The program is expected to generate $500 million in its first year of operation which the city will reinvest in its long-ailing transit system. New York’s early success with the program builds on that of other major cities like London, Singapore and Stockholm and could speed adoption by other U.S. cities experiencing similar transportation challenges.
Robotaxis, or driverless ride-hailing vehicles, could also transform the commuting experience. While the component technologies have been under development for years (AI, LiDAR, cameras), the first public, fully driverless robotaxi service was not launched until 2018 when Waymo entered the Phoenix market. A wide range of global companies have entered the race since then. In the U.S., “first-mover” Waymo continues to dominate. By early 2025, the firm had a fleet of approximately 1,500 vehicles offering 200,000 rides each week across six U.S. cities.
Coming from behind, Tesla has also very publicly entered the game by just launching its initial service in Austin. Several Chinese companies are quickly gaining technological capability and scale. Baidu’s Apollo Go leads in China where competitors WeRide and Pony.ai are also quickly expanding. Although much smaller in scale, VW appears to be leading the effort in Europe. All have global ambitions (see the table).
While profitability remains elusive in the robotaxi industry, the business bears watching. Many of the obstacles plaguing the industry to date (uncertain safety, inflated costs, clunky technology) are starting to fall and consumer acceptance is slowly gaining steam. Still, the path forward is likely to be bumpy. Clearer and more consistent regulations around issues like safety and liability are needed, and infrastructure investments – particularly in charging stations and vehicle communication systems – continue to lag. But the business has come a long way over the past ten years. In five to ten more, the correct title for this article might well be “News from the passenger seat”!
