A Transportation Revolution is Coming to West Boca and the World

This post was motivated in part by a conversation the other night with a junior at West Boca High.

Our world has changed dramatically over the last hundred years or so. It’s already visible in West Boca and the changes are accelerating. For one take on all the changes and the coming artificial intelligence revolution see this great blog post on Wait But Why.

Imagine taking a time machine back to 1750 … When you get there, you retrieve a dude, bring him to 2015, and then walk him around and watch him react to everything …

This experience for him wouldn’t be surprising or shocking or even mind-blowing — those words aren’t big enough. He might actually die. …

Because of the Law of Accelerating Returns … the 21st century will achieve 1,000 times the progress of the 20th century. If … correct, then we may be as blown away by 2030 as our 1750 guy was by 2015

One piece of this change has already started happening with Uber and Lyft changing how we get places. Cars that drive themselves are becoming reality. But that’s just the beginning.

There’s a 2016 report from McKinsey on autonomous cars that gives some idea of what’s coming, though it may underestimate the speed of these changes.

Once technological and regulatory issues have been resolved, up to 15 percent of new cars sold in 2030 could be fully autonomous.

Companies like Tesla and Google subsidiary Waymo are pushing hard toward fully autonomous cars. They may only be a few years away. Combine this with the Uber/Lyft ridesharing model as Tesla plans to do, and the cost of a ride drops by 50% or more because you no longer have to pay the driver. There are other potential savings including reduced insurance costs and lower operating costs for electric vehicles.

But that’s only part of the transportation revolution. Along with Tesla, Elon Musk is also pursuing another radical change through tunnels The Boring Company. There are two big ideas in this. For local transport within a metropolitan area they’re pursuing Loop:

Loop is a high-speed underground public transportation system in which passengers are transported on autonomous electric skates traveling at 125-150 miles per hour. Electric skates will carry between 8 and 16 passengers (mass transit), or a single passenger vehicle.

For longer distances such as trips between cities they’re talking about Hyperloop:

Hyperloop is an ultra high-speed underground public transportation system in which passengers are transported on autonomous electric pods traveling at 600+ miles per hour in a pressurized cabin. Similar to Loop, Hyperloop pods will transport between 8 and 16 passengers (mass transit), or a single passenger vehicle.

Musk and his Boring partner Steve Davis discussed what they’re doing in an hour long session this past May:

There’s a good summary of that on GeekWire.

On a local level picture a typical metropolitan area like South Florida with several tunnels. A couple of them run north to south from Miami to Jupiter and several run east to west such as underneath Glades Road in Boca, Atlantic in Delray, and Hillsboro south of the county line. The vast majority of residents live and work within a few miles of a tunnel. You can get where you want to go with a short and inexpensive rideshare from home, a high speed loop ride, and another short walk or rideshare to your destination. You go from your home in West Boca to the American Airlines Arena in 30 minutes for $10. You can go to Mizner Park or the beach in 10 minutes for $6. Add Hyperloop to this story and you get to DisneyWorld or UF in 30 minutes for $25. New York City is a 2 hour ride for maybe $60. If you really get into it SpaceX may deliver travel to anywhere in the world in under an hour.

This may be only 20 years away. Many people will decide not to bother owning a car, saving thousands of dollars a year. This frees up a lot of money for consumer spending in other areas, and it will impact existing industries.

From an investor perspective many car companies and airlines will collapse. BMW and Mercedes sedan sales are already starting to go down due to Tesla’s rise. We already see a lot of this in and near West Boca with a Tesla store in Town Center Mall and a large Tesla charging area at Delray Marketplace.

New Tesla charging station at Delray Marketplace; image from https://www.teslaownersflorida.org/Public-News/6353657

Some car companies will manage to join the electric revolution, but others will fail. Autonomous tractor-trailers like the Tesla Semi could deliver a death blow to conventional truck manufacturers and the rail industry, all while lowering the cost of consumer goods. Car insurance companies will be toast as rideshare companies self-insure. Reduced car accident deaths will increase life expectancy. Miami may become tolerable.

The shift to electric transportation will dramatically reduce demand for oil. According to the US Energy Information Administration 71% of US oil consumption goes to gasoline and diesel for cars, trucks, trains and boats. The price of oil will plummet, taking oil companies down. Millions of jobs in the US will vanish, and the same for millions more overseas.

Some of the effects are harder to see. Parking garages will become unnecessary as riders are dropped off by the rideshare. Plazas like Mizner Park and Promenade could replace their parking structures with apartments or more shops. The parking nightmares at Westwinds and Delray Marketplace would be over.

Individual and family housing decisions might change. Some might choose to live near a tunnel for convenience, but it also becomes easier to live out in the sticks. New homes won’t need garages – though many of us use garages for storage rather than cars.

As these changes take place, capital will be freed up along with consumer dollars that can open up new markets, industries and job creation that are very hard to predict.

How do you think this might play out? Let us know in the comments.

Warren Redlich, the author of this blog, is an investor in Tesla, along with other companies (such as Honda) that might be affected by these projections.

Author: Warren Redlich

Warren Redlich is a real estate agent and an attorney. He focuses on selling homes in West Boca Raton. Call or text Warren at 561-536-3645. Warren is also a tech YouTuber covering Tesla, SpaceX and more. His YouTube channel is https://www.youtube.com/c/WarrenRedlich/ and he sells Elon Musk related t-shirts and other merchadise at https://ElonBits.com. Warren also publishes videos about politics at https://warrenredlich.locals.com/