My 13-year old recently discovered Stranger Things, which if you grew up as a white nerd in suburban America the 1980s is about as close to a televised transfusion of pure comfort fluid as you're ever likely to find. Until the mind flayer makes its appearance, of course. After that its pure terror.
In the world of transportation, we have our own version of the mind flayer—the "traction monster" depicted in George Luks' macrabe 1899 cartoon for The Verdict magazine (above). Traction is one of those great Victorian-era terms that's gone the way of the dodo. Derived from the Latin traho (to drag or pull), during the second half of the 19th century traction served as a catch-all for the stunning array of new urban transportation systems plied by vehicles drawn along under their own power, rather than by beast. Much as micromobility today covers a number of vehicle types (scooters, bikes, electric mopeds) and networks (dock-based, dockless), traction encompassed railroads, trams, trolleys, and streetcars powered by steam, cable, and electric motors.
The traction monster didn't eat human brains, but instead combined capital, corruption, and new network technologies for electric power, lighting and propulsion to dominate the lives of entire city populations. And the way that cities responded to this market failure shaped their entire future, often decisively. New York City summoned the civic will to ram through a new network, the subways, that shattered the streetcar networks which were the monster's lifeblood. Seattle, even then the hot bed of radical progressivism in America, simply municpalized the entire infrastructure lock, stock, and barrel. Today, the city still runs its old streetcar network (long since converted to buses), as well as it electric light and power utility. But in Philadelphia, the monster proved too strong. Subway construction began late and never scaled up in the way it did further north. The city was already being eclipsed by New York. Failure to ensure a modern mobility system for the future simply sealed its fate. (The story of electric streetcars in Philadelphia is detailed in Chapter 7 of GHOST ROAD, "The New Highwaymen")
And so, like the tweens of Stranger Things we sent the traction monster packing back to the nether world, the "upside-down" in the show's parlance. But we never really killed it.
robotic traction take shape
Today, the role of "electric traction" is replaced by "robotic traction", networked technologies for self-driving ride-hail service. Three would-be monopolies are now poised to enter the market, possessing the technology stack, the capital, and the telematics cloud required to roll out taxibot services on a national scale:
- Alphabet, through its Waymo subsidiary, spun out of Google's self-driving car project in 2016, and currently valued at more than $30 billion;
- Amazon, through its Zoox subsidairy, acquired in 2020 for $1.2 billion;
- General Motors, through its Cruise subsidiary, also valued at $30 billion, including a $2 billion cash stake by Microsoft;
A fourth pairing between Hyundai and auto parts giant Aptiv's Motional group, looks promising, but isn't likely to play in North America in the short term. It's likely they'll be a force in Asia, though, building out of acquired startup nuTonomy's R&D base in Singapore where it has been testing in real-world settings for years. There are others in China, and possibly Europe, too. Let me know, and I'll cover those in a future newsletter. Ford is also moving forward, but its efforts seem much less promising at this point.
For years, the on-the-ground impacts of all this investment have been meager. But in October, Waymo finally unlocked the safeties on its commercial service in metro Phoenix, and Amazon and GM appear to be targeting each other for rollouts of nearly identical 4-passenger urban robotaxi vehicles in San Francisco any day now.
If Alphabet starts expanding Waymo's footprint across the Sun Belt, where its technology is likely to scale well; and if Amazon and GM decide to battle it out in San Francisco; over the next few years we may finally see a long-anticipated feeding frenzy play out. As robotaxis undercut human-driven ride-hail prices, prove nearly as convenient as private cars, and fill in all kinds of gaps left by struggling transit networks... they may quickly come to dominate the market for urban mobility.
And so we see a possible future taking shape. In the near-term, another "capital-fueled deathmatch" as Tim O'Reilly called the battle betwen Uber and Lyft (which I expect to become little more than cheap, recognizable consumer brands snapped up in a few years for pennies on the dollar by these robotraction monopolies), that makes what we have seen so far look small in comparison. Transit systems, especially bus operations, will be decimated. Those that don't take the advice of planners like Jarett Walker and consolidate their networks around frequent, high-speed trunk service will fail.
The traction monster has awakened.
Men's hairstyles haven't changed much the old days of traction monopolies to the modern ones—from 1890s handlebar mustaches to 2020s neck beards. The economics haven't either. But now instead of dominating a single city, these operators hope to dominate the entire planet. Softbank's own ride-hail empire, which spans every continent, is the new model.
But in this new market reality, cities are likely to have even less power than before. Will there be more Philadelphias, under the yoke of an Amazon or Alphabet moblity monopoly—and fewer Seattles or New Yorks where municpial control or yet another new technology breaks the deadlock?
These are open questions, but one of the most frightening prospects is whether cities' best tool for managing future mobility—congestion pricing—might be weaponized and turned against them. It was just this prospect that got me thinking about traction monopolies in the first place back in 2018, when I came across a column by Tom Standage in The Economist, under the dry headline, "The market for driverless cars will head towards monopoly". Standage is no amateur when it comes to speculating about big movements in tech. And he knows his history. His book The Victorian Internet mapped some of the stunning similarities between the telegraph's disruptions in the 19th century and the internet's in the 1990s.
The column laid out a number of factors from economies of scale in machine learning to the winnowing effect of tight safety standards on smaller, less financially-flush firms. The most disturbing part of Standage's piece came near the end, though—where he speculates about the network effects and how it might interact with congestion pricing schemes.
But a ride-hailing service which grew to account for a substantial share of traffic would face a different set of incentives. Congestion costs imposed by one of its cars on another would be internal to that firm, which would have both the reason and the ability to do something about it—by varying prices with demand, perhaps, or by offering reduced rates to customers willing to share a car. Other cars or services could attempt to free-ride on the free-flowing traffic created by dominant firms. But concentrated control over roadways could make the politics of road fees more tractable: as the winning firms’ bargaining power rose, as fewer middle-income households owned their own cars, and especially if, as Daniel Rauch and David Schleicher of Yale University suggest, AV firms join with governments to provide public transport and mobility services.
What Standage was implying that a robomoility monopolist, working closely with city government, could simply pass congestion charges onto passengers. Coupled with its total control over both supply and demand through algorithmic pricing and dispatching, it would but this latter day traction monopoly in control of a city's most lucrative new revenue source.
Needless to say, regulating this system would be exceedingly difficult. Most of Chicago's politics from the 1890s to the 1910s, for instance, was dominated by battles over electric traction franchises. Its not hard to see a cutthroat struggle for control over the money coming off a congestion-tolled ride-hail monopoly, with the operator wielding unprecedented power to pour on or hold back funds from city coffers. I shudder to imagine the level of corruption, not to mention the potentially perverse mobility outcomes as business and public finance objectives take over congestion pricing's purpose.
n.b. For some more Victorian-era AV backcasting, Alex Roy has a great piece about what the history of automated elevators can teach us about the transition to AVs.