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Opinion piece


“Within the US, the average personally owned autos require the same physical space as three New York studio apartments, are used roughly 7 per cent of a 24 hour day, and for the vast majority drive fewer than 50 miles a day”


growth of those industries that supported transportation. For example, consider the US Insurance industry. As


more and more consumers acquired vehicles, questions quickly emerged regarding conflict resolution. One solu- tion implemented from state to state was compulsory insurance. As a result of mandatory insurance laws, con- sumers, and companies now spend approximately $190bil- lion annually on vehicle insurance. The insurance industry, across all forms of coverage holds an investment portfolio exceeding US$1trillion, with approximately 70 per cent in bonds. The investment portfolio for just vehicle insurance is approximately 30 per cent of that trillion. Thus, just within the United States, vehicle insurance accounts for nearly US$500billion of liquidity. The investment portfolio is where the majority of the net profits are achieved for most vehicle insurance companies. Said differently, of the US$190billion in premiums paid, approximately 103 per cent flows back into the economy in the form of jobs, operational expenses, and most importantly to this article, small businesses such as vehicle repair facilities, lawyers, health care professionals, and lost wages. In short, the vehicle insurance industry can be viewed as a massive system that simply organizes cash flow. This cash flow system is the “crash economy” and as evidenced, includes many industries and economic sectors.


UNSUSTAINABILITY This “lay of the land” is important to understand, in order to also understand how unsustainable such a system will be at a global scale. In Brazil, China and India, with massive emerg- ing middle class populations in the midst of unprecedented migrations into urban centers, the transportation path expe- rienced by Europe, Japan and the United States over the past hundred years is not an option. Vehicle ownership in the United States is 840 vehicles per


1,000 people, not drivers, but general population across all ages. This ratio is 590 per 1000 in Japan and 547 per 1000 throughout the EU. Consider that in China, this ratio is only 58 per 1,000 and yet in 2010 China surpassed the United States in number of vehicle purchases. Over the next decade, approxi- mately 300m people will migrate from rural communities into urban centers in China. This would be like the entire popula- tion of the United States moving into Mexico City. Approximately 1m of India’s population are migrating from rural regions into the major cities. Air quality within


North America Vol 8 No 3


cities such as Beijing is now secondly only to that measured in wildfires. Finally, consider that within the United States, the average personally owned autos require the same physical space as three New York studio apartments, are used roughly 7 per cent of a 24 hour day, and for the vast majority drive fewer than 50 miles a day. Despite being capable of speeds in excess of 100 mph, the typical owner averages only 18mph.


SYSTEM ERROR That 93 per cent of all vehicle accidents can be attributed to human error is a well-known fact. While vehicle fatali- ties across the EU, US and Japan have declined 25 per cent since peaking in 2008, cars remain the leading killer of young adults. Vehicles still take more than 1m lives around the world. Drivers within the United States experience roughly 6m reported crashes annually, with an estimated 10m that go unreported. Around 60 per cent of the 6m result in some form of injury, and 80 per cent of those are permanent. What these statistics indicate is an enormous lack of effec-


tiveness, lack of efficiency, in how people move from point A to point B that has been a hallmark of “state-of-the-art” societies throughout history. Additionally, modern telecom- munications now move knowledge no longer dependent upon vehicles. The implications of these US statistics being replicated in proportion across India and China are virtu- ally unimaginable. And yet, other consumer trends point towards a much different future. Consider these related facts. According to “Consumer


Reports” and NHTSA, vehicle ownership also peaked in 2008. For the first time in recorded US demographics, more than 50 per cent of the population now resides within major metropolitan cities, a migration trend that continues. From a transportation perspective, these environments hold plenty of incentives to give up that second vehicle, or ownership entirely, given the alternative modes of moving from A to B, not the least of which is shared mobility with a year over year growth rate north of 50 per cent. Obtaining a driver’s license used to be a given right of passage. The first gen- eration to be born wired, so to speak, seem to be foregoing that license at a steadily increasing rate. According to the Department of Transportation, among ages 16–21, license rates have declined by 19 per cent. However, vehicle fatalities remain the number one killer of young adults. According to the Rocky Mountain Insurance Institute, as well as the CDC,


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