If automated vehicle becomes commercialized, what should public transit agencies do? Should they adopt the change and start the automated bus services? Go or no-go decision mainly depends on the cost of each scenario. Thus, I picked the biggest transit agency, LA Metro, and analyzed their 2019 cost structure to see how and where their budgets are spent. Based on their cost structure, I then analyzed whether it is feasible to start the automated vehicle for LA Metro.

 

The transportation expense of LA Metro is $2,192.9 million for FY2019. Each cost item is allocated to either vehicle hours/miles/fleet. In this way, I was able to think about the cost reduction in terms of operating hours, distance or the number of objects. Unit cost is calculated based on the annual service hours, miles, and total fleet size of the LA Metro.

 

Not surprisingly, 52% of the total operating expense is spent on labor and benefits. If the cost for drivers are more than half of the total operating cost of LA Metro, automated vehicle must be an intriguing option for transit agencies who want to minimize the personnel expenses. However, what about the other costs including the fleet and maintenance costs? Electric bus is way more expensive then diesel bus. According to the study of ‘Electric bus analysis for New York City transit’ by Columbia University and New York Transit, electric bus cost about $300k more than diesel bus. However, total savings of electric bus are estimated at $39k per year over the 12-year lifetime of the diesel bus (Aber, 2016). If we compare the lifetime cost of operating a diesel bus compared to the electric bus, we can say it’s more cost effective to run electric bus in spite of its high initial cost.

 

Another noticeable fact about electric bus is that although the initial cost is expensive, the cost of battery pack will get lower. Nykvist and Nilsson (2015) has found out that cost of electric vehicle battery pack is falling at average rate of 14% annually. The trend shows that entry barriers of electric bus will be not high as what is now. Lastly, we cannot disregard the environmental costs of diesel bus. Electric bus uses more environmental friendly fuels, which will save us lot more indirect environmental costs by causing less pollution.

 

All things considered, why do we still beg the question of go or no-go for automated vehicle? Earlier the agencies start the change, the sooner they will save the costs with better services. Based on the cost structure of the transit agency, I think it is reasonable to phase in automated vehicle in public transit agencies.