Blog

Peter Thiel: ICT offers low cost, green solution to metro area transportation, housing challenges

Posted onLeave a comment

Venture capitalist and PayPal founder Peter Thiel was recently interviewed on the Fox Business Network on the city of the future. Thiel talked about the two major shortcomings of today’s city as a situs for knowledge work concentrated in centralized metro commute-in offices: transportation and housing. Transportation systems – roads, highways and public transit – are “badly inadequate” in most metros, Thiel said, and housing costs are exorbitant. Both leave knowledge workers with two bad choices. “People need to have super long commutes or live in small apartments near the city centers where they have to spend all of their salaries on the apartments,” Thiel explained.

That’s where information and communications technology (ICT) can provide a workaround by allowing knowledge work to be dispersed outside of urban centers, according to Thiel. ICT solves the housing problem since it provides access to more affordable housing while at the same time eliminating the need for daily commute trips.

The idea isn’t new and has spawned years of debate despite the strong benefit in solving the housing and transportation challenge ever since Jack Nilles coined the term “telecommuting” in the 1970s. That debate continues to play out nearly two decades into the new century among organizations – ironically including ICT innovators like Yahoo, HP, Apple and IBM – that resist substituting ICT for transportation, fearing a geographically dispersed workforce won’t be as productive or collaborative as one co-located in a centralized, commute-in office setting. Thiel explains:

The ICT version (of transportation) people have talked about for decades is telecommuting. And so would there be some way so that you won’t need transportation at all, you could just do your work remotely. For a variety of reasons this has not worked over the last 30, 40 years people have been talking about it. The [perceived] problem generally is that people who work from their homes, they don’t work as hard. A lot of the value of work comes from talking to people in various ways.

However, Thiel notes management practices are changing to overcome those concerns that concentrate on managing the production and delivery of the work product. That focus necessarily forces a degree of diligence and collaboration to get the work done, he implies.

I think we’re starting to see more and more of this telecommuting in Silicon Valley and elsewhere where people are finding small teams of developers outside of Silicon Valley, there are ways to sort of bundle, put the work in certain packages that you allocate to different people. So I think maybe one of the end runs around the transportation system will be telecommuting. That’s a trend that’s underrated that’s worth exploring a lot more.

Norman Macrae on telecommunications as transport, work revolution

Posted onLeave a comment

Telecommunications are now recognised as the third of the three great transport revolutions that have, in swift succession, transformed society in the past two hundred years. First, were the railways; second the automobile; and third, telecommunications-attached-to-the-computer, which was bound to be the most far-reaching because in telecommunications, once the infrastructure is installed, the cost of use does not depend greatly on distance.

[C]lose to 90 percent of the American workforce in 2025 can telecommute to their daily work from their family homes and the majority choose to do so.

Norman Macrae, The 2025 Report: A Concise History of the Future 1975-2025 (1984). New York: Macmillan Publishing Company.

U.S. commute length grows from 2012 to 2016

Posted onLeave a comment

Americans are driving longer on the country’s roads and bridges to get to work. This is particularly true in larger metro areas or smaller metro areas within commuting distance of a larger metro area. Shorter commutes are generally found around smaller metro areas. On the whole, the census found that commutes got slightly longer from 2012 through 2016 than in the previous five-year period.

Source: America today: Longer commutes, higher rents, less English at home – CNNPolitics

Uber’s silly solution to the daily commute grind

Posted onLeave a comment

While the idea of casually commuting to work via flying aircraft is quite exciting, Uber Elevate still has many obstacles to navigate before takeoff. One hurdle consists of developing the infrastructure to support VTOL aircraft. This new infrastructure would include building ‘vertiports’. A ‘vertiport’ is a VTOL aircraft hub comprising of multiple takeoff and landing pads as well as charging stations for the vehicles. Vertiports would need to be constructed all around the cities and suburbs in order for Uber Elevate to be effective. As of now, Uber plans to build vertiports on existing helipads, on top of parking garages, rooftops, or on unused land around highway interchanges. Uber believes in the long run creating this new infrastructure will be more cost effective than continued work on building and repairing roads, rails, bridges, and tunnels.

Source: Skip the commute and fly to work with Uber Elevate – Twin Cities Agenda

This is a silly pie in the sky pipe dream. It calls for the construction of more transportation infrastructure — a 20th century solution to automobile commute congestion — to accommodate a 21st century vision straight out of The Jetsons. At a time when infrastructure funding is constrained.

We don’t need another form of transportation infrastructure to reduce commute congestion and the associated time suck of sitting in traffic. Instead, we need to better utilize and expand as necessary existing telecommunications infrastructure to serve knowledge workers in communities where they live, working at home or in shared supported office facilities. That can effectively reduce and eventually eliminate the commute rather than taking it to the skies.

As management expert Peter Drucker famously asked, why move a 200 pound body when all that’s needed is its eight pound brain? That question applies whether it’s ground or air transportation.

Michael Shear’s Rx for the increasingly congested commute and improved access to knowledge jobs

Posted onLeave a comment

The biggest challenges facing metro regions are transportation and traffic congestion, accessible well-paying employment opportunities and affordable housing. In the world of knowledge organizations, a closely related challenge is determining to what extent staff members will work in the centralized, commute-in office and which are “remote” workers who perform their job duties outside of the office, typically working from home.

Michael Shear of Strategic Office Networks LLC has a solution that addresses all of these for knowledge organizations and regional transportation planners: transitioning away from the centralized, commute-in office of the Industrial Age economy to a more decentralized structure that utilizes today’s advanced information and communications technologies (ICT) to bring the work to communities where knowledge workers live. Those technologies link Enterprise Centers® that serve as community-based workplaces for as little as a few dozen to several hundred employees working for major employers located throughout a metropolitan or regional area. These centers are the building blocks of what Shear terms Distributed Metropolitan Design®.

I interviewed Shear for the Last Rush Hour podcast in December 2015. Listen here.

Key to Shear’s concept is reframing how we think about transportation. With today’s robust ICT capabilities that make it possible to work from most anywhere and traffic congestion crippling many metro areas, the issue is no longer how to most efficiently transport knowledge workers to centralized commuter offices. It’s now about access to a workplace that meets the needs of both the worker and the employer organization.

Traditional transportation initiatives encourage commuters to use public transportation or carpool in specially designated highway lanes. Transportation planners plan more expressway lanes to accommodate the continued growth in commute transportation demand. That remedy has hit the wall as metro areas continue to struggle with commute congestion, particularly as knowledge workers are forced to select housing far from their offices that they can afford, adding to commute transportation demand. Meanwhile, highly compensated workers bid up the cost of housing in central metro areas, fostering a severe housing affordability crisis such as currently afflicting California.

Shear’s concept recognizes that organizations have substantial investments in existing office space. They often can’t quickly transition to an office-less virtual organization. Nor are many workers ready or able to work from a home office or wherever else they choose. Much of this reality drives the debate over the pros and cons of “remote” work and “telework.” With a distributed organizational structure, these terms become far less relevant. When staff need to be co-located for team meetings and project sprints requiring intense collaboration that can be accomplished in settings outside of dedicated central offices. Shear also argues that the most prevalent form of “casual” telework — where only some knowledge workers work from home a day or two per week or more infrequently — cannot make a significant impact on transportation demand and metro area congestion.

A primary challenge for Shear’s concept is determining the right size for the Enterprise Centers®. They provide supported office space in residential communities and must be sensitive to the character of those communities. They must be large enough to be economically efficient but can’t grow too large because they will then generate substantial commute trips from non-locals and objections from nearby residents, effectively becoming the big commute-in cube farms and sprawling parking lots they would replace. Their size would likely be a function of the housing density of the neighborhoods in which they are located. Larger facilities would serve higher density areas where knowledge workers live within walking or bicycling distance with smaller ones most suited to lower density neighborhoods and reached by those modes of transportation or short trips by automobile or public transportation.

Flying Ubers by 2020? The Future Passenger Drones

Posted onLeave a comment

Uber is pushing to become the world’s next airline — without buying any planes. Instead, the company believes that a fleet of flying cars could solve the dilemma of daily commutes to work and between meetings in increasingly congested cities. And with the announcement on Wednesday that Uber has secured a contract with NASA to develop software to make “flying taxis” possible, that push seems one step closer to reality.

Source: Flying Ubers by 2020? The Future Passenger Drones

This is nuts. We already have the technology — information and communications technology — that makes daily commuting to a distant office unnecessary.

Commuting isn’t a transportation challenge in the 21st Century. It’s a management challenge: learning how to manage knowledge workers who are geographically dispersed. As management expert Peter Drucker put it years ago, “What is the point of spending such huge sums to bring a 200-lb.-body downtown when all you want of it is its eight-and-a-half pound brain?”

Why Do We Still Commute? – Pacific Standard

Posted onLeave a comment

Over the last year, many companies have ended their liberal work-from-home policies. Firms like IBM, Honeywell, and Aetna joined a long list of others that have deemed it more profitable to force employees to commute to the city and work in a central office than give them the flexibility to work where they want. It wasn’t supposed to be this way—at least according to Norman Macrae.

Macrae foretold the exact path and timeline that computers would take over the business world and then become a fixture of every American home. But he didn’t stop there. The spread of this machine, he argued, would fundamentally change the economics of how most of us work. Once workers could communicate with their colleagues through instant messages and video chat, he reasoned, there would be little coherent purpose to trudge long distances to work side by side in centrally located office spaces. As companies recognized how much cheaper remote employees would be, the computer would, in effect, kill the office—and with that our whole way of living would change.

Source: Why Do We Still Commute? – Pacific Standard

As readers of this blog know, I am firmly in Macrae’s camp. I have a couple of issues with this analysis by Greg Rosalsky. It contains the implicit assumption that knowledge workers commute in order to have real time, face to face conversations with their colleagues every Monday through Friday. The value of these co-located daily discussions is cited to justify the daily commute.

That might hold true for those working in intense think tank work environments like Google’s Moonshot Factory where the job is a group exercise of spitballing and deeply analyzing concepts for their practicality and most importantly, their potential monetization. That’s more akin to a live-in academic residential fellowship than the usual type of work most knowledge workers perform with most of its components and deliverables in digital form accessible from most anywhere. In fact, many of them find they are more able to think and concentrate outside of centralized, commute-in office spaces such as in quiet home offices and communicate quite easily with colleagues using online collaboration tools.

Rosalsky’s article also repeats the “urban centers are cool and people want to live there” to partly explain why we continue to commute to centralized offices in metro areas. But as Rosalsky also notes, the cost of living there is quite high. It’s often out of reach for all but the highest paid knowledge workers and is itself a factor driving lengthening commutes to distant locales where housing is affordable.

To Rosalsky’s credit, he does mention the personal costs of commuting borne by knowledge workers — and indirectly by their organizations due to the adverse health and wellness impacts of daily commuting. I would argue that the maturation and proliferation of information and communications technology has brought us to the point predicted by Macrae where for the vast majority of knowledge workers, the costs of daily commuting can no longer be justified nor the expense of maintaining centralized, commute-in office space for their organizations.

2037: The debut of the rolling office cubicle

Posted on2 Comments

In the 1960s, the creators of the television cartoon series The Jetsons envisioned in the 21st century, we’d be jetting daily to the office, whooshing through the stratosphere in personal aircraft between residential and office buildings in a mere few minutes.


Another vision of the future 37 years into the century is decidedly different. There are no personal flying vehicles to speed the commute. Instead, people are still commuting by car to offices distant from their homes just as they did in the latter half of the 20th century when automobiles, highways and cheap fuel made it possible to live far from one’s place of employment, giving rise to the suburban and exurban boom.

In 2037, the suburbs are still booming and moving farther away from centralized metro commuter offices than at the start of the new century. But the commute vehicles are automated and self-driving. They have essentially become personal, employee financed rolling office cubicles — an extension of the cubicle of the centralized, commute in office building where knowledge workers spend two or more hours each workday getting to and from more distant work and home locations. But are they truly necessary? Especially as information and communications technology available now and likely to advance rapidly in the near term makes it possible to perform knowledge work from anywhere as predicted by science fiction writer and futurist Arthur C. Clarke soon after The Jetsons first television season aired?

Leverage ICT for rapid remedy to jobs vs. affordable housing imbalance in metro areas

Posted onLeave a comment

As I look out the window of my California Housing Finance Agency office in downtown Sacramento at 5 p.m. on a Wednesday, I see a lot of cars.Filled with public employees, teachers, nurses and construction workers, the cars aren’t going to nearby homes. They are lining up to jump on the freeway and drive to the distant homes their drivers can afford. These are middle-income, working families who can’t find housing in the region’s most important job center. And this isn’t just a Sacramento problem, it’s a California problem.

Source: Don’t neglect middle class in California’s housing crisis | The Sacramento Bee

Actually it’s not just a California problem. It’s present in many if not most metro areas. It will be an ongoing issue as long as knowledge industry jobs continue to be concentrated in metro centers where housing is costly, forcing knowledge workers to live elsewhere — often more than an hour away over congested highways — where housing is affordable.

Building more affordable housing in metro centers is far easier said than done and can take decades of political and regulatory wrangling. A far faster and less costly and complicated solution is leverage today’s information and communications technology (ICT) to bring knowledge work to the communities where knowledge workers live, working in home or satellite offices or co-working facilities.

Leveraging ICT doesn’t mean there are no infrastructure costs over the long term. The infrastructure for the 21st century is fiber optic cable. Dubbed the “Information Superhighway” by Al Gore, it should be given the same priority and funding as roads and highways were in the 20th, particularly to deploy it to outlying communities with the greatest need for telecommunications infrastructure modernization.

S. F. Bay Area hitting the wall with unaffordable housing, lengthy commutes

Posted onLeave a comment

The September losses, combined with 2,400 job losses reported by the EDD for August, paint an unsettling picture and lend credence to the assessment from a growing number of experts that the Bay Area’s job growth has begun to slow dramatically.

“The slowdown is real,” said Stephen Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy. “There were times this year we thought that job losses here and there were just temporary. But the slowdown is a fact. It’s happening.”

The lack of housing also makes it tough for employees to live near their workplaces, forcing many into lengthy commutes on roads choked with traffic. Some prospective employees decide they’d rather not bother.

“The economy in the Bay Area has pushed up against the physical limits of a lack of housing and a lack of places for workers to live,” said Jeffrey Michael, director of the Stockton-based Center for Business and Policy Research at University of the Pacific.

Source: Bay Area hammered by monthly loss of 4,700 jobs

The San Francisco Bay Area is reaching the limits of time and distance. People will only commute so long and so far before it becomes unfeasible.

The silver lining is the Bay Area is headquarters to many information and communications technology companies that innovated the tools to bridge and time and distance gap and make it possible for knowledge workers to work in the communities where they live — and can find affordable housing — rather than wasting time in needless, traffic choked commutes.