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Will Transurban Group (ASX:TCL) be disrupted by autonomous transport? 

Most of you will have seen the recent news story detailing Uber’s plans to begin testing its ‘air taxi’ service. 

In case you missed it, Uber’s reps are in Australia to speak with politicians about trialling the new UberAir concept – where commuters can travel from point-to-point in what’s been described as a flying taxi – possibly as soon as 2020.

Sydney and Melbourne are the two cities tipped to be in the running for the trial, due to the higher population density and heavy traffic. 

The aircraft is essentially like a large drone, which will take-off and land on ‘skyports’ around the city, which Uber plans to build. The company says it will cut commuting times down drastically and although the aircrafts will be piloted initially, Uber plans to move to fully-autonomous trips later on.   

Taking a trip will cost the same as a luxury Uber does today, with the price being lowered to match a standard Uber trip as the new concept gains traction and passenger numbers grow. 

It’s all very exciting, but how will this affect our giant toll-road operator, Transurban? 

Given this concept hasn’t even begun yet, it’s a little early to call it. But just humour me for a minute… 

There’s no question this concept will appeal to some. The hatred of congestion and peak-hour traffic is surely one thing we all have in common. 

I’m of the opinion that this type of autonomous transport looks something of an inevitability.

Given the potential for transport to be provided safer than humans can do it manually, and the cost-reduction from removing the driver/pilot, I think the numbers will be too good to resist for most of us.

Especially since future vehicles will be electric and powered by solar, my view is the cost of transport will plummet. 

Most of us will still be using the roads for a good while yet. And the fastest option – the toll road – in most cases in our big cities is worth paying up for. UberAir and its competitors will definitely take some traffic off the road, but by the time they do, traffic levels and toll prices will be at higher levels, likely negating much of the lost revenue for Transurban.  

Foolish takeaway  

I think this concept will very slowly erode Transurban’s moat over time. That said, this concept will probably take a while to gain real traction and we’ll continue to be mostly road-commuters 10 years from now. As a Transurban shareholder, I still expect the company will be collecting more tolls in the future than it is today, and paying higher dividends as a result.

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Motley Fool contributor Dave Gow owns shares of Transurban Group. The Motley Fool Australia owns shares of and has recommended Transurban Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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