What Happens to Cities When Nobody Needs to Park?

Robotaxis are expanding faster than predicted—and the urban economics implications go far beyond transportation

In early 2023, only a thin majority of San Franciscans supported robotaxis. Today, two-thirds favor them. Waymo now operates in ten U.S. cities with plans to add at least a dozen more by end of 2026—including Miami, Washington D.C., Dallas, Denver, and its first international market, London. Tesla has launched limited robotaxi service in Austin. Zoox is offering rides in San Francisco and Las Vegas. The industry that was perpetually “a few years away” is suddenly operating at scale.

The transportation story is obvious: driverless rides that cost about a third more than Uber today, but could eventually become far cheaper without driver wages to pay. What’s less obvious—and arguably more consequential—is what happens to urban real estate, city planning, and local economies when widespread car ownership becomes optional.

The Parking Math

The average American city dedicates about a quarter of its downtown land to parking. Los Angeles County alone had nearly 10 million off-street, non-residential parking spaces as of 2010, covering 200 square miles—an area larger than Denver.

This isn’t market demand. It’s policy. Starting in the 1950s and 1960s, cities mandated minimum parking requirements for every new building: one space per apartment, one spot for every three restaurant seats, one for every 175 square feet of retail. The regulations assumed car ownership would only grow and that parking needed to be supplied, by law, at the point of destination.

The results are visible in every American city: parking lots that dominate downtowns, parking structures that consume the first several floors of residential buildings, surface lots that sit empty 95% of the time but legally cannot be used for anything else.

Robotaxis change this math. If people don’t own cars, they don’t need parking spaces at their destination. They don’t need garages at home. A robotaxi drops them off, drives to its next pickup, and the land that would have been dedicated to storage becomes available for... something else.

The Real Estate Opportunity

Denver recently studied what would happen if it eliminated parking minimums for new construction. The modeling projected a 12.5% increase in multifamily housing production—roughly 460 additional units per year. In August 2025, the Denver City Council eliminated the requirements.

The logic is straightforward. Parking spaces cost $8,000-$50,000 each to build, depending on whether they’re surface or structured, and land values. Those costs get passed to renters and buyers. In Seattle, after parking reform, 60% of new development would not have been possible under old regulations. A study of New York City neighborhoods found that more low-income housing was built in areas where parking requirements were reduced.

This is happening now, before robotaxis are ubiquitous. In Menlo Park, California, three downtown parking lots are being converted to affordable housing. In Philadelphia, a Queen Village surface lot is becoming a 157-unit apartment building. In Portland, a condo development swapped dedicated parking for car-share memberships instead.

But robotaxis accelerate the timeline. If car ownership in cities drops meaningfully—projections range from 35-50% declines in North America and Europe over the next two decades—the land currently devoted to parking becomes dramatically overbuilt. Every parking structure becomes a stranded asset. Every surface lot becomes a redevelopment opportunity.

The Complexity Nobody Wants to Talk About

This sounds like a planning dream: reclaim parking land for housing, offices, parks. Make cities denser, more walkable, more efficient. The reality is messier.

Traffic might get worse before it gets better. Robotaxis don’t eliminate cars—they potentially make car travel more attractive by removing the need to drive. Without congestion pricing, the result could be gridlock as vehicles circle continuously rather than parking. The personal inconvenience of driving currently constrains demand. Robotaxis remove that constraint.

An economist’s solution is straightforward: price traffic. But congestion charges are deeply unpopular in the U.S. New York’s road fee took years of political fighting to implement. Cities may need to frame it differently—”robot taxes” have a different political valence than traditional congestion pricing.

Suburbs may sprawl further. Longer commutes become more tolerable if you can work, sleep, or watch TV during them. Some robotaxi vehicles are already being designed with beds. The pressure on public transit could become severe: why take a bus if a robotaxi is equally cheap and more convenient? Cities could face a “death spiral” where fewer transit riders mean less revenue, worse service, fewer riders, in an accelerating loop.

The transition hits workers hard. The U.S. has about a million taxi and bus drivers and over 3 million truck drivers—roughly 3% of the working population. As robotaxi costs come down, those jobs don’t evolve; they disappear. Personal injury lawyers face reduced demand without car accidents. Auto dealers and used-car salesmen lose customers if people stop buying. The new jobs—fleet managers, depot workers, AI technicians—will hardly make up the losses.

Who Benefits, Who Loses

The distributional effects are uneven in ways that matter for marketers and business planners.

Cities benefit more than suburbs. Dense urban areas with good robotaxi coverage become dramatically more convenient. Suburban and rural areas may never have the population density to support robotaxi networks at competitive prices—car ownership remains necessary.

The elderly and disabled gain mobility. A frequently overlooked benefit: robotaxis provide independence for those who can’t drive. This is a large and growing population as demographics shift.

Young urban professionals are the early adopters. They already rely on rideshare services and are “car-free city dwellers already tired of expensive, unreliable human-driven alternatives,” as one analysis put it. Families with children—about 25% of households—are slower to abandon car ownership; robotaxis can’t guarantee car seats or cleanliness standards.

Real estate values shift. Properties near robotaxi hubs become more valuable. Parking garages become liabilities unless converted. Retail patterns change when destinations don’t need adjacent parking. The businesses that thrived because they had good parking access may find that advantage neutralized.

The Policy Window

Cities have a brief window—perhaps five to ten years—to shape how this transition unfolds. The choices made now about congestion pricing, parking reform, transit investment, and zoning will determine whether robotaxis make cities better or just different.

The optimistic scenario: freed parking land becomes housing and green space; traffic decreases as shared vehicles prove more efficient than individually-owned cars; public transit is supplemented, not replaced, by autonomous shuttles; cities become walkable and bikeable as traffic accidents decline.

The pessimistic scenario: gridlock worsens as induced demand overwhelms road capacity; suburbs sprawl as long commutes become bearable; transit dies a slow death of neglected funding; cities stratify further between those who can afford robotaxi-rich neighborhoods and those stuck in underserved areas.

Neither scenario is inevitable. Both are plausible.

For Business Leaders

If you’re making decisions about real estate, retail location, employee benefits, or customer accessibility, the robotaxi transition changes your calculations.

Location strategy shifts. “Good parking” becomes less important than proximity to where robotaxis operate most efficiently. Downtown and dense urban cores may become relatively more attractive.

Employee commute assumptions change. The cost of getting workers to offices changes—potentially lower if robotaxis become cheaper than car ownership, potentially more variable as service quality differs by geography.

Customer access broadens. Customers who couldn’t drive to your location—the elderly, disabled, car-free young people—become accessible through robotaxi networks. That’s both an opportunity and a mandate to rethink accessibility.

The transition is uneven. Not every city gets robotaxis at the same time. Service quality differs. The patchwork rollout means national strategies need local nuance.

The Honest Timeline

Robotaxis are real and expanding. But “expanding” doesn’t mean “universal” anytime soon. Waymo’s goal of 1 million trips per week by end of 2026 is impressive but still represents a tiny fraction of U.S. transportation. Tesla’s robotaxi service still has humans in the passenger seat. The technology works in some conditions, not all; scaling to every city and weather pattern takes years.

The comparison to the automobile’s impact is instructive. Cars were invented in the 1880s. The car-oriented city—with its arterial roads, parking lots, and suburban sprawl—didn’t reach its full form until decades later. The robotaxi era will similarly unfold over years, with different cities adapting at different speeds.

But the changes are coming. The question isn’t whether to prepare but how quickly to act on the preparation.