Will Drive-Thrus Exist in a Self-Driving World?

From practical innovations to large-scale advancements, there’s no doubt that technology has left a seismic imprint on our culture. And with 2018 already in full swing, our cyclical co-dependence on it only continues to grow.

Self-driving cars, for instance, are a rapidly evolving technology, which up until recently, were thought to be the stuff of science fiction and definitely not something that would abound in the foreseeable future.

In a relatively short span of time, autonomous driving has gone from “possibility” to “definite possibility” to “how could anyone ever think this wasn’t a possibility?”

Cars that drive themselves can now be found in all corners of the globe, from California to China and everywhere in between.

But, as with any great invention, this new age automotive gold rush comes with quite the learning curve, particularly regarding the commercial real estate sector.

One new challenge on our radar- Will the implementation of self-driving cars negate the special planning needed to develop drive-thrus in a commercial space or property?

Pros and Cons of Drive-Thrus in Commercial Real Estate

Investors are privy to participating in QSR (quick-service restaurant) investment ventures because they tend to be more affordable, indicate more signs of growth than formal dining restaurants, have recognizable brand names and can be easily examined by those who aren’t necessarily seasoned commercial real estate investors.

And the current cost climate has encouraged both corporations and franchisees alike to harness the full potential of their owned real estate. For 1031 exchange investors, the price point, coupled with a long-term lease, rental escalations and identifiable brand names, makes these QSR properties the ideal investment for a new real estate professional.

While these drive-thru QSR establishments present opportunity for new revenue streams for a real estate investor, they also pose a variety of interesting challenges. Developers in San Diego, for example, must abide by certain regulations concerning parking, flow of traffic, pedestrian areas, litter, etc.

It also requires enough space for five-car leeway in the drive-thru at one time, which can be a nightmare for those looking to maximize valuable square footage.

With the inevitable emergence of autonomous vehicles into mainstream society, these commercial real estate admonitions for drive-thrus need to be heavily considered when looking to invest in retail space today.

When Drivers No Longer Have to Watch the Road

Self-driving cars are capable of navigating the open road without driver intervention, allowing you to concentrate on other things while en route from point A to point B.

This puts drive-thrus at an advantage, as they will be offering the same benefit of quick, on-the-go foods, but with none of the hassles that come with eating while driving, or the accidents for that matter.

Proponents of the self-driving car phenomenon speculate that, in our already app-obsessed world, the process of ordering and picking up your food at the window would become more streamlined.

In theory, your car's computer could be integrated with an app, in which you can order, pay in advance, and drive up to the drive-thru window at your convenience.

However, this opportunity could be disrupted by the competition of delivery to replace drive-thrus. Although consumers are arguably busier and more distracted than ever before, trends are indicating that most people are moving more towards an metropolitan, walkability-focused lifestyle.

Due to telecommuting, improved public transportation, and maybe even environment consciousness becoming more of a social norm, people just aren’t driving as much as they used to.

Historically, fast food chains earned between 50 to 70 percent of their revenue from drive-thrus. But, with more and more people migrating to major urban centers, the success of suburban fast food drive-thrus may be waning. In addition, the attitudes of Millennials are shifting towards casual brands and away from big name brands, like McDonald’s, whose sales have stalled, leading to more questions about the feasability of fast food chain drive-thrus.

What This Means for Commercial Real Estate

Regardless of the number of people who will actually utilize self-driving vehicles in the future, people’s growing need for easy access will always remain at the forefront. The process of ordering convenient food will undoubtedly become more efficient, and may possibly result in the introduction of new laws surrounding drive-thru ordinances and QSR commercial space requirements.

Full-scale commercial adoption of autonomous cars is still nearly a generation away. But, if and when it becomes the standard, it’s likely that commercial lots would end up requiring less drive thru zoning, possibly opening the way to more square footage for either larger buildings or more parking space for delivery drivers. 

The real estate landscape is restructuring once again and investors are rightfully redrawing their maps to succeed in the soon-to-be driverless world. With the imminent global commercialization of these vehicles will come a deep-seated and permanent structural change to the way we interact with real estate-transforming how we live, how we work, and how we commute to our favorite fast food franchise. 

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Topics: real estate investing