We're starting to see professional reports echoing long-standing concerns about how driverless cars will affect our cities. This new one from KPMG, in particular, is getting a lot of press. It's actually a focus group study about the transport desires of different generations, but it confirms the thought experiments that many of us have already been laying out for a while.

Much depends on whether these cars are owned or spontaneously hired like taxis, Uber, and Lyft. A taxi model is definitely better in its congestion impacts, but that doesn't mean it will happen. The ownership model is closer to the status quo, and the status quo always has enormous power. Driverless taxis will not always be available on demand, especially in suburban and rural areas, so a legitimate fear of being stranded will make people in those areas prefer the security of having a car just for them. And of course, that's just the effect of rational concerns about relying on taxis. Less rational desires for car ownership, as an expression of identity or symbol of liberty, will also not vanish overnight.

This leads to a nightmare scenario that University of Washington's Mark Hollenbeck laid out in our recent Seattle Times panel. Paraphrasing Mark: A suburban father rides his driverless car to work, maybe dropping his daughter off at school. But rather than park the car downtown, he simply tells it to drive back home to his house in the suburbs. During the day, it runs some other errands for his family. At 3 pm, it goes to the school to bring his daughter home or chauffeur her to after-school activities. Then it's time for it to drive back into the city to pick up Dad from work. But then, on a lark, Dad decides to go shopping at a downtown department store after work, so he tells his car to just circle the block for an hour while he shops, before finally hailing it to go home.

This is really easy and obvious behavior for a driverless car owner. It reduces the number of cars someone needs to own, and reduces pressure on inner city parking, but would cause an explosive growth in vehicle trips, and thus in congestion (not to mention emissions and other impacts). Just the commute behavior doubles car volumes, because the car now makes a two-way trip for each direction of the commute, instead of just one. And if everyone shopping downtown has a car circling the block waiting for them, well, that level of congestion will far exceed what's generated by cars circling for parking today. It could pretty well shut down the city.

This is the good old problem of induced demand, which is what happens when you make a resource available at an artificially low price – as we do with most urban roads today. If you don't pay the true cost of something in money, you will pay it in time, and that's what congestion is. (It's also why in the old Soviet Union, people spent hours waiting to buy bread: Soviet price controls made the price too low to compensate the suppliers, so there wasn't enough bread, so everyone waited in line. Congestion — waiting in line to use an underpriced road — works the same way.)

Pricing of some kind will be the solution, but we tend to do this only when things get really bad. Notice how bad congestion has to be today before solutions like toll lanes and transit lanes are finally accepted as necessary.

As always, the very worst scenario won't happen, but some really bad ones still can. If the economic functioning of downtown is too badly impaired by driverless cars circling the block waiting for their owners, the government will intervene to save the economy, as it always does, probably with some kind of downtown street pricing on the London or Singapore model. But this only happens when congestion threatens the economy. That's a very high bar. Long before that point, congestion will be bad enough to be ruining people's lives, wrecking the urban environment, strangling public transit, worsening climate change, and so on.

As always, the scary thing about congestion is how bad people (and therefore governments) allow it to get before they start making different choices to avoid it. The level of congestion we (justifiably) complain about is much lower than the level that we choose to tolerate, and this is the real reason for pessimism about how bad congestion could potentially get, if driverless car ownership — like cars today — are so massively underpriced even in the context of high urban demand.