This question is not terribly formal in nature, but please bear with me: what I’m looking for is a model of traveling via taxi on a grid of streets where the “metric” in some sense becomes the standard Euclidean metric in a limit, for non-trivial reasons. I’ll elaborate below:
Recall the taxicab metric in the plane, where $d(x, y) = |x_1 - x_2| + |y_2 - y_2|$. I'm interested in looking at restricting this to $\mathbb{Z}^2$, and using that as a basis for a model in which we imagine taxis traveling on actual streets, where we then add complexity to the model (in ways that plausibly model car traffic, though it need not be actually realistic—extreme idealization is okay).
For example, one could imagine that on each lattice point, for each direction there is a $50\%$ chance it is blocked by a red light for $1$ unit of time; perhaps we also let traveling cost $1$ unit of time between lattice points when not stopped by a light. In this model, the expected time to get to two points depends on more than just the taxicab metric; you’d rather be $10$ units north and $10$ units west of your destination than $20$ units north, since in the former case when one of your ways is stopped, you have the choice of making progress in the other direction rather than having to stop and wait. (In fact, even if both ways are open, you want to move in the way that keeps how far you have to move south vs east as “balanced” as possible—I’ve made choices in real life based on this).
As a result of this, the “balls” around where you start are no longer diamond-shaped as in the taxicab metric (of course, we don't really have a metric, but a probabilistic model, where one can think in terms of expected times, and take approximate level sets of this and see the limiting shape: I’m intentionally informal here as I’m open to answers that take this in different directions). In fact, if I recall, I believe this forms an octagon, in some sense!
What I would like is model in the spirit of the above, devised so that the “balls” in some expected sense form a Euclidean circle. That is, for larger $r$, the expected time to move approximately $r$ in any given direction (not just north and south; just look at lattice points near $r$ in some direction) is the same as $r$ goes to infinity.
One reason one might be hopeful such a model exists is because there are examples of things defined on a grid where in the limit, Euclidean symmetry is recovered (see Brownian motion defined as a limit of random walks on a grid as an example of this).
I’m open to various creative things leading to this behavior, such as other cars, weird stoplight systems, etc, though ideally there is some degree of elegance to the model and it doesn’t immediately feel cooked up to give a Euclidean result.
Very interesting question. This is not an answer to your question; just a look into the "stoplight metric" you described.
How should the stoplight metric be defined?
I'll use $d$ to refer to the stoplight metric, and $d_1$ to refer to the standard taxicab metric.
Now let's consider two lattice points $x, y \in \mathbb{Z}^2$. If $x = y$ then of course we must set $d(x,y) = 0$.
Otherwise, there are either one or two lattice points $n \in \mathbb{Z}^2$ such that
We can think of these as "useful neighbors" of $x$ (relative to $y$) – travelling to a useful neighbor gets you closer to $y$, and travelling to a non-useful neighbor gets you farther away from $y$, so we will define $d$ recursively by travelling only to useful neighbors. In the figure below, $x_1$ has only one useful neighbor relative to $y$, while $x_2$ has two useful neighbors relative to $y$.
Let's call the time it takes to travel between adjacent lattice points (with no interference) $\ell$, and the probability that a given direction is blocked $p$. WLOG the time it takes for a light to change/update is $1$.
Then the expected time to go from one lattice point to an adjacent lattice point is $$T := \sum_{n = 0}^\infty p^n(1-p)(n+\ell) = \frac{p+(1-p)\ell}{1-p}.$$
If $x$ has exactly one useful neighbor $x'$ relative to $y$, then the expected time to travel from $x$ to $y$ via useful neighbors must be $$d(x,y) = T + d(x',y).$$
Otherwise, if $x$ has exactly two useful neighbors $x',x''$ relative to $y$, then as soon as we can travel to at least one useful neighbor, we should travel to whichever available neighbor minimizes our expected remaining time to $y$.
Side Note: This strategy might not always be optimal. In some situations (depending on $p$ and $\ell$) it's best to be willing to wait longer for the "better neighbor". This seems to be the case when $\ell < 1$, as reflected in the plots below.
This gives an expected time of \begin{multline*} d(x,y) = \sum_{n=0}^\infty p^{2n}\left((1-p)^2(n+\ell+\min(d(x',y),d(x'',y))) + p(1-p)(n+\ell+d(x',y)) + p(1-p)(n+\ell+d(x'',y))\right)\\ = \frac{(1-p)^2\min(d(x',y),d(x'',y))+p(1-p)(d(x',y) + d(x'',y)) + (1-p^2)\ell + p^2}{1-p^2} \end{multline*}
It's horrible to look at, but this gives a complete recursive definition of $d$. I implemented this definition in Mathematica to produce the following visualizations of the balls of radius $50T$ for various values of $\ell$ and $p$:
Indeed, $p=1/2, \ell=1$ gives an octagon!