Waymo estimates about 50 trips per day will be served per vehicle. At that rate, 80k robotaxis is enough to displace most of the taxi/rideshare services in the southwestern United States, though I'm not expecting to see all of them on the roads until 2022 or so. Waymo has a ton of work ahead of them. Mapping and validating in the ~100 square mile area of Chandler has taken them about 18 months so far, and supposedly they are on the verge of a commercial launch. Every city they hope to deploy in has differing signage, differing driving habits, and many funky intersections and road anomalies that need specific attention.
Why?
I see comments like this constantly. But does anyone ever do even a basic spreadsheet to explain the unit economics of this argument?
Low skilled people who can drive are pretty cheap and plentiful. Even if self-driving tech is flawless (spoiler: it's not and won't be soon) it still only replaces part of their responsibilities. Someone will still have to clean the cars for example. Presumably there will be some required level of human monitoring, etc.
Conversely, capital and highly reliable technology isn't free. You can calculate pretty easily the rate at which it's profitable to substitute technology for labor, this is a trade-off we've literally been making for centuries.
One one side you have plentiful cheap low skilled labor. On the other you have lasers, fast computers, graphics cards, cameras, and the associated programming inspection and maintenance costs.
Why do we think the latter side is going to be cheaper in anything remotely like the near term?
A truck still needs to be able to drive in cities, and if you figure out how to automate all the other thing a trucker does you can replace 3 million of them. Big whoop. Robotaxis stand to challenge the economics of personal vehicle ownership, the potential market is many orders of magnitude larger.
That's plausible and incremental. No cleaning problems, no homeless people living in them, no need for remote monitoring, a far simpler liability and insurance situation, and so on.
My assumption is we'll start talking seriously about robotaxis on the day this scenario is practical and battle tested. The idea of starting with taxis seems ludicrous in comparison.
These are all solved problems, I mean when was the last time you saw a homeless person camped out in a Zip Car? BMW's ReachNow vehicles are all over Seattle and they are clean, insured, fueled/charged and exactly 0 people live in them.
I have yet to hear a compelling reason why I would give up my car, and if I did why public transit isn't a better option.
Yes, that cost will be offset by the cost of the extra hardware, but that can be amortized over tens (possibly hundreds) of thousands of miles. Likewise, the investment in software (programmers) will eat into profits, but once again, you can spread that cost out over hundreds of thousands or millions of cars. Besides, an awful lot of the latter is a sunk cost at this point.
Because, other than inspection and maintenance costs, everything on your list has been getting much cheaper really quickly for a long time.
A company deploying large mostly-homogenous autonomous fleets may be able to benefit from:
- we probably don't need to tip AVs
- economies of scale on obtaining vehicles, fuel, maintenance, and cleaning
- tuning maintenance/cleaning schedules across a fleet towards keeping vehicles in service for longer
- may be able to perform cleaning/maintenance during off-hours, vs owners who'll often have to trade
working hours to do these tasks
- autonomous systems may drive (and be tuned towards) in ways that also help preserve long-term vehicle
value and minimize costs
- lower insurance, legal, and PR costs if they outperform human drivers, don't molest/murder
passengers, etc.
- minimizing costs around acquiring and managing a human workforce
- there are probably many small ways to optimize the positioning and functioning of an AV fleet that
just won't work with a large contractor fleet
To give an example, my favorite coffee shop is about 7 minutes (+wait) from my apartment by car either way, and around 18-26 minutes (+wait) by bus (shorter there, longer back). Without a ride pass and with tip, it's probably around $7-8 to Uber this one way, vs. $1.25 for the bus.
At this price, I'll usually only Uber if heat or rain make getting to and from the bus miserable. I have a ride pass atm that knocks this down to around $6-7 with tip, which makes me marginally more likely to take Uber, but it isn't my default. I took the bus this past Sunday morning, planning to get some open source work done, but I'd forgotten my laptop wasn't in my bag. The time/sweat cost of the bus round trip and the money cost of the Uber round trip were high enough that I just sat and read a book instead.
I'm not sure exactly where, but somewhere between ~$2-5 total, I'd probably default to taking Uber both ways. Down at the low end of that range, I even would've gone back for the forgotten laptop.
That's a weird thought to have. Humans need on the order of ~15K a year in the US. On the other hand, even an ultra high end SDC computer costs only around ~12K in production and much, much less to actually make since Waymo will no doubt use their own TPUs. Lasers are cheap, compact and efficient fiber lasers. Cameras are mass produced in immense volume and are dirt cheap for very high quality. The only other factor is software development costs which is mostly a fixed cost.
Rental car companies show how few people it takes to maintain a very large fleet of vehicles and it will take even fewer if they can drive themselves (an autonomous car can go through a wash on its own, charge itself, show up at a detailing station on demand, etc).
Does that number reflect an analysis of the cost of the actual human work of driving the car only, or is that just the number for average actual remittances from Uber to the driver?
If so it includes assumption of capital risks, auto depreciation, gas, tire wear, broken glass, vandalism and cleaning, traffic tickets, maintenance, towing, and every other expense of physically delivering the ride.
Getting rid of the human driver only saves real money on driving labor. The payments to drivers have much more to them.
The number of hours per day the car needs cleaning will be drastically lower than the hours it needs driving.
The very fact that those things do need specific attention tells me they don't have true autonomy yet; they just have a way to fake it using detailed maps of known areas.
I don't see how an autonomous vehicle can handle all the corner cases of real-world driving (construction zones, etc.) until it can also work reliably using only available sensor data, so that detailed mapping is no longer necessary.
Which must be worrisome for competition.
Google is buying a couple thousand Pacificas in the near future. That's it. It's more or less a commitment to keep buying a couple thousand a year for the next however-many years, in exchange for a discount.
It is NOT the case that Google is going to open a big box and find 62,000 vehicles inside in late 2018.
[1]: https://en.wikipedia.org/wiki/Alphabet_Inc.
[2]: https://en.wikipedia.org/wiki/Automotive_industry#By_year
[3] https://www.dmv.ca.gov/portal/wcm/connect/5aa16cd3-39a5-402f...
Specifically, this section:
"According to the filing, Google and Motorola began discussions about Motorola's patent portfolio in early July, as well as the "intellectual property litigation and the potential impact of such litigation on the Android ecosystem".
Although the two companies discussed the possibility of an acquisition after the initial contact by Mr. Rubin, it was only after Motorola pushed back on the idea of patent sale that the acquisition talks picked up steam.
The turning point came during a meeting on July 6. At the meeting, Motorola CEO Sanjay Jha discussed the protection of the Android ecosystem with Google senior vice president Nikesh Arora, and during that talk Jha told Arora that "it could be problematic for Motorola Mobility to continue to exist as a stand-alone entity if it sold a large portion of its patent portfolio".
In connection with these discussions, the two companies signed a confidentiality and non-disclosure agreement that allowed Google to do due diligence on the company's patent portfolio."
While some have projected how many traditional vehicles they can displace, I don't think anyone really knows how that'll play out. I doubt any of these companies will go making bets that obviously rival the scale of traditional vehicle sales/ownership at the time they're made, especially before they get a sense of how reliable AV transit affects the decisions individuals make about car ownership as they face major maintenance, repairs, and replacement.
I've read one projection that says each could replace 10 traditional vehicles. If that worked out, it seems like a bet on 10m vehicles, enough to replace all 100m sold worldwide, would be astonishingly bold. If you assumed an initial scope of the entire US, the equivalent bold bet would be 1.7m vehicles. If you reduced the scope to California, that bet would be about 200k vehicles. If we guess that the difference between "astonishingly bold" and "bold" is an order of magnitude, these would be reduced to 1m, 170k, and 20k...