Unless the humans are losing money by doing so (which may be th case, but probably doesn't make a sustainable business model), the car service is ultimately fully paying for the car for the period it uses it, so it doesn't lose anything by doing so up front. It increases the up front capital requirements, but Google has more cash on hand than the market cap of some Fortune 500 firms, so that's not really an enormous issue for Google.

> It’s much easier to let car owners take the risk of investing in a car, maintaining it, repairing it (for the moment they don’t repair themselves), cleaning up the Saturday night mishaps.

Well, except humans lie about the last bit to get extra reimbursement, whichnpisses off customers. That kind of thing and other driver frauds is a compelling reason to get independent driver-owners out of the loop.

Driverless cars are "always on" so it's not an apt comparison because you're going to always get more from less. Besides, ridesharing is already subsidized right now, so bottom line isn't an issue in the market.

Likewise, ride-sharing with self driving cars is even easier since if you own a self driving car it can work on it's own while you are not using it, which is most of the time. There's no reason a similar asset sharing model won't spring up after economies of scale.

You could also argue that it's cheaper to pay workers with their own textile equipment, rather than spend the CapEx on a weaving loom, yet here we are.

Over 6 years, that comes to $114/day. 1 ride per hour at $5 per ride would hit $120/day.

Assuming a 2 mile ride, that would be 105k miles which is well within the car’s usable life. At 3 miles, it would be 160k miles which is still within a car’s lifespan. It looks like Uber is $1.35/mile with a $2.10 base fare and $1.85 fee. A 3 mile ride should be able to get $5.

Plus, it’s really about the long run. Operating margin might be negative for a bit, but the cost of the technology and manufacturing will come down significantly. Still, even today, I think $250k just isn’t that bad. I think most drivers will do a lot more than $5/hour in gross revenue.

It would be really expensive to make a fleet, but the economics are so compelling, even at high prices. I mean, Americans are often spending $35,000 on a car. If a self-driving vehicle can service the needs of 7 people, it can be cheaper than car ownership.

While the price of driverless tech might be high now, the prices of car ownership and human labor are both very high as well and only one of those three prices is likely to decrease over time.

I don't think anyone is interested in "mak[ing] real money that way right now", they want to get a foothold in, or capture a swath of, a market which definitely will make them money in the future. A tremendous amount if they play it right, even if it means operating at a loss for the next few years.

Right now, rideshare companies keep ~40% of the ride revenue (not including vehicle payments). Which means, 60% goes to the driver. Now if you consider operating costs (fuel/gas/insurance/tolls/oil change/maintenance) at 30% (of the total revenue), there's still the remaining 30% that the driver takes home. Even if you think the driver is working 80 hrs a week, that's not even 50% of the total number of hours an autonomous car can work (24x7 = 168 hrs a week).

With a fully autonomous car, that remaining 30% and lower maintenance costs combined with lower insurance costs will mean probably close to 40% of the current ride revenue will be saved. If you operate the car for 160 hrs a week (8 hrs for fuel/maintenance) then it'll probably be ~60% of ride revenue (at current rideshare rates) that'll be pure profit.

As cost to produce these cars (basically it's the separate technology package added to regular cars) goes down, they can continue to keep the service super affordable while recovering the upfront investment in the $250K car in a few years. Instead of having 10 Chrysler vans on car dealer lots/storage, have one $250K car in service a day after it is manufactured. After that maintenance costs may increase slightly, but the rest is pure profit, which creates a positive feedback loop to

reduce vehicle price --> reduce final fare paid by passenger --> attract more users --> more vehicles needed --> Leads to larger scale production and reduction in price--> repeat.

At some point it'll be cheaper than public transit and then owning and driving a car becomes a need only in regions / places / conditions where autonomous cars wont work. Until then, non-autonomous cars ensure good margin for autonomous cars to thrive.

FWIW, I believe Uber has zero advantage with it's existing fleet. All they have is a large number of indentured drivers (due to subprime loans given to them for their cars). In fact it is a disadvantage for Uber, because as fares for ride share goes down, it starts making lesser sense to operate those cars. they'll just stop making payments and return / trash the vehicle.

When they’re driving around with no safety drivers in Manhattan in the winter, we can talk about solved problems.