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Comment by iamleppert | Hacker News Reader

Can anyone explain the business model of a self-driving car company? We already have this service, except it’s powered by humans. Humans who own the cars, store the cars, clean them, and take care of all the maintenance.

A self-driving car company will have to own a huge depreciating asset, and they’ll still need staff to clean & take care of the cars in addition to an enormously expensive engineering team and/or licensing payments.

What business model are these companies trying to fulfill? It seems like they are trying to solve a problem that doesn’t exist.

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Except self driving trucks can drive 24/7 and never take a break. You’ve seen those truck stops where there’s 30-40 trucks sitting idle while their drivers are sleeping and on mandated breaks? Wasteful.

If all cars are self driving we can eliminate red lights and traffic signals because of machine coordination.

Better utilisation of cars will lead to a 5x to 10x decrease in traffic, and route planning algorithms will optimise pickups and simultaneous package delivery.

Your car can go and ferry people around rather than sit idle taking up parking spaces while you’re at work (copy paste this for 200,000 workers in the city) and make you money

The car can go fuel and charge itself and drive itself to servicing and cleaning.

Other than the trucking example, none of those are business models for self driving car companies.

The trucking model is profitable enough. Truck drivers is literally the most common job in the US.

And what if the ferrying people around part is a revenue share between the self driving car company and the car owner?

( Working in the field. This is obviously not my employer’s opinion. ) Don’t think about your own personal car. Don’t even think about a taxi fleet. Think about all the large company who has to truck goods to their locations, like all store chains for example. They have to maintain a huge fleet of vehicles and a small army of drivers. They already have a maintenance center where a different small army is fixing and cleaning the trucks. If you have a working self driving system you can replace the army of drivers with it as long as the cost of the self driving system is lower than the wages you pay the drivers. This of course puts a cost limit on the viability of the self driving system. If you need 10 Phds per car to keep them rolling then you lost and nobody is going to use your system. On the other hand self driving companies bet is that through smartness they can make it so that they only have to employ a handfull of people per thousands of trucks driven. If that bet works out then the system is financially viable. If it is viable the self driving company can capture a portion of the difference between the drivers wage and the barebones cost of running the system in perpetuity.

Uber's drivers represent 40% of the cost per ride to Uber.

A more efficient service (algorithmic operation) which costs 40% less seems to be a no brainer.

A lot of the Tesla robotaxi fleet would be people that still own the cars but just deploy it to the fleet to make money for them.

But why do they have to make profit? Original founders already cashed out, current management and top employees will most likely cash out in the private round.

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