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My theory is that we'll see the rise of what the author calls robo-taxi companies e.g. Uber or Google can provide car-as-a-service, for a monthly fee or

1. robo-taxi companies will self-insure. Insurance is just spreading the risk. If you have a fleet of 10.000 cars, self-insurance will be cheaper

2. by "death" he means "significant decline", not "disappearance". A company that buys 10.000 cars has a purchasing power that a single customer doesn't. They can dictate the specs to a car company and they can pit several companies against each other to get the best deal. They can even co-design the cars for their own metrics (e.g. fuel efficiency, reliability, maintainability is super important for someone who has a large fleet).

Car companies will have no choice but to play ball, some of them will go bankrupt and the remaining will service a much smaller market.

3. You assume that self-driving cars need a lot of new regulations. They don't - they just need to be allowed on the road. The rules have already changed in Nevada in California. When the technology is proven, the states will have a hard time justifying not allowing technology that is proven to save a significant number of lives.

4. robo-taxi companies will bring repairs in-house or outsource to existing companies. Again, they'll have upper hand in negotiations due to providing a lot of business and the overall market for repairs will shrink dramatically. Google could bring all their statistics knowledge to predicting what and when will fail and use the past data to improve the parts that fail the most.

5. not sure what you're driving at

6. agreed, probably overstatement on the author's part

Google (or some other robo-taxi company) doesn't have to make their own cars, they'll have enough pricing power to pit multiple car manufacturers against each others to get the best deal, drive down the margins etc., just as Apple does with iPhone parts manufactuers (where Apple gets most of the profit from the phone).

They can self-insure - the liability never goes away but will be manageable from revenues.

As to people who insist on owning a car - most of them will change their mind because of price. If you leave college with $50k in student debt, are you going to spend $10k on a new car + monthly insurance + gas + cost of garage ($100/month in San Francisco if your apartment doesn't already come with it) + hassle of owning a car or will you pay $100/month for much more convenient car-as-a-service deal?

OK, I'll bite on the robo-taxi fleets. The average cab driver makes $10.79 an hour: http://www.bls.gov/ooh/transportation-and-material-moving/ta...

Give a 50% overhead and make the cab driver's cost $15 an hour. I used to pay about $50 for a half hour cab ride from LAX to Westwood, tip and surcharge subtracted, call it $40. I would still find a "no driver" taxi ride for $30 expensive.

The point I am trying to get at is that the economies of traditional taxi companies and future "robo-taxi" companies will not be all that different. Taxi companies will not be repairing cars. They already buy large fleets of cars. Also keep in mind that the taxi industry itself is regulated. Recall Udemey's issues in DC with the taxi lobby.

I do think Google will can be successful in the automotive industry, I just don't buy that they will be doing so by attempting to take down other existing industries. Google is entering a space that is much different than the web or electronic hardware. They have so much trouble breaking into the living room, not sure why you think they will make it to the driveway so quickly.

On (5), I meant a decrease in parking revenue is not necessarily a bad thing for a city. Easier parking also means less barriers to a purchase.

Good luck with this argument. I ran it on an earlier HN thread about the cost of a driver being only a small portion of the cost of a cab. But people don't want to listen. They think because they hand a driver a $50 note, the driver makes all the money.

Taxis cost money because of (a) running costs (b) finance/depreciation costs and (c) regulatory costs. (a) and (b) isn't going anywhere, and (c) certainly is not.

Drivers are only a small part of the picture. Removing them won't dramatically alter costs or availability.

Give a 50% overhead and make the cab driver's cost $15 an hour. I used to pay about $50 for a half hour cab ride from LAX to Westwood, tip and surcharge subtracted, call it $40. I would still find a "no driver" taxi ride for $30 expensive.

OK, now factor in lower insurance premiums...

Now cut the price of the car in half (no front seats, steering column, etc needed)...

Now cut out the pay for the time cabbies spend waiting for calls

Now cut the fleet size by 75% (better utilization due to intelligent routing, cabs never sleep, etc)

I have a feeling there are a bunch more ways this will get a lot cheaper...

>Now cut the price of the car in half (no front seats, steering column, etc needed)...

You're kidding, right? steering column, steering wheel + pedals cost a fraction of the cost of a car. That's assuming they aren't left in there for manual override (parking ,etc).

Front seats? Where are the passengers going to sit? Taking away 1 driver seat will just mean 1 more person capacity, which wouldn't affect revenue because very few cab calls are 1 seat over, resulting in two cabs.

Now that you've saved $500 on the cost of the cab by taking out the steering wheel (or making it removable) now add in the $x,000 worth of sensors.

>Now cut out the pay for the time cabbies spend waiting for calls

At $10/hr, the most you're going to pay for a cabbie sitting around all shift is $120. Which doesn't happen, because cab companies already effectively model utilisation patterns.

>Now cut the fleet size by 75%

Cab fleet size is dictated by peak usage patterns as a function of revenue, not by drivers.

Cabs can be autonomously profitable - many cities have privately owned cabs. The fixed costs of running a cab company are actually quite low in comparison to the marginal costs per cab.

Autonomous cabs can range from one seaters to 15 passenger vans.

You should not compare a 'driverless car' program with a cab program, you should compare them with a car-sharing program (technically driverless!)

In Amsterdam, I use a car-sharing program called car2go. This system uses electric 2-person smart cars.

The cost is €.29/minute (driving) or €.09 (parked), with cheaper rates if you are using for an hour/day. Rates: http://www.car2go.com/amsterdam/en/favourable-fees/

Your 30 minute trip would cost €8.70 ($10.72). This rate includes everything, even insuring the driver, which I presume could get cheaper if these cars were all driverless. Driverless dispatching (instead of me having to find one on my phone and walk to it) could raise the utilization rate, and thus lower costs.

At the moment I believe these cars are given free/discounted parking in Amsterdam to encourage their usage. I can imagine that changing at some point, but I wouldn't factor that into my calculations as it's pretty easy to disrupt parking fees when all of your cars are driverless and highly utilized.

> robo-taxi companies will self-insure. Insurance is just spreading the risk. If you have a fleet of 10.000 cars, self-insurance will be cheaper

I can attest that Zipcar, in fact, already seems to do this. Insurance and gas are included with the hourly rental fee. In fact, just get rid of having to drive the damn thing and Zipcar already has the whole business model down....

Having discussed this with friends, a fair number of people just want their own car that they drive.

I've encountered the same reaction, and I believe it is widespread. But here's the thing: even the people who insist on owning and driving their own cars, and refuse to let it drive them, can still benefit greatly from owning a self-driving car.

Imagine never having to park - you just get out of your car in front of your destination and it goes and finds a parking spot.

Imagine never having to get someone to drop you off at the airport. Your car can just go home afterwards.

Imagine getting your oil changed or other maintenance. The car can do this on its own when you don't need it.

I believe that we'll see a lot of marketing geared towards the people who would never let a car drive them around. This will be a great stepping-stone to help convince these people that it's safe. They'll get it for the convenience, but then eventually one day they'll use it when they're drunk or tired. Eventually, they'll learn to trust it.

I totally agree. My point is that Google has the potential to become part of the value chain - not replace it.

I think it's an underrated step between self-driving cars and cars that drive unoccupied, as in your example of cars that go park themselves. Adverse weather conditions, mechanical failure, a simple flat tire -- if something goes wrong with a car, we expect the owner to be there to deal with the problem.

That's not to say that the problem can't be solved, but my guess is that it will take time and culture changes to adapt to these cars before people have the kind of comfort level to allow empty cars to roam around.

For mechanical failures, such as flat tires, the car could just pull to the side of the road and fire off a text message to you and AAA (maybe we require you to have something like a AAA membership if you want your car to drive itself). They come and fix the tire, tow you to an auto shop, or whatever needs to be done. You're inconvenienced, but certainly no more than you would be otherwise.

As for cultural changes, here's what I imagine will happen: At first, people will be uncomfortable with self-driving cars. As another commenter noted, people don't feel safe with things they don't control. But most users of the cars will need very little time to get used to it. They'll hop in their car, tell it where to go, and proceed to pay no attention at all to what the car is doing. Once enough people have had this experience, it won't be difficult to convince the public to allow the cars to strike out on their own.

Well, not everyone will see it this way. My example:

> Imagine never having to park

I like knowing where I parked. Further, we have something called valley parking, in most places that I would want to get off for a while.

But besides, in crowded cities, how do you actually imagine that? Most car owners in the NYC take subway to go downtown, because it would either take 2 hours to find a parking spot, or it would be very far from initial destination. With AC, I can imagine people just getting off at their destination (right in front of the door) and won't give a damn what their car will do in the meanwhile until they are back in 45 minute. So you will have jam packed streets with empty cars driving around waiting for their masters to come back -- total horror on the streets! Otherwise - what? Have the car to drive back home empty and come back in 45 minutes?? That putting even more traffic on the street and more pollution.

> Imagine never having to get someone to drop you off at the airport. Your car can just go home afterwards. Sure, or I can take a cab which will be the same result - I will get to the airport after all. The only difference, I can have one or two to relax at home with wife, before the flight.

> Imagine getting your oil changed or other maintenance. The car can do this on its own when you don't need it.

Yes, so I am even more disconnected from the real world. Instead of making a Saturday trip to change an oil and chat with mechanics about good old days, about whether, girls, beer, or whatever it is, I am sure better staying home to chat on Facebook, while my car gets oil change on its own...

> I believe that we'll see a lot of marketing geared towards the people who would never let a car drive them around.

Probably not. I would guess all makers will jump ship quickly. There will be money to spend on advertising new technology, not the old one.

> This will be a great stepping-stone to help convince these people that it's safe.

If its going to be safe, noone will need to be convinced. I am sure, even reading this thread, you will find enough initial adopters for them to pass the word to the masses how safe AC really are.

Instead of making a Saturday trip to change an oil and chat with mechanics about good old days, about whether, girls, beer, or whatever it is, I am sure better staying home to chat on Facebook, while my car gets oil change on its own.

If that's how you prefer it, that's fine. But all my mechanic ever chats with me about is about how much I need his $49.99 radiator purge. It's not how I want to spend my time.

If its going to be safe, noone will need to be convinced.

Many people have an innate fear of things they can't control. Think about all the people who fear flying on commercial airliners -- quoting them a statistic about its safety doesn't make their fear go away. There will need to be a lot of convincing.

I like knowing where I parked. Further, we have something called valley parking, in most places that I would want to get off for a while.

You wouldn't need to know where you parked: a quick text message retrieves your car.

I will get to the airport after all. The only difference, I can have one or two to relax at home with wife, before the flight. The end result for the self-driving car is identical to the cab case, you can still have your drinks because you will not be driving the car. However, removing the cabbie from the equation will cut costs dramatically.

Will you allow your car to decide what a fair price for parking is?

Again -- where all those cars will be parked, knowing before I would either take a cab, or take a public transportation?

Will we get millions of parkings underground built the same time AC hit the streets? Dont think so.

Further, you saying that removing cabbie will cut the cost. Hmm.. my take is that it is the city that makes the most money out of cabbies. I can bet my left arm (Im lefty) that if the city will realize they losing large chunk of money due to AC driving everywhere, I am sure they will smack you with such an AC ride tax that taxis will become again a reasonable alternative!

1) You would still need some form of insurance. It's still possible for a human operator/owner to negligently cause accidents. (e.g. poor maintenance, chair strapped to the roof falling off at 65mph).

However, if premiums become low enough, car insurance policy might even be offered as an add-on to homeowner's or renter's insurance.

4) I think cars will evolve (or devolve) to require less maintenance, and more self-diagnosing.

5) If there are a lot of autonomous cars, owners can simply walk away from their cars, and the cars will coordinate amongst themselves to part in designated spots.

6) You know what bogs down city courts? People fighting traffic and parking tickets.

4) This has nothing to do with Google and more to do with auto manufacturers. I don't think the problem is that people can't drive their cars to the auto shop.

5) Agreed. Also better traffic flow if you can get the cars to work together.

6) You're probably right about city courts. I'd also love to see cops focusing on actual police work rather than waiting for people to run a stop sign. But we have traffic courts that handle these sort of things - we have assigned separate agencies to take care of it. It's hard to argue though that we have somehow failed to prosecute actual crime due to traffic and parking tickets - there are probably problems more severe that have caused that.

The author also is very naive when he says "no more bus drivers, taxi drivers, limo drivers". It may happen eventually, but not before a few decades. There are a lot of power struggles and political interests that will make this happen in a very very long time frame. Most probably, it will happen as it happens today with lots of aircraft's. While they can do lots of things autonomously, there must be a human to takes certain decisions and as a backup.

What I can see instead, is lots of truck drivers watching TV or just sleeping at the steering wheel, while their trucks do the job.

Bus drivers and those represented by unions and assciations will take a while to be eliminated from being necessary.

It hasn't been necessary to have train operartors/conductors for a few decades but they persist, despite trains being by their nature of prescribed, unchanging, predictable routes with preditable stops, prime candidates for automation. Monorails, for some reason are an exception.

One reason is that trains are hugely more efficient in terms of passengers carried per operator:

On a bus carrying 50 people, the driver is a much more significant portion of the cost than a driver and a conductor on a train carrying 2000 people.

So even though it's much easier to automate a train, there's less incentive to do so, and doing so still requires investment. It'll slowly happen anyway, of course, but there's no real rush.

1) There will still be insurance but it will get negligibly cheap if these cars are as safe as we think.

Re: 3, he didn't say mechanics would go away, just auto body/collision shops.