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Hmm, I'm not sure about that - fully autonomous taxis wouldn't be subject to the limitations of human drivers in terms of availability / reliability / endurance. You could ostensibly leave a few taxis around to service otherwise underserved areas and have them run without having to secure a driver each time.

That being said, there is still the cost of maintenance and cleanup, but that can be mitigated (the taxis for five towns could drive to one centralised depot, maintenance can be scheduled to maximise operational time, and eventually all of this can be automated, too)

I don't know if that's how things will work out just yet, but it seems like a possible future based on Waymo's current operational strategy.

3 comments

> You could ostensibly leave a few taxis around to service otherwise underserved areas and have them run without having to secure a driver each time.

I think you’re dramatically overestimating how much of a barrier obtaining a driver is here. The primary cost is opportunity cost of the capital that isn’t being utilized. Not having to have a driver doesn’t somehow make it so you can infinitely provision a fleet.

Theres a bunch of factors that will mess with your intuition here: 1) ride hail demand as significant spikes in usage during morning and evening rush hours AND it has a fairly strong seasonal trend depending on geo. 2) Insurance is also a big expense and for large operations like this is priced per mile or per operating hour, having more deadhead time means a higher loss to insurance. 3) People are very sensitive to wait times AND reliability. The desire to use the service drops a ton when wait times are greater than 10 minutes or if you're consistently not able to find a ride. Could waymo support less dense suburbs now? Maybe at certain off peak hours, but the economics and product experience are difficult.

They won’t have to pay for the driver when idle, but owning cars ties up capital and the fewer rides they do, the longer it takes to pay off. This isn’t specific to cars - all capital equipment works that way. Lower utilization is sometimes unavoidable, but it still means less revenue which can be the difference between a profit and a loss.

How much this matters depends on the price of the car. We don’t know how much a Waymo costs, but they’re probably not cheap.

To be profitable with lower utilization, they’ll need to work on reducing how much each car costs somehow.

> To be profitable with lower utilization, they’ll need to work on reducing how much each car costs somehow.

Definitely. Their custom vehicle had optimizations for cost, but seems to be on hold due to tariffs.

Waymo also has the option to drop prices lower than Uber/Lyft when vehicles are unutilized, though they still need to stay above their per-mile depreciation and operating costs.

> Waymo also has the option to drop prices lower than Uber/Lyft when vehicles are unutilized

I think that’s an unproven assumption.

There’s certainly reason to believe it to be true of course, but uber and Lyft are already capturing upwards of 50% of the fares for each ride, and that’s without the capital costs on their books. Removing the driver from the equation can’t lead to much more than that 50% (realistically much less) margin.

Going from charging $10 to $5 isn’t going to make rides suddenly materialize. Especially in rural areas there are just times that people aren’t going to be looking to go anywhere, and wait time becomes far more of a factor that raw costs.

> There’s certainly reason to believe it to be true of course, but uber and Lyft are already capturing upwards of 50% of the fares for each ride,

That's not true. If you check Uber's Q3 financials, gross bookings for "Mobility" were $21B while revenue was $6.5B. That's way lower than 50%.

> but uber and Lyft are already capturing upwards of 50% of the fares for each ride

I'm not sure if that's an accurate number, but I have seen a lot of complaints from drivers that they're getting a far lower share of the trip revenue than they used to. It's pretty remarkable that in a competitive market where Uber and Lyft are almost perfect substitutes for each other and charge almost exactly the same prices, that they're able to maintain these gross margins.