Autonomous murderbot tries to drive through Chinese New Year street party, gets whole entire ass handed to it. straphanger: Now, if I were AI, I might get the feeling that humans don't think you're particularly welcome on those streets. Just sayin'...
Because normal taxis are extremely expensive, and provide poor coverage in many areas. It would cost me over $30 to take a taxi to the nearest grocery store and back. It would cost me over $80 return from my house to the middle of the nearest town large enough to have a Walmart. The taxis also only operate during daytime hours in my area.
Because they don’t require a human worker, which by far is the most expensive and challenging part of running a taxi service. The operating cost per hour is super low.
Robotaxis only need downtime for charging and regular maintenance, probably only 2-3 hours per day in total.
If the operating cost is as low as you said, why do you think these robotaxi companies wouldn’t eventually charge similar fare to normal taxis given that (1) the market can bear such fare now and (2) the reduced operating cost would give them higher profit margins?
Frankly, I’m not convinced yet that the operating cost is that much lower. Covering more areas and operating almost 24 hours a day sound like more fleet and more frequent maintenance to me. Wouldn’t these increase the operating cost, and thus, fare? Not to mention paying the engineers to maintain the software/AI system. I assume engineers are much more expensive than drivers.
What you’re suggesting in the first paragraph is price fixing, and because there are multiple companies it would require collusion to pull off. Not saying it doesn’t happen, but generally speaking in capitalism competition will push prices down. That’s why buying a TV is so cheap, and why you can get bananas for almost nothing still. Most products prices are pushed down by competition from multiple companies.
The robo-taxis themselves probably cost on the order of $100,000 at the moment, due to all the extra computers and sensors and stuff on top of a standard EV. Spread out over their expected lifetime of say 5 years at 20 hours per day, that’s only $2.70 per hour.
They’re electric, so there’s that cost too, lets say they drive their maximum charge per day (400km) which is actually quite high for a taxi, that adds about $20 per day in electricity costs, or another $1 per hour.
Maintenance on electric cars is almost non-existent, you pretty much just need to rotate and replace the tires and change the cabin filter. This isn’t insignificant, you’d change the tires every 100 days or so with that much driving, but you’re talking about $5 per day, or $0.25 per hour. That’s literally my entire warranty work for my EV. There simply aren’t as many parts to wear or break as in a gas vehicle.
There will of course be other costs like regular cleaning, and fixing the upholstery from wear by patrons, I can’t estimate that, but I suspect it’s not a huge amount.
Plus insurance, also cheap per hour when you’re operating that much.
So the total operating cost for a robotaxi per hour is around $4-5.
Even the cheapest taxi driver is going to be making what $15-20 per hour (with tips), in some cities it’s double that.
So the cost to the company for running is going to be 75-80% less with a robotaxi fleet.
The price per hour for robotaxi’s will also continue dropping, as EV battery costs come down and the self-driving technology matures they will be able to produce these at scale and go from a $100,000 current price to probably $50,000 over the next decade. The price of labour is going to keep going up though.
These big companies investing in self-driving systems are spending billions because they know how much money will be made on them. My wife and I pay about $300/month to have a second vehicle that we use only 5-6 times in that period. If I could have access to a $10 per trip robotaxi it would make far more sense to drop that second vehicle and use those services for the odd times I need it.
I agree with what you said about price fixing and competition. But why do you think multiple robotaxi companies will survive in the (long) future? We know that’s not what happened with Uber/Airbnb that killed their competitors with predatory pricing. How do you know this time it would be different?
Thanks for the detailed cost breakdown. You seem to have thought about this deeply. But I don’t see labour cost (e.g., engineers) in the breakdown. Why did you not include it?
I agree that the battery cost (and thus operating cost) would go down, but again I’m not convinced it would mean lower fare because that’s not what usually happens. I also agree these companies know how much money will be made on self-driving systems, which is exactly why I think they would aim for a monopoly, and the one surviving would charge passengers as high as it can.
In you and your wife’s case, is using a normal taxi 5-6 times not cheaper than the second vehicle cost?
Anyway, from what you wrote, it seems the biggest issue here is cost/fare. In that case, public transit, which we already have and benefits all people (including both the elderly and people with disabilities), would be a better solution than any taxi.
There are three ridesharing companies in the city I live near, plus regular taxis. Is there an example of a region that only has Uber that you can think of? Airbnb also has competition from VRBO and local hotels keeping nightly prices down.
The engineering to design the product is built into the cost of the vehicle, it gets amortized over a massive number of units over many years and therefore doesn’t need to be included in back of the napkin calculations like this.
I’m pretty sure that the government in my country (Canada) would destroy a self-driving car monopoly before it could establish itself. The EU probably would too. They would likely mandate the company license it’s tech to other manufactures at government set rates like they do currently with a few other industries like Cellphone networks. That being said, there are already more than a half-dozen big name companies working on it, I highly doubt only one will succeed.
I live in an area very poorly served by Taxis, since I’m about a half hour (on a highway) outside of the city. We only have 2 taxis (total vehicles, not companies) in the community that only operate during daytime hours and a ride into the city is about $50 one way. $300 doesn’t go very far when a return trip is $100+ tip. The bus into town only runs twice in the morning and twice back out in the afternoon and if your destination isn’t directly on the main route it can take 2+ hours to get to a specific location in the city.
Self-driving busses would be great too, they would increase access in many areas reducing the need for cars. They are the exact same tech though there’s almost no difference between driving a car or a bus from a machine learning perspective. The decrease in costs would be less though, since busses are much more capital intensive compared to their labour cost. They may only save 30-40% of costs by eliminating the drivers. Busses also operate at much higher utilization rates already.
Because normal taxis are extremely expensive, and provide poor coverage in many areas. It would cost me over $30 to take a taxi to the nearest grocery store and back. It would cost me over $80 return from my house to the middle of the nearest town large enough to have a Walmart. The taxis also only operate during daytime hours in my area.
And how do you think robotaxis address all these issues (high fare, poor coverage, limited operating hours)?
Because they don’t require a human worker, which by far is the most expensive and challenging part of running a taxi service. The operating cost per hour is super low.
Robotaxis only need downtime for charging and regular maintenance, probably only 2-3 hours per day in total.
If the operating cost is as low as you said, why do you think these robotaxi companies wouldn’t eventually charge similar fare to normal taxis given that (1) the market can bear such fare now and (2) the reduced operating cost would give them higher profit margins?
Frankly, I’m not convinced yet that the operating cost is that much lower. Covering more areas and operating almost 24 hours a day sound like more fleet and more frequent maintenance to me. Wouldn’t these increase the operating cost, and thus, fare? Not to mention paying the engineers to maintain the software/AI system. I assume engineers are much more expensive than drivers.
What you’re suggesting in the first paragraph is price fixing, and because there are multiple companies it would require collusion to pull off. Not saying it doesn’t happen, but generally speaking in capitalism competition will push prices down. That’s why buying a TV is so cheap, and why you can get bananas for almost nothing still. Most products prices are pushed down by competition from multiple companies.
The robo-taxis themselves probably cost on the order of $100,000 at the moment, due to all the extra computers and sensors and stuff on top of a standard EV. Spread out over their expected lifetime of say 5 years at 20 hours per day, that’s only $2.70 per hour.
They’re electric, so there’s that cost too, lets say they drive their maximum charge per day (400km) which is actually quite high for a taxi, that adds about $20 per day in electricity costs, or another $1 per hour.
Maintenance on electric cars is almost non-existent, you pretty much just need to rotate and replace the tires and change the cabin filter. This isn’t insignificant, you’d change the tires every 100 days or so with that much driving, but you’re talking about $5 per day, or $0.25 per hour. That’s literally my entire warranty work for my EV. There simply aren’t as many parts to wear or break as in a gas vehicle.
There will of course be other costs like regular cleaning, and fixing the upholstery from wear by patrons, I can’t estimate that, but I suspect it’s not a huge amount. Plus insurance, also cheap per hour when you’re operating that much.
So the total operating cost for a robotaxi per hour is around $4-5.
Even the cheapest taxi driver is going to be making what $15-20 per hour (with tips), in some cities it’s double that.
So the cost to the company for running is going to be 75-80% less with a robotaxi fleet.
The price per hour for robotaxi’s will also continue dropping, as EV battery costs come down and the self-driving technology matures they will be able to produce these at scale and go from a $100,000 current price to probably $50,000 over the next decade. The price of labour is going to keep going up though.
These big companies investing in self-driving systems are spending billions because they know how much money will be made on them. My wife and I pay about $300/month to have a second vehicle that we use only 5-6 times in that period. If I could have access to a $10 per trip robotaxi it would make far more sense to drop that second vehicle and use those services for the odd times I need it.
I agree with what you said about price fixing and competition. But why do you think multiple robotaxi companies will survive in the (long) future? We know that’s not what happened with Uber/Airbnb that killed their competitors with predatory pricing. How do you know this time it would be different?
Thanks for the detailed cost breakdown. You seem to have thought about this deeply. But I don’t see labour cost (e.g., engineers) in the breakdown. Why did you not include it?
I agree that the battery cost (and thus operating cost) would go down, but again I’m not convinced it would mean lower fare because that’s not what usually happens. I also agree these companies know how much money will be made on self-driving systems, which is exactly why I think they would aim for a monopoly, and the one surviving would charge passengers as high as it can.
In you and your wife’s case, is using a normal taxi 5-6 times not cheaper than the second vehicle cost?
Anyway, from what you wrote, it seems the biggest issue here is cost/fare. In that case, public transit, which we already have and benefits all people (including both the elderly and people with disabilities), would be a better solution than any taxi.
There are three ridesharing companies in the city I live near, plus regular taxis. Is there an example of a region that only has Uber that you can think of? Airbnb also has competition from VRBO and local hotels keeping nightly prices down.
The engineering to design the product is built into the cost of the vehicle, it gets amortized over a massive number of units over many years and therefore doesn’t need to be included in back of the napkin calculations like this.
I’m pretty sure that the government in my country (Canada) would destroy a self-driving car monopoly before it could establish itself. The EU probably would too. They would likely mandate the company license it’s tech to other manufactures at government set rates like they do currently with a few other industries like Cellphone networks. That being said, there are already more than a half-dozen big name companies working on it, I highly doubt only one will succeed.
I live in an area very poorly served by Taxis, since I’m about a half hour (on a highway) outside of the city. We only have 2 taxis (total vehicles, not companies) in the community that only operate during daytime hours and a ride into the city is about $50 one way. $300 doesn’t go very far when a return trip is $100+ tip. The bus into town only runs twice in the morning and twice back out in the afternoon and if your destination isn’t directly on the main route it can take 2+ hours to get to a specific location in the city.
Self-driving busses would be great too, they would increase access in many areas reducing the need for cars. They are the exact same tech though there’s almost no difference between driving a car or a bus from a machine learning perspective. The decrease in costs would be less though, since busses are much more capital intensive compared to their labour cost. They may only save 30-40% of costs by eliminating the drivers. Busses also operate at much higher utilization rates already.