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Owning a car is expensive. But so is operating a fleet of autonomous vehicles, so I expect the cost charged per ride will be non-negligible. Today Uber and othe

by uptown 10y ago

Owning a car is expensive. But so is operating a fleet of autonomous vehicles, so I expect the cost charged per ride will be non-negligible. Today Uber and others are able to avoid the costs of ownership and maintenance and repairs and cleaning (etc.) because all of those costs fall directly on the owner, but if they own their own fleet, these costs are now their responsibility. So I expect the cost per ride will need to increase. For urban transport this model may work. Owning a car in a city imposes additional costs not incurred in the suburbs. And taxis have proven pay per ride is sustainable. Where I cannot yet see it working are suburbs. I think of the frequency and range of some of the driving in the suburbs and try to figure what the cost per those rides might be, and I can't see how the economics work for either party. Car service companies will need to charge enough to pay for the vehicles and maintenance, and the family carting kids to three or four places in a day is going to balk at $180 in transport costs on a random Saturday of activities.

stult 10y ago
You're dramatically overestimating the costs. Renting a car only costs $20-40 per day now. Far, far less than $180. It's not going to increase with driverless cars. It may actually decrease because of reduced insurance and wear and tear from better driving. More generally, the cost of ownership per mile is only around 10 cents. So a driverless car with a utilization of 85% and an average speed of 60mph (high estimates) would need to charge $120 per day to break even. For 1200 miles of driving and 20 hours of travel time, which is far more than a single driver with a rented car would travel. That's $6 per hour. And gas accounts for 95% of that, so if we go electric the costs are even lower. With taxis, the overwhelming majority of the cost is the driver's wage. Which is way more of an issue in rural areas where they aren't getting paid once they drop the fare off. Without a driver to pay, low density demand is far less of an issue because you may have to bear the cost of getting the car to the next fare, but that's going to be a function of distance traveled rather than time.
- caseysoftware 10y ago
  I think you're 100% right that most people don't consider the much higher % utilization in their analysis. I think the gap is still the "stations" for the automated cars to pull into for the cleaning, maintenance, etc. But looking at the Tesla maintenance page - https://www.tesla.com/en_GB/support/maintenance-plans https://www.tesla.com/en_GB/support/maintenance-plans - many of the normal checks and changes go away. Wide scale adoption of electric cars will be one shock to the auto industry (no pun intended) and self-driving will be another. I wonder who will survive?
- illumin8 10y ago
  Your rental rates are accurate, but the cost of ownership is way more than $0.10 per mile. For that to be true, you'd have to pay $20K for the average car (the average is higher), drive it for 200,000 miles, and that doesn't count maintenance, insurance, or gas. Realistic costs are far closer to the $0.55 a mile that the IRS uses to calculate the mileage tax deduction.
IshKebab 10y ago
> Today Uber and others are able to avoid the costs of ownership and maintenance and repairs and cleaning (etc.) because all of those costs fall directly on the owner, but if they own their own fleet, these costs are now their responsibility. So I expect the cost per ride will need to increase. That makes no sense. The costs of maintaining the car don't magically disappear because the driver pays them. They're paid from ride fares one way or another.
- deleted 10y ago
  [deleted]
- uptown 10y ago
  I believe that there are a lot of drivers not factoring in the maintenance and wear-and-tear on their cars when they look at the income they're earning from being a part-time driver. When Uber owns the fleet, only then will they be
stupidcar 10y ago
The shift to electric vehicles should drastically reduce the cost of car maintenance though, right? The number of moving parts in an internal combustion engine is far greater than that in an electric powertrain. Plus you also have cheaper fuel costs for electric vehicles. Source: http://www.olino.org/us/articles/2009/02/17/costs-of-the-electric-car http://www.olino.org/us/articles/2009/02/17/costs-of-the-ele...

by uptown 10y ago

stult 10y ago

You're dramatically overestimating the costs. Renting a car only costs $20-40 per day now. Far, far less than $180. It's not going to increase with driverless cars. It may actually decrease because of reduced insurance and wear and tear from better driving. More generally, the cost of ownership per mile is only around 10 cents. So a driverless car with a utilization of 85% and an average speed of 60mph (high estimates) would need to charge $120 per day to break even. For 1200 miles of driving and 20 hours of travel time, which is far more than a single driver with a rented car would travel. That's $6 per hour. And gas accounts for 95% of that, so if we go electric the costs are even lower. With taxis, the overwhelming majority of the cost is the driver's wage. Which is way more of an issue in rural areas where they aren't getting paid once they drop the fare off. Without a driver to pay, low density demand is far less of an issue because you may have to bear the cost of getting the car to the next fare, but that's going to be a function of distance traveled rather than time.

caseysoftware 10y ago
I think you're 100% right that most people don't consider the much higher % utilization in their analysis. I think the gap is still the "stations" for the automated cars to pull into for the cleaning, maintenance, etc. But looking at the Tesla maintenance page - https://www.tesla.com/en_GB/support/maintenance-plans https://www.tesla.com/en_GB/support/maintenance-plans - many of the normal checks and changes go away. Wide scale adoption of electric cars will be one shock to the auto industry (no pun intended) and self-driving will be another. I wonder who will survive?
illumin8 10y ago
Your rental rates are accurate, but the cost of ownership is way more than $0.10 per mile. For that to be true, you'd have to pay $20K for the average car (the average is higher), drive it for 200,000 miles, and that doesn't count maintenance, insurance, or gas. Realistic costs are far closer to the $0.55 a mile that the IRS uses to calculate the mileage tax deduction.

IshKebab 10y ago

> Today Uber and others are able to avoid the costs of ownership and maintenance and repairs and cleaning (etc.) because all of those costs fall directly on the owner, but if they own their own fleet, these costs are now their responsibility. So I expect the cost per ride will need to increase. That makes no sense. The costs of maintaining the car don't magically disappear because the driver pays them. They're paid from ride fares one way or another.

deleted 10y ago
[deleted]
uptown 10y ago
I believe that there are a lot of drivers not factoring in the maintenance and wear-and-tear on their cars when they look at the income they're earning from being a part-time driver. When Uber owns the fleet, only then will they be

stupidcar 10y ago

The shift to electric vehicles should drastically reduce the cost of car maintenance though, right? The number of moving parts in an internal combustion engine is far greater than that in an electric powertrain. Plus you also have cheaper fuel costs for electric vehicles. Source: http://www.olino.org/us/articles/2009/02/17/costs-of-the-electric-car http://www.olino.org/us/articles/2009/02/17/costs-of-the-ele...