4 ms·

Realistically, how long do I have before Silicon Valley stops subsidizing my transportation?

jethro_tell 9y ago
Honestly, I think they are subsidizing the drivers. I think the play is to subsidize rides to prop up user counts until they can sell those users to a self-driving car fleet. (or own one themselves). This would be my guess why a GM or ford (Can't remember which) would invest in someone like lyft. There's nothing to crazy here outside of an app that pairs two GPS coordinates. Access to user pools for self driving car fleets is going to be big money though. This is why uber could be in so much trouble over the otto/waymo thing. If they get barred from self driving cars, their competators will be able to offer the same or lower rates without having to pay drivers. Uber will have to continue to subsidize until then or loose mass user base.
- s73ver_ 9y ago
  But the drivers really don't make anything.
- matt4077 9y ago
  The numbers just don't add up for this scenario: Current valuation is 70 billion, Last known monthly active users is 40 million. Monthly spend per user is $50. Meaning: instead of buying those users for 70 billion, a car company could offer each one of those users $1700 of free credits, or about 3 years of their typical use. Considering that switching is as easy as installing some other app, I'm pretty sure they could buy marketshare for less than a 10th of that. ...and I haven't even factored in that the novelty of self-driving cars would probably make it incredibly easy to sign up users for whatever car company is first-to-market.
pgwhalen 9y ago
Haha I have the same question. Until self driving cars are common presumably, but I think a lot of people are deluded about how soon that will be.
- ghaff 9y ago
  I'd love to be proven wrong. But, progress made to date notwithstanding, getting to Johnny-cab as commercial service (i.e. door to door in city without a human even present) seems an incredibly high bar to be remotely relevant to a VC's planning horizon.
  - arkitaip 9y ago
    Not sure I would ever want to step inside a Johnny-cab https://www.youtube.com/watch?v=eWgrvNHjKkY https://www.youtube.com/watch?v=eWgrvNHjKkY
- erikpukinskis 9y ago
  I think it will be soon because there is a huge number of markets to test in. You have every state in the US, every country in the world, and a dozen players all working on it. In an n*n space, you just need one technology+municipality pair that says "ok, we'll risk it" and you have a very public, newsworthy demonstration. If there are real benefits to the tech, it will be impossible to keep them off Instagram. From there, it will spread to opportunist governments... Places who will try anything if it draws interest to their municipality. At some point after that it becomes a liability to not allow it. Now, how long before each of these stages? I don't know, but there's pressure there.
  - kmicklas 9y ago
    This explains how self driving will be legalized, not how it will be perfected, and it's not even close yet.
    - erikpukinskis 9y ago
      Each forces the other
- vl 9y ago
  Tesla sells "Full Self-Driving Capability" option for Model X and S on their website right now.

Honestly, I think they are subsidizing the drivers. I think the play is to subsidize rides to prop up user counts until they can sell those users to a self-driving car fleet. (or own one themselves). This would be my guess why a GM or ford (Can't remember which) would invest in someone like lyft. There's nothing to crazy here outside of an app that pairs two GPS coordinates. Access to user pools for self driving car fleets is going to be big money though. This is why uber could be in so much trouble over the otto/waymo thing. If they get barred from self driving cars, their competators will be able to offer the same or lower rates without having to pay drivers. Uber will have to continue to subsidize until then or loose mass user base.

s73ver_ 9y ago
But the drivers really don't make anything.
matt4077 9y ago
The numbers just don't add up for this scenario: Current valuation is 70 billion, Last known monthly active users is 40 million. Monthly spend per user is $50. Meaning: instead of buying those users for 70 billion, a car company could offer each one of those users $1700 of free credits, or about 3 years of their typical use. Considering that switching is as easy as installing some other app, I'm pretty sure they could buy marketshare for less than a 10th of that. ...and I haven't even factored in that the novelty of self-driving cars would probably make it incredibly easy to sign up users for whatever car company is first-to-market.

pgwhalen 9y ago

Haha I have the same question. Until self driving cars are common presumably, but I think a lot of people are deluded about how soon that will be.

ghaff 9y ago
I'd love to be proven wrong. But, progress made to date notwithstanding, getting to Johnny-cab as commercial service (i.e. door to door in city without a human even present) seems an incredibly high bar to be remotely relevant to a VC's planning horizon.
- arkitaip 9y ago
  Not sure I would ever want to step inside a Johnny-cab https://www.youtube.com/watch?v=eWgrvNHjKkY https://www.youtube.com/watch?v=eWgrvNHjKkY
erikpukinskis 9y ago
I think it will be soon because there is a huge number of markets to test in. You have every state in the US, every country in the world, and a dozen players all working on it. In an n*n space, you just need one technology+municipality pair that says "ok, we'll risk it" and you have a very public, newsworthy demonstration. If there are real benefits to the tech, it will be impossible to keep them off Instagram. From there, it will spread to opportunist governments... Places who will try anything if it draws interest to their municipality. At some point after that it becomes a liability to not allow it. Now, how long before each of these stages? I don't know, but there's pressure there.
- kmicklas 9y ago
  This explains how self driving will be legalized, not how it will be perfected, and it's not even close yet.
  - erikpukinskis 9y ago
    Each forces the other
vl 9y ago
Tesla sells "Full Self-Driving Capability" option for Model X and S on their website right now.