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Self driving taxis will likely end up a monopolized market, and it may become one of the biggest industries in existence. The thing is there is no reason that

Self driving taxis will likely end up a monopolized market, and it may become one of the biggest industries in existence. The thing is there is no reason that companies could not be, at least theoretically, profitable charging rates that are actually less than it would cost for an individual to own a car. Without a driver their only overhead is the maintenance/insurance on the car itself. And that's something owners have to pay as well -- with the major difference that thanks to economies of scale the taxi monopoly could pay substantially less for. The company that has the most cars will be able to offer faster rides and offer them cheaper. The potential profit here is really quite incredible. Last year there were 3.2 trillion miles driven in the US alone. Imagine a taxi company is able to snag about 1/3rd of those or about 1 trillion miles. Their profit margin translates to $10 billion net per penny/mile of profit. So if they can, through economy of scale, operate their vehicles at $0.05/mile less than an individual owner could. And they then sell their service at a $0.01/mile less than what it would cost if you owned the car, then they're turning $40billion/year net. And that's again with 1/3rd the driving market. When you can offer taxis at below ownership prices, who would still own a car? Tesla seems to be flirting with the possibility of taking this one step further will full vertical integration of production itself. It's already in their license that you're not allowed to use their vehicles (in what will be full autonomous mode) for any ride sharing service except for their yet-to-be-launched one. Interesting future coming up fast!

dannyw 9y ago
Whether their license will be enforceable in a court of law (or fall to a variant of a broadened first sale doctrine) is up in the air, though. With software and services encompassing more of everyday life (like self driving cars), at some point the Supreme Court may very well re-interpret it.
CPLX 9y ago
> Self driving taxis will likely end up a monopolized market, and it may become one of the biggest industries in existence. Like, where do people get this kind of argument from? I see it a lot around here. Those are two highly contestable premises, neither of which are at all supported. Especially the first one. Why on earth would autonomous taxis be a monopoly? There will always be a more profitable segment of the market and a less profitable one, and thus always an incentive for a new entrant to cherry pick the most profitable segment. And the most important capital investment, the roads, by definition will be open to new users. There's so much magical thinking around self-driving cars. You guys are aware that the only difference between a self driving car and not is the person driving right? It's just replacing people. And people aren't particularly expensive or hard to come by. It's not like we've never invented a machine to replace people before.
- losteric 9y ago
  The software and training data set an extremely high barrier to competition. Once you've solved self-driving taxis, you've also solved a large chunk of self-driving commercial transportation. AI trucks could kill off rail, in addition to manned semis. From there, it's a small leap to becoming the backbone of an ultra-efficient on-demand national distribution network. All without the massive operating overhead of human labor... No sleep, no breaks, no weekends, no healthcare, no HR, no wages, just the price of electricity and the low/infrequent maintenance costs of electric vehicles. Eventually. I think the taxis are 5 years away from 24/7 availability in NYC, maybe 3 for San Francisco, and the grand vision is probably 10 years out. But... Yeah... This is going to be huge.
  - rhino369 9y ago
    >The software and training data set an extremely high barrier to competition. How many technological barriers to entry have survived very long? The industry may be huge, but it's not clear that only one company will crack self-driving. I think it's far more likely every major autocompany will develop good enough versions of self driving. Plus, these companies won't be able to hide their software behind algorithms. Someone is going to reverse engineer anything put into the open market.
  - CPLX 9y ago
    > I think the taxis are 5 years away from 24/7 availability in NYC, maybe 3 for San Francisco lol That's another amusing point of view I see here a lot. The use case of taxis in a major city is by far the most challenging use case for autonomous driving. Mark your calendars for 5-10 years after you first see an actual autonomous vehicle having any type of real world application at all. Which you haven't. The whole idea that taxis are the vanguard of autonomous driving is obvious patent nonsense, why it persists remains a mystery to me.
    - losteric 9y ago
      > Mark your calendars for 5-10 years after you first see an actual autonomous vehicle having any type of real world application at all. Which you haven't. What's your criteria here? Because I have the same opinion as you... Except I've literally seen experimental autonomous cars driving on the street... Hence +3 years for SV, and +5 for NYC. Taxis are not the vanguard, they're just the most visible. Autonomous trucking is underway and will likely see mass adoption before taxis. The revolution is close - we're seeing disruption everywhere. I could empathize if this was an isolated Google vaporware experiment... but every class of vehicle has promising automation, researched by dozens of companies around the world, and implementing multiple approaches. Most will fail, of course, but we are on the cusp of success.

dannyw 9y ago

Whether their license will be enforceable in a court of law (or fall to a variant of a broadened first sale doctrine) is up in the air, though. With software and services encompassing more of everyday life (like self driving cars), at some point the Supreme Court may very well re-interpret it.

CPLX 9y ago

> Self driving taxis will likely end up a monopolized market, and it may become one of the biggest industries in existence. Like, where do people get this kind of argument from? I see it a lot around here. Those are two highly contestable premises, neither of which are at all supported. Especially the first one. Why on earth would autonomous taxis be a monopoly? There will always be a more profitable segment of the market and a less profitable one, and thus always an incentive for a new entrant to cherry pick the most profitable segment. And the most important capital investment, the roads, by definition will be open to new users. There's so much magical thinking around self-driving cars. You guys are aware that the only difference between a self driving car and not is the person driving right? It's just replacing people. And people aren't particularly expensive or hard to come by. It's not like we've never invented a machine to replace people before.

losteric 9y ago
The software and training data set an extremely high barrier to competition. Once you've solved self-driving taxis, you've also solved a large chunk of self-driving commercial transportation. AI trucks could kill off rail, in addition to manned semis. From there, it's a small leap to becoming the backbone of an ultra-efficient on-demand national distribution network. All without the massive operating overhead of human labor... No sleep, no breaks, no weekends, no healthcare, no HR, no wages, just the price of electricity and the low/infrequent maintenance costs of electric vehicles. Eventually. I think the taxis are 5 years away from 24/7 availability in NYC, maybe 3 for San Francisco, and the grand vision is probably 10 years out. But... Yeah... This is going to be huge.
- rhino369 9y ago
  >The software and training data set an extremely high barrier to competition. How many technological barriers to entry have survived very long? The industry may be huge, but it's not clear that only one company will crack self-driving. I think it's far more likely every major autocompany will develop good enough versions of self driving. Plus, these companies won't be able to hide their software behind algorithms. Someone is going to reverse engineer anything put into the open market.
- CPLX 9y ago
  > I think the taxis are 5 years away from 24/7 availability in NYC, maybe 3 for San Francisco lol That's another amusing point of view I see here a lot. The use case of taxis in a major city is by far the most challenging use case for autonomous driving. Mark your calendars for 5-10 years after you first see an actual autonomous vehicle having any type of real world application at all. Which you haven't. The whole idea that taxis are the vanguard of autonomous driving is obvious patent nonsense, why it persists remains a mystery to me.
  - losteric 9y ago
    > Mark your calendars for 5-10 years after you first see an actual autonomous vehicle having any type of real world application at all. Which you haven't. What's your criteria here? Because I have the same opinion as you... Except I've literally seen experimental autonomous cars driving on the street... Hence +3 years for SV, and +5 for NYC. Taxis are not the vanguard, they're just the most visible. Autonomous trucking is underway and will likely see mass adoption before taxis. The revolution is close - we're seeing disruption everywhere. I could empathize if this was an isolated Google vaporware experiment... but every class of vehicle has promising automation, researched by dozens of companies around the world, and implementing multiple approaches. Most will fail, of course, but we are on the cusp of success.