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The article says those are just demo prices to test customer's reactions, and then goes on to say those prices reflect 1.70$ per mile, comparable to uber and li

by pnloyd 8y ago

The article says those are just demo prices to test customer's reactions, and then goes on to say those prices reflect 1.70$ per mile, comparable to uber and lift, but that an analyst said they could afford to go as low as 70 cents per a mile now, and 35 cents per a mile by 2020. If that's true and materialize, WOW!

rat_1234 8y ago
I totally believe it. If you've ever taken a taxi in a market like South Africa, China, or Chile, it's so cheap it's insane. Almost unbelievable. In many cases the cars are more or less the same, the gas costs more or less the same, so the only variable that's different is the cost of labor which Waymo eliminates.
- shkkmo 8y ago
  Most of those cars are much older and have much lower maintenance labor costs as well. I fully expect self driving cars to remain more expensive than taxis in many of the countries I've visited.
  - rat_1234 8y ago
    Oh well sure I do as well. All they have to do is be less expensive than what Uber can deliver enough to get people over any concerns with technology and they're good. My point is really that Waymo is eliminating what is unquestionably the highest marginal cost component of a ride.
neaden 8y ago
I'm surprised by this, 35 cents is less than the IRS deduction for mileage at about 55 cents a mile which is supposed to represent depreciation and direct expenses, how would they get so much lower?
- pnloyd 8y ago
  My guess is by designing small electric cars specifically for this service. You could do away with most of the amenities conventional cars have and purely focus on making them cheap and easy to manufacture.
  - neaden 8y ago
    Maybe someday, but not by 2020 surely? They are still going to be using hybrids then I assume.
    - Fricken 8y ago
      They should have some of the all electric 20k Jaguar Ipaces they've ordered operational by then.
- TangoTrotFox 8y ago
  While I think we can only speculate on exactly what Waymo is doing, in general driverless taxis should be able to be operated for even less per mile than it would cost if you purchased a vehicle yourself. The reason is economies of scale along with the potential for vertical integration. There are pretty big margins in most things related to vehicles from parts to maintenance to repairs. Economy of scale can bring those much closer to 0, and vertical integration can bring them literally to 0. This is why I think driverless taxis will be much bigger than many people expect, but also why this industry is going to get monopolized like none other. Bigger players will be able to get taxis to you faster, offer them cheaper, and still show bigger profit margins than smaller players. And without scaling labor costs... whoever wins this industry is going to be making a completely ridiculous amount of money. Consider that in 2016 3.2 trillion miles were driven in the US alone. 10% of those miles is 320 billion. A profit margin of a nickle above operating costs is a net of $16 billion. That's at operating on a nickle per mile, with 10% of 2016's mileage, in a single country. On the other hand I expect all the players will realize this, so we should see and benefit from some insane competition as long as the market remains relatively free.
  - 8y ago

by pnloyd 8y ago

rat_1234 8y ago

I totally believe it. If you've ever taken a taxi in a market like South Africa, China, or Chile, it's so cheap it's insane. Almost unbelievable. In many cases the cars are more or less the same, the gas costs more or less the same, so the only variable that's different is the cost of labor which Waymo eliminates.

shkkmo 8y ago
Most of those cars are much older and have much lower maintenance labor costs as well. I fully expect self driving cars to remain more expensive than taxis in many of the countries I've visited.
- rat_1234 8y ago
  Oh well sure I do as well. All they have to do is be less expensive than what Uber can deliver enough to get people over any concerns with technology and they're good. My point is really that Waymo is eliminating what is unquestionably the highest marginal cost component of a ride.

neaden 8y ago

I'm surprised by this, 35 cents is less than the IRS deduction for mileage at about 55 cents a mile which is supposed to represent depreciation and direct expenses, how would they get so much lower?

pnloyd 8y ago
My guess is by designing small electric cars specifically for this service. You could do away with most of the amenities conventional cars have and purely focus on making them cheap and easy to manufacture.
- neaden 8y ago
  Maybe someday, but not by 2020 surely? They are still going to be using hybrids then I assume.
  - Fricken 8y ago
    They should have some of the all electric 20k Jaguar Ipaces they've ordered operational by then.
TangoTrotFox 8y ago
While I think we can only speculate on exactly what Waymo is doing, in general driverless taxis should be able to be operated for even less per mile than it would cost if you purchased a vehicle yourself. The reason is economies of scale along with the potential for vertical integration. There are pretty big margins in most things related to vehicles from parts to maintenance to repairs. Economy of scale can bring those much closer to 0, and vertical integration can bring them literally to 0. This is why I think driverless taxis will be much bigger than many people expect, but also why this industry is going to get monopolized like none other. Bigger players will be able to get taxis to you faster, offer them cheaper, and still show bigger profit margins than smaller players. And without scaling labor costs... whoever wins this industry is going to be making a completely ridiculous amount of money. Consider that in 2016 3.2 trillion miles were driven in the US alone. 10% of those miles is 320 billion. A profit margin of a nickle above operating costs is a net of $16 billion. That's at operating on a nickle per mile, with 10% of 2016's mileage, in a single country. On the other hand I expect all the players will realize this, so we should see and benefit from some insane competition as long as the market remains relatively free.
- 8y ago