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Keep in mind that this may not change when driverless cars become widely available. Maintaining a fleet thousands of driverless cars may prove to be more expens

Keep in mind that this may not change when driverless cars become widely available. Maintaining a fleet thousands of driverless cars may prove to be more expensive than crowdsourcing a vehicle fleet.

rat9988 7y ago
If uber drivers make enough to make their cars a worthwile investment, then I'd assume a fleet of driverless cars are profitable.
- kiran-rao 7y ago
  Do Uber drivers make enough to cover complete vehicle costs? I remember reading that after total costs of ownership (depreciation, insurance, gas, maintenance, etc) Uber drivers really aren't making much.
  - britch 7y ago
    As of 2018 it was something like $8.55 an hour median in the US accounting for costs of upkeep. https://www.theguardian.com/technology/2018/mar/01/uber-lyft-driver-wages-median-report https://www.theguardian.com/technology/2018/mar/01/uber-lyft...
  - slfnflctd 7y ago
    There are so many ways to slice and dice those numbers. Drivers who already own a car they aren't going to get rid of would be paying a lot of those costs anyway (other than wear & tear and fuel). Taxes are all over the place; some pay 30%+, others nothing. What it really comes down to is the ratio of cost of living for the driver to the amount they take home after buying gas. If I'm almost broke, want to buy more stuff than I can afford, and know I can get $100 worth of rides for $20 worth of gas in less than 2 days, the decision has already been made. As long as I have close to the same buying power, this will remain true. It's a delicate balance, though, and when you're competing against people in more dire straits who maybe aren't as good at math, at a certain point it could become unviable.
- tguedes 7y ago
  Uber drivers use their cars for stuff other than Uber. It's a way to make additional money from something you already have. That would not be the case if Uber had its own fleet.
  - dcolkitt 7y ago
    Why couldn't the same logic work in the post-self-driving future? If I own a self-driving car that sits in my garage from 8 PM to 8 AM, why not just put it on the Uber network and have it make money while I sleep? As long as people still own cars, why does Uber ever need to own their own fleet? If anything without the actual pain-in-the-ass of actually having to be a driver, I'd think a lot more people would crowdsource their idle vehicles.
    - ghaff 7y ago
      If a lot of people did that, I'd expect payments to drop to somewhere around the marginal cost of operating the vehicle which is mostly mileage-based. Or below because there's no shortage of people who need money now even if they realize they're basically borrowing money from their future self.
    - bluGill 7y ago
      Who needs a ride from 8pm to 8am? Nobody except drunks. Sure you can send your car out, but you need to plan to get up early every morning to clean the puke out. Most people follow similar schedules: they go to work at rush hour, ride with co-workers to lunch around noon and then home during the second rush hour. If you are willing to let your car out 6am to 8pm you got some possibilities - but this is when you need/want your car for your own convenience.
      - xenospn 7y ago
        Well, drunks, people who work late shifts, people who are going to/from the airport/train station, etc. But definitely not as many as the rush hour crowd.
    - dragonwriter 7y ago
- TruthSHIFT 7y ago
  The drivers may not make enough money: https://www.ridester.com/how-much-do-uber-drivers-make/#2 https://www.ridester.com/how-much-do-uber-drivers-make/#2 As a general rule, drivers should devote 20% of their earnings to insurance, maintenance, gas, and repairs. When this is accounted for, the average Uber driver earnings are barely above the poverty line.
  - bradstewart 7y ago
    Right, but with an AI driver all of those earnings that put a human slightly above the poverty line go into Uber's pocket.
    - lancesells 7y ago
      That's only if maintenance costs are the same (I'm assuming they won't be). I assume there will be much higher vandalism costs and some other costs that are new to owning a car.
  - luckydata 7y ago
    The best way to think about Uber is a reverse loan on your car. If you need money in a pinch that's a way you get it but it's not a way to actually make any sort of decent living.
mlthoughts2018 7y ago
Also, unless you are the sole IP owner of pivotal self-driving tech, it will just be a commodity that all ride-hailing services pay to use, meaning that price competition still implies the same poor margins as for traditional regional taxi operations.
deleted 7y ago
[deleted]
dcolkitt 7y ago
There's either two possibilities for the self-driving future. 1) Hardly anybody owns cars anymore. When we want to get from point A to point B, we just call a driverless car from the network. But this type of service is a natural monopoly. When people are ridesharing everywhere, the network with the biggest fleet, becomes the stochastically fastest and cheapest option. Plus add in the fact that they're collecting a lot more data to constantly improve algorithm. This is a winner-take-all market with fat monopoly margins for whoever wins. If Uber prevails, it's likely that their profits will be larger than the entire global auto market. 2) People still mostly own their own cars. They're driverless, but people like the convenience, customization and sense of personal ownership with having their own vehicle. Ridesharing is still an out-of-the-ordinary option for unconventional lifestyles or special occasions. But in this world, Uber doesn't need to own their own fleet. The same crowdsourcing logic still works. Personal vehicle ownership means a huge number of idle vehicles sitting in people's driveways. Without the pain-in-the-ass factor of actually having to be the driver, expect a lot more people to put their car on Uber's network.
- mortenjorck 7y ago
  There’s a third possible future, where a significant number of individuals buy autonomous vehicles as investments, effectively renting them out on a rideshare aggregator as one might buy an investment property to rent out. However, this aggregator almost certainly won’t be Uber or Lyft. It’s very unlikely that the time between now and ubiquitous, consumer-level AVs will be shorter than the time before Uber is acquired by Verizon for pennies on the dollar.
- TheOtherHobbes 7y ago
  1) doesn't work except in narrow circs, because there will always be an uncomfortable delay between ordering and arrival. And there are a lot of situations where that's either inconvenient (e.g you're cold and getting rained on) or more inconvenient (missing a flight because an event has removed all the available cars to the other side of the city.) 2) is a huge insurance headache. And most people aren't going to want strangers doing random things in their cars - whether it's leaving crumbs on the floor, spilling booze, or having sex. It's the AirBNB problem - the service starts off well with high quality buyers and sellers, but over time the reliability of both degrades. My guess is that 2) will be tried for a while but will not appeal to most owners. 1) will become a thing, but "popular" self-drive-sharing will acquire a sleazy and low-rent reputation. 0) will be an expensive upscale service with guaranteed nice cars and quickest possible delivery. But (square root of minus one) will be something else entirely - a new disruptive AI-enhanced service that gives users live local price and availability updates on everything, from transport to deliveries to fast food to accommodation to special items. This will algorithmically disrupt the algorithms of the disrupters, who will of course complain that it's unfair that technology is destroying their core business.
bunderbunder 7y ago
I can't fathom how. If you maintain a fleet of thousands of driverless cars, there are at least some economies of scale you can leverage: More negotiating power with your suppliers, the ability to purchase consumables like fuel and tires at wholesale prices, the ability to have your own in-house team of mechanics who can specialize in just your fleet, etc. If you crowdsource it, a lot of that stuff is going to have to be purchased at retail prices, which will raise the bottom line. You might be able to hide from that by capitalizing on some information asymmetry, by paying the people you crowdsource cars from less money than it's costing them to let you use their cars. But that's presumably only going to last for a short time, until private car owners wise up.
- microtherion 7y ago
  > You might be able to hide from that by capitalizing on some information asymmetry, by paying the people you crowdsource cars from less money than it's costing them to let you use their cars People are notoriously bad at properly pricing the depreciation of their cars.
  - B1FF_PSUVM 7y ago
    Until they starve, but P.T.Barnum covered that point.
- giarc 7y ago
  >the ability to purchase consumables like fuel and tires at wholesale prices, the ability to have your own in-house team of mechanics who can specialize in just your fleet, etc. But they don't purchase any of that stuff now, so doesn't matter if you get to economies of scale. I understand that when you remove the driver, a huge cost goes away, but it's replaced with having to own and maintain a vehicle.
fullshark 7y ago
Or you can have both, if car owners send their self driving cars out to make money on your platform.
seppin 7y ago
> Maintaining a fleet thousands of driverless cars may prove to be more expensive than crowdsourcing a vehicle fleet. And to get to the point where it's cheaper might take decades. With Uber's burn rate there's no way it gets there.

Keep in mind that this may not change when driverless cars become widely available. Maintaining a fleet thousands of driverless cars may prove to be more expensive than crowdsourcing a vehicle fleet.

rat9988 7y ago

If uber drivers make enough to make their cars a worthwile investment, then I'd assume a fleet of driverless cars are profitable.

kiran-rao 7y ago
Do Uber drivers make enough to cover complete vehicle costs? I remember reading that after total costs of ownership (depreciation, insurance, gas, maintenance, etc) Uber drivers really aren't making much.
- britch 7y ago
  As of 2018 it was something like $8.55 an hour median in the US accounting for costs of upkeep. https://www.theguardian.com/technology/2018/mar/01/uber-lyft-driver-wages-median-report https://www.theguardian.com/technology/2018/mar/01/uber-lyft...
- slfnflctd 7y ago
  There are so many ways to slice and dice those numbers. Drivers who already own a car they aren't going to get rid of would be paying a lot of those costs anyway (other than wear & tear and fuel). Taxes are all over the place; some pay 30%+, others nothing. What it really comes down to is the ratio of cost of living for the driver to the amount they take home after buying gas. If I'm almost broke, want to buy more stuff than I can afford, and know I can get $100 worth of rides for $20 worth of gas in less than 2 days, the decision has already been made. As long as I have close to the same buying power, this will remain true. It's a delicate balance, though, and when you're competing against people in more dire straits who maybe aren't as good at math, at a certain point it could become unviable.
tguedes 7y ago
Uber drivers use their cars for stuff other than Uber. It's a way to make additional money from something you already have. That would not be the case if Uber had its own fleet.
- dcolkitt 7y ago
  Why couldn't the same logic work in the post-self-driving future? If I own a self-driving car that sits in my garage from 8 PM to 8 AM, why not just put it on the Uber network and have it make money while I sleep? As long as people still own cars, why does Uber ever need to own their own fleet? If anything without the actual pain-in-the-ass of actually having to be a driver, I'd think a lot more people would crowdsource their idle vehicles.
  - ghaff 7y ago
    If a lot of people did that, I'd expect payments to drop to somewhere around the marginal cost of operating the vehicle which is mostly mileage-based. Or below because there's no shortage of people who need money now even if they realize they're basically borrowing money from their future self.
  - bluGill 7y ago
    Who needs a ride from 8pm to 8am? Nobody except drunks. Sure you can send your car out, but you need to plan to get up early every morning to clean the puke out. Most people follow similar schedules: they go to work at rush hour, ride with co-workers to lunch around noon and then home during the second rush hour. If you are willing to let your car out 6am to 8pm you got some possibilities - but this is when you need/want your car for your own convenience.
    - xenospn 7y ago
      Well, drunks, people who work late shifts, people who are going to/from the airport/train station, etc. But definitely not as many as the rush hour crowd.
  - dragonwriter 7y ago
TruthSHIFT 7y ago
The drivers may not make enough money: https://www.ridester.com/how-much-do-uber-drivers-make/#2 https://www.ridester.com/how-much-do-uber-drivers-make/#2 As a general rule, drivers should devote 20% of their earnings to insurance, maintenance, gas, and repairs. When this is accounted for, the average Uber driver earnings are barely above the poverty line.
- bradstewart 7y ago
  Right, but with an AI driver all of those earnings that put a human slightly above the poverty line go into Uber's pocket.
  - lancesells 7y ago
    That's only if maintenance costs are the same (I'm assuming they won't be). I assume there will be much higher vandalism costs and some other costs that are new to owning a car.
- luckydata 7y ago
  The best way to think about Uber is a reverse loan on your car. If you need money in a pinch that's a way you get it but it's not a way to actually make any sort of decent living.

mlthoughts2018 7y ago

Also, unless you are the sole IP owner of pivotal self-driving tech, it will just be a commodity that all ride-hailing services pay to use, meaning that price competition still implies the same poor margins as for traditional regional taxi operations.

deleted 7y ago

[deleted]

dcolkitt 7y ago

There's either two possibilities for the self-driving future. 1) Hardly anybody owns cars anymore. When we want to get from point A to point B, we just call a driverless car from the network. But this type of service is a natural monopoly. When people are ridesharing everywhere, the network with the biggest fleet, becomes the stochastically fastest and cheapest option. Plus add in the fact that they're collecting a lot more data to constantly improve algorithm. This is a winner-take-all market with fat monopoly margins for whoever wins. If Uber prevails, it's likely that their profits will be larger than the entire global auto market. 2) People still mostly own their own cars. They're driverless, but people like the convenience, customization and sense of personal ownership with having their own vehicle. Ridesharing is still an out-of-the-ordinary option for unconventional lifestyles or special occasions. But in this world, Uber doesn't need to own their own fleet. The same crowdsourcing logic still works. Personal vehicle ownership means a huge number of idle vehicles sitting in people's driveways. Without the pain-in-the-ass factor of actually having to be the driver, expect a lot more people to put their car on Uber's network.

mortenjorck 7y ago
There’s a third possible future, where a significant number of individuals buy autonomous vehicles as investments, effectively renting them out on a rideshare aggregator as one might buy an investment property to rent out. However, this aggregator almost certainly won’t be Uber or Lyft. It’s very unlikely that the time between now and ubiquitous, consumer-level AVs will be shorter than the time before Uber is acquired by Verizon for pennies on the dollar.
TheOtherHobbes 7y ago
1) doesn't work except in narrow circs, because there will always be an uncomfortable delay between ordering and arrival. And there are a lot of situations where that's either inconvenient (e.g you're cold and getting rained on) or more inconvenient (missing a flight because an event has removed all the available cars to the other side of the city.) 2) is a huge insurance headache. And most people aren't going to want strangers doing random things in their cars - whether it's leaving crumbs on the floor, spilling booze, or having sex. It's the AirBNB problem - the service starts off well with high quality buyers and sellers, but over time the reliability of both degrades. My guess is that 2) will be tried for a while but will not appeal to most owners. 1) will become a thing, but "popular" self-drive-sharing will acquire a sleazy and low-rent reputation. 0) will be an expensive upscale service with guaranteed nice cars and quickest possible delivery. But (square root of minus one) will be something else entirely - a new disruptive AI-enhanced service that gives users live local price and availability updates on everything, from transport to deliveries to fast food to accommodation to special items. This will algorithmically disrupt the algorithms of the disrupters, who will of course complain that it's unfair that technology is destroying their core business.

bunderbunder 7y ago

I can't fathom how. If you maintain a fleet of thousands of driverless cars, there are at least some economies of scale you can leverage: More negotiating power with your suppliers, the ability to purchase consumables like fuel and tires at wholesale prices, the ability to have your own in-house team of mechanics who can specialize in just your fleet, etc. If you crowdsource it, a lot of that stuff is going to have to be purchased at retail prices, which will raise the bottom line. You might be able to hide from that by capitalizing on some information asymmetry, by paying the people you crowdsource cars from less money than it's costing them to let you use their cars. But that's presumably only going to last for a short time, until private car owners wise up.

microtherion 7y ago
> You might be able to hide from that by capitalizing on some information asymmetry, by paying the people you crowdsource cars from less money than it's costing them to let you use their cars People are notoriously bad at properly pricing the depreciation of their cars.
- B1FF_PSUVM 7y ago
  Until they starve, but P.T.Barnum covered that point.
giarc 7y ago
>the ability to purchase consumables like fuel and tires at wholesale prices, the ability to have your own in-house team of mechanics who can specialize in just your fleet, etc. But they don't purchase any of that stuff now, so doesn't matter if you get to economies of scale. I understand that when you remove the driver, a huge cost goes away, but it's replaced with having to own and maintain a vehicle.

fullshark 7y ago

Or you can have both, if car owners send their self driving cars out to make money on your platform.

seppin 7y ago

> Maintaining a fleet thousands of driverless cars may prove to be more expensive than crowdsourcing a vehicle fleet. And to get to the point where it's cheaper might take decades. With Uber's burn rate there's no way it gets there.