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Since you seem to have a lot of relevant experience how likely is it that you think Waymo could ever succeed from a business perspective? As you mentioned, they

by mcot2 6y ago

Since you seem to have a lot of relevant experience how likely is it that you think Waymo could ever succeed from a business perspective? As you mentioned, they are going to need quite a few vehicles and at least some form of remote monitoring callcenter. I imagine the economics of this will be fairly unprofitable for many years to come still. Granted, Google has infinetly deep pockets, but thats a lot of money to recoup once it actually becomes profitable years down the road.

chairmanwow1 6y ago
I think yes, but the economics are actually very different than their competitors (Lyft / Uber) will be. I also think their path to profitability will not have Waymo acting as the supplier (of rides) and the platform. Lyft / Uber have variable cost structures, while Waymo will be in a race of diminishing returns of extracting value from the fixed costs of their vehicles before they are no longer in service. There's a great paper [1] that discusses this topic. In the 4th section the authors discuss a very straightforward model for this. They model a maximum time that a car could be in service (say 10 years) and a maximum mileage that these cars could operate. So then the car is in a race to earn as much money as possible to firstly pay for itself and then accumulate excess value before end of life for the robot. It's harder when the cars are way more expensive ($200k - $1M) and especially when high utilization is table stakes for getting this to work. High utilization can only happen when you have a lot of people successfully getting rides on your platform (which the hard balancing problem of supply vs demand). All this to say, yeah I think they can. I don't know if it will be the best business (race to low-margin operation of a fleet). This paper also has an interesting argument against the manifestation of a future where personal car ownership is too expensive and everyone just relies on this fleet of self-driving robots to cheaply go places. [1] Carpooling and the Economics of Self Driving Cars - https://web.stanford.edu/~ost/papers/sdc.pdf https://web.stanford.edu/~ost/papers/sdc.pdf

by mcot2 6y ago

chairmanwow1 6y ago

I think yes, but the economics are actually very different than their competitors (Lyft / Uber) will be. I also think their path to profitability will not have Waymo acting as the supplier (of rides) and the platform. Lyft / Uber have variable cost structures, while Waymo will be in a race of diminishing returns of extracting value from the fixed costs of their vehicles before they are no longer in service. There's a great paper [1] that discusses this topic. In the 4th section the authors discuss a very straightforward model for this. They model a maximum time that a car could be in service (say 10 years) and a maximum mileage that these cars could operate. So then the car is in a race to earn as much money as possible to firstly pay for itself and then accumulate excess value before end of life for the robot. It's harder when the cars are way more expensive ($200k - $1M) and especially when high utilization is table stakes for getting this to work. High utilization can only happen when you have a lot of people successfully getting rides on your platform (which the hard balancing problem of supply vs demand). All this to say, yeah I think they can. I don't know if it will be the best business (race to low-margin operation of a fleet). This paper also has an interesting argument against the manifestation of a future where personal car ownership is too expensive and everyone just relies on this fleet of self-driving robots to cheaply go places. [1] Carpooling and the Economics of Self Driving Cars - https://web.stanford.edu/~ost/papers/sdc.pdf https://web.stanford.edu/~ost/papers/sdc.pdf