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> In a swipe at Tesla, he said that by charging hourly fees, VW would make autonomous driving more accessible than “a car with a five-digit surcharge.” This is

> In a swipe at Tesla, he said that by charging hourly fees, VW would make autonomous driving more accessible than “a car with a five-digit surcharge.” This is completely disingenuous at best, and malicious at worst. This is a perfect example of the boots theory of socioeconomic unfairness [1]. This is just taking advantage of the poor-middle class' inability to pay a larger upfront cost, to extort them for more over a larger period of time. The average person in the northeast spends 31 minutes commuting per day [2], for simplicity that's 0.5 hours,* 2 commutes a day, * 5 days a week, * 50 weeks a year (assuming 2 weeks vacation), is 250 hours commuting a week. At ~9 dollars including tax per hour, that means in just 4.4 years[3] it's already more expensive to rent this feature if the surcharge is initially 10k as VW claims. This is true even if the car is used ONLY for commuting, which is likely a non-major portion of use time. This is 100% a way to extract more money from consumers, especially non financially stable consumers, while lying to all of our faces. [1] https://moneywise.com/managing-money/budgeting/boots-theory-of-socioeconomic-unfairness https://moneywise.com/managing-money/budgeting/boots-theory-... [2] https://www.statista.com/statistics/798393/us-workers-average-commuting-time-region/ https://www.statista.com/statistics/798393/us-workers-averag... [3] https://www.caranddriver.com/research/a33235649/ownership-costs-of-cars/ https://www.caranddriver.com/research/a33235649/ownership-co...

chewz 5y ago
I agree with you. But this system is called capitalism for a reason. If you do not have capital you loose...
- nix23 5y ago
  But it's called Volkswagen for a reason too ;)
  - chewz 5y ago
    The name is from the other era ;-) https://en.wikipedia.org/wiki/Volkswagen#1932%E2%80%931938:_People's_Car_project https://en.wikipedia.org/wiki/Volkswagen#1932%E2%80%931938:_...
    - nix23 5y ago
      The Name "Germany" is from a much different era too ;) >The English word Germany derives from the Latin Germania, which came into use after Julius Caesar adopted it for the peoples east of the Rhine https://en.wikipedia.org/wiki/Germany#Etymology https://en.wikipedia.org/wiki/Germany#Etymology
- IncRnd 5y ago
  Don't forget to make your payment for having commented today.
usrnm 5y ago
And you've just described a modern SaaS service
milchek 5y ago
Well said, and I think the idea that in the future people will own less and rent more is discussed quite often. In the tech space this has been true for some time, hell, I still remember buying a version of Adobe Master Suite and later lamenting at the switch to subscription model. I used to be quite negative about of going further down this path, but the way I see it now, what choice do we have in the future? The world population is growing, resources are limited. Is it it feasible that we can all own houses, multiple cars, gadgets etc? I don't know anymore what the 'right' approach is here. Do we allow people to own and consume as much as they want forever or will the future be radically different in this sense where no one owns anything (car, property or gadgets)? The model that works now may not work forever. Curious to hear from someone more well versed in this kind of topic on their thoughts?
- xivzgrev 5y ago
  How is autonomous driving an increasingly scarce resource? The tech industry, with zero marginal cost, took to the subscription model with great success. Hugely profitable. Now every business looks to work in subscriptions. I think what we will end up having is that initial players to offer autonomous driving will be able to charge, because it’s scarce and to recoup investment. Eventually the tech will get commoditized as computers grow ever more powerful, and someone will offer a car with free autonomous driving in order to sell more cars. Subscriptions make the most sense for stuff you buy regularly, and stuff that can’t be monetized other ways (like Netflix). Car manufacturers are neither. Plus they have to compete with likes of Waymo and Uber - are they going to want to charge $8.50 an hr, plus the cost of gas, car, insurance etc, when I could take a self driving Uber for $20/hr?
  - CorrectHorseBat 5y ago
    >How is autonomous driving an increasingly scarce resource? Space is the scarce resource. In a city that's full of 90% of the time parked cars it doesn't really make sense for everyone to have their own car. Autonomous driving just combines the best of Uber and car sharing.
    - 5y ago
danuker 5y ago
> inability to pay a larger upfront cost, to extort them for more over a larger period of time. I say, the more competition for banks, the better.
JumpCrisscross 5y ago
> This is 100% a way to extract more money from consumers, especially non financially stable consumers, while lying to all of our faces Isn't this hyperbolic? I split time between at least two cities. Being able to pay as I go represents a real saving in cost, time and attention. Sometimes buying is better than renting. But sometimes there are economies of centralization. AWS isn't a scam on companies too poor to buy servers.
- nix23 5y ago
  >AWS isn't a scam on companies too poor to buy servers. It often is, for small and medium business (traditional ones) it's often cheaper to rent DC-Space and buy some servers yourself...but hey if you pay and don't do the math, that's your problem.
  - DaiPlusPlus 5y ago
    Physical co-lo is only cheaper if your time is worthless (ditto for Linux-on-the-corporate-desktop, or anything else that’s nominatively gratis). My current SaaS gig runs in Azure (App Services and containers - no VMs nor “serverless”) and being completely free of the need to do sysadmin work is just so nice. When I was colocating my own rack about a decade ago there was always something that needed my attention, be it security updates, some new unexpected error in the syslogs, RAID drive failing, etc - that I’d need to commute to the DC an hour away or pay the DC’s helping-hands fees. Back when I was younger it was fun and valuable to gain those experiences, but right now I’m a west-coast SWE and no employer wants me to spend my time doing sysadmin/SRE work when my time is literally worth ten times more doing product work and letting MS’ Azure staff keeping things humming along. For high-availability, AWS/Azure/GCP all the way! There’s no way a micro-ISV SaaS vendor can compete if they have to burn cycles doing unprofitable infrastructure work.
    - jjav 5y ago
      > Physical co-lo is only cheaper if your time is worthless Physical colocation is nearly always cheaper than AWS for most use cases. Exceptions are when your usage is so tiny that it doesn't need even a single full-time server, and, when your usage is so erratic that provisioning for the spikes doesn't make sense. For everyone else, you're paying a very large premium for AWS over what it'd cost to buy and operate some servers.
tchalla 5y ago
I’d me interested to see this math for subscriptions like Netflix, Spotify and AWS.
stefan_ 5y ago
What do you call a model where you sell "fully self driving capable hardware" that isn't not once, but about 2.5 times?
toss1 5y ago
If there were no way to turn it off so any driving cost $8.50/hr, I'd be with you. But if it can be turned off and I can just drive as today as with a normal car, and I'm not paying any extra for the idle feature set, where's the problem? With the current state of autonomous driving, I'd never use it anyway. No feature I've read about is good enough to just sleep in the backseat. Expecting the driver to be 90%+ idle then, when the "autopilot" fails and I must get instantly up to speed on the full context and state of the car, is both a recipe for disaster and would make me a very nervous driver/passenger (especially when I know that it would fail to recognize things like a semi-truck parked sideways across the road or a lane-splitting concrete barrier dead-ahead). When and if a true and trustworthy autopilot is available, I'd likely prefer a per hour charge. I'd use it only when I really needed it, such as when I really need the time to keep working on this commute, or I'm really tired and think it's safer to be driven home. As long as there is variety available in the market, this seems like a find option to have. At some point, when I find myself using it a lot, then it's time to go out and buy a car like a Tesla where it's just included as a package. Of course, if VW are smart, they'll also offer a single-price or monthly fee 'Full-Time Self-Drive' package, so I don't need to go to a competitor to get it. OTOH, if the industry starts to look like internet security cameras or thermostats, where the there is nothing but a subscription, or televisions where there is almost no way to just get a non-'connected' monitor, I'm totally with you -- this would be a horrible example of exploitative, extractive, rent-seeking corporate behavior.
- soco 5y ago
  I'm afraid the single model market is the way of the future. Why wouldn't VW bank on the same enslaving system all other corporations so easily get away with? Other commenters talk about going to the competition if we're unhappy - except the entire competition does exactly the same so there's no alternative. A market opening, would say some? No there's none, the subscription model is too profitable for any CEO to even bother imagining an alternative.
  - toss1 5y ago
    Sadly, you're probably right, some kind of quasi-Nash Equilibrium local maxima that sucks for everyone.
Mashimo 5y ago
Could be decent for people who only want to use autonomous driving on occasion, not with every commute. Keep in mind this is a German taking to a German magazine, US business model might be different (But probably not)
- devoutsalsa 5y ago
  Yeah, I don’t own a car, but I easily could. 7 euros per hour is cheaper than any car I could rent for a few hours, and cheaper than almost any ride share option. The only place I’ve been where calling a ride share would maybe be cheaper is Pakistan.
  - anastalaz 5y ago
    You would still have to buy the car. The 7 euros is just for using the autopilot feature.
    - devoutsalsa 5y ago
      Ah. I clearly missed the point of the article.
dvfjsdhgfv 5y ago
> This is just taking advantage of the poor-middle class' inability to pay a larger upfront cost, to extort them for more over a larger period of time. At least you still have a choice. In the software world, this freedom of choice is coming to an end, with Microsoft, Adobe, Autodesk and many others discontinuing "pay once own forever" products.
- GekkePrutser 5y ago
  The same will happen to other markets if we don't vote with our wallets. Philips is already planning to offer "Light as a service" to consumers. Citing circularity concerns, after all the incentive is now on them to make lightbulbs last as long as possible rather than as short as possible. But really it means they've been cheating us with planned obsolescence for years. I really don't want to be dependent on monthly contracts for every little thing. Never. I spend 20 euros per year on lightbulbs and I have a lot of smart ones. I'm sure any subscription plan won't be that cheap. Because the whole point of subscription models is for the company to make lots of money while doing nothing.
jbverschoor 5y ago
So a car is free to operate? No fuel/electricity No road tax No insurance No maintenance
- SamBam 5y ago
  No, they're talking about a subscription model for a feature. Read the article.
  - jbverschoor 5y ago
    You're right.
estaseuropano 5y ago
Locally a new ID.4 costs somewhere around €40-60k. Does VW really want me to spend €40k+ on a car, pay all maintenance, all insurance, all electricity, storage/parking, charging infrastructure, etc and then still pay 8€ per hour to use a main feature of the car? If I do a 5h drive it would be cheaper to pay the train instead of taking the car I have bought. Absolutely mad.
GekkePrutser 5y ago
You mean 250 hours a year, not a week. But 31 minutes commuting per day is super low, that's 15 minutes each way. I doubt that is really the average to be honest. Of course with the pandemic commuting is not a big time sink anymore but I wonder how permanent this will be.
- gspr 5y ago
  Yeah. I usually think that Americans have an insane tolerance for commuting, but 31 minutes per day is nothing! 15 minutes door-to-door to work is pretty fantastic — so fantastic that I too doubt that it's the average in the US northeast. Does this average perhaps count people who aren't working as having zero commute?
  - Firadeoclus 5y ago
    There is no indication that 31 minutes is per day, so I'd assume it's one way.
    - gspr 5y ago
      Ah yes, I see now that it literally says "to work". Thanks!
    - GekkePrutser 5y ago
      But then the calculation on a yearly basis doesn't make sense, it'd have to be doubled.
      - Firadeoclus 5y ago
        hyperhopper wrote "* 2 commutes a day".
- arriu 5y ago
  That average does seem quite low... However, I do live in the greater Toronto area and we're known for having terrible traffic. My pre-covid daily work commute was 2-3 hours on the 401.
jbjbjbjb 5y ago
Well maybe the daily commute isn’t light usage and therefore isn’t the best case for pay as you go. There are plenty of other use cases that fit really nicely, replacing a taxi for a night out, occasional long journeys, times when you’re feeling too tired to drive. But having said that, I don’t see why we wouldn’t just expect to go autonomous all the time. Free or included in the price autonomous driving would be an obvious opportunity for any competitors.
pappyo 5y ago
You're not capturing all the expenses to car ownership: Insurance Fuel/charging Excise tax Parking Maintenance Cleaning And most importantly, the hassel to deal with the above.
- incompatible 5y ago
  If I understand it correctly, that would be the fee for the self-driving feature, not the entire car. I suppose $8.50 per hour would be a reasonable rate for a car rental, although daily rates should be less.
agilob 5y ago
Bill Gates says people shouldn't own land, should always rent. That another company from US (forgot name) that buys houses for 50% higher asking price, now this. These days we rent books, games, flats, soon we'll rent homes and cars. No need to own anything when you can pay more money to rent it.
- manquer 5y ago
  Sure it this encourages rent seeking behavior and has impact on the your long term wealth. However if your able to derive utility from the product by renting why should you buy ? It is inefficient way to produce and consume goods. As a society we already waste too much by buying and hardly using things. Libraries are great way to reduce the number of actual books printed. Most people don't read most books , having a large unread personal collection is common vanity spend people usually do, which is really a waste of resources. Many people rent camera/lens when they need them instead of buying expensive gear which is rarely used , these are efficiencies that are good to have. Not all renting is bad
  - agilob 5y ago
    >As a society we already waste too much by buying and hardly using things. Yes, but there are things like car or house that are used daily
- imtringued 5y ago
  >Bill Gates says people shouldn't own land, should always rent. Private ownership of land doesn't work because land value goes up even with no input of the land owner. https://upload.wikimedia.org/wikipedia/commons/a/aa/Everybody_works_but_the_vacant_lot_%28cropped%29.jpg https://upload.wikimedia.org/wikipedia/commons/a/aa/Everybod... You are free to own the house and car.
  - rootlocus 5y ago
    Maybe it does, maybe it doesn't. Same goes for stock markets and crypto currencies.
  - 5y ago
GuB-42 5y ago
Tesla charges $10k for not really self driving, with the promise that it will improve, and you should buy it now, because the price will increase in the future. I.e. they make you pay for something you don't have, with no guarantee that you will have it later. If it isn't a money grab, I don't know what is. And of course you can take a loan on that, so it isn't an upfront cost either. At least, with VW system, you pay when you use it. Doesn't work in your area, you don't pay. And if you realize that you can't pay, you can simply drive, your car won't turn into a brick. And of course it is to extract more money from consumers, that's the goal of every company. But personally I find VW approach more honest than Tesla's. The best would be to offer working self driving out of the box, with no promises and no recurring fees, but the reality is that we don't have the tech yet. Note that I don't have anything against the $10k package from Tesla except for the way it is advertised. If they just sold you an advanced supercruise, there would be no problem. But they also sell you the idea that your car will fully drive itself in the future and that you are making an investment. Kind of like a Kickstarter, except it is a trillion dollar company, not a bunch of people in a basement.
- dmitriid 5y ago
  > At least, with VW system, you pay when you use it. Doesn't work in your area, you don't pay. "AWS has billed us tens of thousands of dollars because we forgot to turn something off/confusing billing" hasn't taught anyone anything? There's nothing honest about VW's approach. They won't have self-driving either, it will be at best the same as Tesla's. And yet, they want to charge you, and charge you significantly more than 10k upfront (because they expect to extract this payment every time, all the time, for the entire lifetime of the car).
  - iso1210 5y ago
    That's the same argument against software-as-a-service Maybe I'm not bothered about self driving for 90% of my journeys, but on occasion I'm going somewhere unusual or want to travel overnight or after drinking or whatever I'll just pay for a few hours. Imagine a world where there was just a set fee of $x per hour and $x per mile to travel. Would allow a far easier choice between different modes of transport, as the marginal cost becomes the actual cost. (Of course self driving is years away so this is all just spin)
Hinrik 5y ago
> The average person in the northeast spends 31 minutes commuting per day [2], for simplicity that's 0.5 hours,* 2 commutes a day, * 5 days a week, * 50 weeks a year (assuming 2 weeks vacation), is 250 hours commuting a week. You already said it's 31 minutes of commuting per day, so why are you doubling it in your subsequent calculation?
- rubyn00bie 5y ago
  Did you go to the source? It’s 31 minutes commuting to work, most people, I believe, tend to commute back from work too. It could have been more clear, but it’s hardly difficult to understand.
NicoJuicy 5y ago
You could be wrong and he could be wrong. Every company will try to extract money from their customers and market normally decides who is correct. I see cost optimalisation for some people and none for most.
afarrell 5y ago
Who is responsible for maintenance of the car and the AI software? If the passenger should be doing the updates to the AI, then they should own the car outright and have the right to repair it. If it is VW, then VW should align incentives well towards software maintenance by charging either an hourly or a monthly rate.
teachingassist 5y ago
Yours is an anti-capitalist take which I don't see as a criticism of VW specifically here. The reason this service can potentially exist is only because Tesla is charging such a high upfront cost, and because it may be more accessible (or indeed cheaper) for some people to rent on a pay-as-you-go basis. "This is 100% a way to extract more money from consumers" is true of literally everything that every corporation does. That's the point of its existence. Are they spinning it to sound good? Of course, that's part of the job. Do you have to take the service if it provides no additional benefit to you? No, you can still buy a Tesla (or not).
slver 5y ago
> This is completely disingenuous at best, and malicious at worst. This is a perfect example of the boots theory of socioeconomic unfairness [1]. This is just taking advantage of the poor-middle class' inability to pay a larger upfront cost, to extort them for more over a larger period of time. Self-driving is going to be a service. It'll never be "done". Let's be very clear about this. So what's actually is happening is Tesla charges you for something it can't give you yet, and something that will require ongoing maintenance i.e. you'd be paying a subscription in the long run again (just wait and see). VW just starts with the right model from the get go and doesn't set you back $10K on empty promises. Who is "completely disingenuous" here?
andi999 5y ago
So the hourly fee is only on the surcharge? And one still needs to pay for the car? Or if the car costs 20k, plus 10k surcharge it is more like 13 years until the rent reaches the price. Also what about insurance and maintainence?
chiefalchemist 5y ago
I see your point but I think you have to factor in: 1) The driver's time. If I can read on my way to work, that's a win. Price effectively reduced. 2) Time saved not getting an oil change, new tires, other maintenance, etc. Price drops a bit more. 3) I don't have to buy a "family sized" car that's only fully utilized a small percentage of the time. That over-pay / under-realized has a cost associated with it. Instead, I simply hail what I need when I need it. 4) Along the same lines as #1, family QT increases when I use a family vehicle. 5) When I'm able to rightly size my vehicle, there are eco savings as well. 6) Or perhaps I'm too old to drive and owning a car doesn't make sense either. If someone else has to shuttle me around, their time is a cost. Again. I agree. Companies profit from some products and markets more than others. That said, these vehicles and biz models are not the past and can - and will? - change the future.
- SamBam 5y ago
  I think you're missing what the post was about. 2, 3 and 5 seem to assume VW is talking about renting the car, but it's about subscribing to the self-driving feature. 1, 4 and 6 are the same for either buying or subscribing the service.
  - chiefalchemist 5y ago
    Ok. Fair enough. I'll swing again... If you're buying a VW...alreaady a heft sum, tacking on some added fee and saying that it's disadvantageous the disadvantaged feel like a stretch.
lordnacho 5y ago
> This is just taking advantage of the poor-middle class' inability to pay a larger upfront cost, to extort them for more over a larger period of time. Is it unreasonable, though? I can sell you access to my blog articles as they come out, or I can sell you access to all future articles, in one lump sum, now? Both of those have pros and cons. I'm sure someone will come up with a different payment model (indeed Tesla already has?) and if it makes a difference to people, they can vote with their wallets? It would be worrying if there were only one option. You're right about why the firms do it, of course. They want to extract as much money as they can. But there's also some value in being able to get anything at all, isn't there? Eg I can rent a seat on a plane, but most people can't buy a plane. It's expensive to be poor, as they say. The biggest example is of course rent vs buy a house. But also things like being able to buy bulk toilet roll has a net effect on the cost.
nabla9 5y ago
How about compared to typical American car loan?
varjag 5y ago
Yes seriously this is A level BS. I in fact own an ID.4 Max, and while it's a swell car you hardly save much buying this over a same class Tesla 3/Y where I live. It's clear that the autonomous driving has to execute locally on the car, so there is no physical basis to any "cost saving" other than sales mechanism optimization. Boo.
- SamBam 5y ago
  At the same time it's clear that autonomous driving is something that's going to need to be continually improved with over-the-air updates. This isn't a subscription for heated seats, it's something that you want them continually developing, month-in and month-out, and continually updating maps and stuff.
  - varjag 5y ago
    I'm fine with buying their software outright at the cost ammortized over multi-million car fleets. We're talking single-digit thousands of dollars worst case.
saturdaysaint 5y ago
These are early adopter products that are, for some good reasons, expressly aimed at a fairly small subset of wealthy and technologically inclined people. Given the nascent state of the technology and the extremely high liability, they probably wouldn't want all of their customers to drive this even if it was magically cheap. In the medium run, like GPS technology, competition will drive the cost of autonomy down to practically nothing and it will be enjoyed by working class people for free.
Damogran6 5y ago
When I commuted downtown, it was $15 for parking, $6 in gas, and about 90 minutes round trip...so an additional $12.75? Not to get into hourly wages, but it doesn't sit right when X% of your day is spent simply paying off your ride to work.
wutbrodo 5y ago
> This is just taking advantage of the poor-middle class' inability to pay a larger upfront cost, to extort them for more over a larger period of time. How on earth is charging more money for a lower upfront cost "extortion"? If you remove the option, you're not magically granting people the upfront cost, you're just cutting them off from access at all. Are you not aware of the time value of money?
aqme28 5y ago
Meanwhile, I'm a below-average car user. It would make much more sense for me to use this subscription plan. Just because it isn't economical for the "average" consumer doesn't mean there isn't a large and profitable niche.
ridethebike 5y ago
I'm not sure what the problem is. Isn't extracting more money the point of basically every company? Over the course of last 7 years living in NY I paid for rentals + uber + taxis way more than if I just bought a car in the beginning. Yet I'm going to buy a car anyway, it's simply too much hassle.
aeturnum 5y ago
I agree that only selling self-driving as a subscription is exploitative, but I generally disagree with your analysis of which model is better for consumers. First, the subscription model means that VW has an incentive to maintain the feature. Ofc, Tesla has been very generous with updates so far (even to older models!) but the key word is 'generous.' Once you've paid 10k (or more in the future) they have your money and you are at their mercy. You're correct that, if you wanna self-drive everywhere, the subscription will eventually be a bad deal. But I think Tesla's approach actually keeps a lot more people from taking advantage than VW - because $10k is a lot of money! $8.50/hr is pretty reasonable for, say, a couple that wants to make out on their way to dinner or a parent who needs to keep their kids from fighting. These people don't self drive everywhere, but the option to pay for a bit of self driving is nice. Or, to put it another way, whether or not Tesla's 10k charge is taking advantage of consumers "less" is based on usage and follow-through. You need a little over 1,000 hours of self-driving to get that 10k charge down to below VW's price of $8.50/hr and Tesla has said the $10k is gonna go up. So if you buy it and you ever stop using it within the first ~4.5 years, you are spending more compared to VW.
davedx 5y ago
I dunno, you don’t need FSD like you need boots - it’s a luxury. I don’t think this is a bad idea at all. I consider in many ways VW to be the only real competition to Tesla (vertical integration, fully modular powertrain, etc), so it’s fantastic they are considering offering FSD under a different pricing model. Whether they actually have the deep technical expertise to implement a FSD worth paying 8/hour for remains to be seen. They seem to also be copying Musk’s aggressive timelines.
midhhhthrow 5y ago
You don’t have to use it ALL the time, right? I mean just use it for two hours a year and you’ll pay a lot less than thousands of dollar up front
headmelted 5y ago
Honestly I think they're both fairytales at this point. Tesla is WAY further away from fully autonomous driving than they're letting on to their customers, probably because a lot of people would demand refunds on their FSD charges if they knew there was a good chance it wouldn't arrive before the car's end of life in the best case. Volkswagen's plan here is just as ridiculous. Autonomous driving is economically impossible to make work on a pay-as-you-go model. Who's going to front the cost for all the tech required in the car to allow for automated driving? Volkswagen? the customer? What if the customer doesn't want automated driving - they're not going to just give you an extra few tens of thousands of dollars for a feature they don't want and would still need to pay extra for anyway. If VW eats the cost then they'll go out of business making crazy expensive cars that people won't pay to reimburse. (Are you going to pay $8 for every small run in the car anytime you need to go to the shop for something?) Just copy Waymo and Uber in terms of model (i.e. robotaxi) if you're going to do automated driving. At least that way the cars are consistently in use and generating revenue to cover their eye-watering BOM cost.
- iamgopal 5y ago
  As with everything else, quite soon price of hardware required for fully autonomous driving will go down exponentially. While software to support the same will keep increasing. Hence VW action fully justified.
  - headmelted 5y ago
    I don’t see how that’s possible. If VW had: 1) a fleet of fully autonomous vehicles. (2) running for years gathering training data. (3) all over the world. They would still have a really long way to go to catch up with Tesla - who are still (according to their recent statements to regulators) not even close.
michaelmrose 5y ago
Supposedly an average of 293 hour per year or almost 25k over 10 years. They also want to disable part of the battery and rent it back to you too. We ought wait until they manufacture them then ban import and hope they go bankrupt.
yuliyp 5y ago
I think this type of pricing aligns incentives better than what Tesla is doing. With Tesla's model, if you don't get what you expected out of the self driving features, sorry, but they already have your money. With VW, they're incentivized to continue improving it and convincing people to use it, since it's more money in their pocket if they do.
deleted 5y ago
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chewz 5y ago

I agree with you. But this system is called capitalism for a reason. If you do not have capital you loose...

nix23 5y ago
But it's called Volkswagen for a reason too ;)
- chewz 5y ago
  The name is from the other era ;-) https://en.wikipedia.org/wiki/Volkswagen#1932%E2%80%931938:_People's_Car_project https://en.wikipedia.org/wiki/Volkswagen#1932%E2%80%931938:_...
  - nix23 5y ago
    The Name "Germany" is from a much different era too ;) >The English word Germany derives from the Latin Germania, which came into use after Julius Caesar adopted it for the peoples east of the Rhine https://en.wikipedia.org/wiki/Germany#Etymology https://en.wikipedia.org/wiki/Germany#Etymology
IncRnd 5y ago
Don't forget to make your payment for having commented today.

usrnm 5y ago

And you've just described a modern SaaS service

milchek 5y ago

Well said, and I think the idea that in the future people will own less and rent more is discussed quite often. In the tech space this has been true for some time, hell, I still remember buying a version of Adobe Master Suite and later lamenting at the switch to subscription model. I used to be quite negative about of going further down this path, but the way I see it now, what choice do we have in the future? The world population is growing, resources are limited. Is it it feasible that we can all own houses, multiple cars, gadgets etc? I don't know anymore what the 'right' approach is here. Do we allow people to own and consume as much as they want forever or will the future be radically different in this sense where no one owns anything (car, property or gadgets)? The model that works now may not work forever. Curious to hear from someone more well versed in this kind of topic on their thoughts?

xivzgrev 5y ago
How is autonomous driving an increasingly scarce resource? The tech industry, with zero marginal cost, took to the subscription model with great success. Hugely profitable. Now every business looks to work in subscriptions. I think what we will end up having is that initial players to offer autonomous driving will be able to charge, because it’s scarce and to recoup investment. Eventually the tech will get commoditized as computers grow ever more powerful, and someone will offer a car with free autonomous driving in order to sell more cars. Subscriptions make the most sense for stuff you buy regularly, and stuff that can’t be monetized other ways (like Netflix). Car manufacturers are neither. Plus they have to compete with likes of Waymo and Uber - are they going to want to charge $8.50 an hr, plus the cost of gas, car, insurance etc, when I could take a self driving Uber for $20/hr?
- CorrectHorseBat 5y ago
  >How is autonomous driving an increasingly scarce resource? Space is the scarce resource. In a city that's full of 90% of the time parked cars it doesn't really make sense for everyone to have their own car. Autonomous driving just combines the best of Uber and car sharing.
  - 5y ago

danuker 5y ago

> inability to pay a larger upfront cost, to extort them for more over a larger period of time. I say, the more competition for banks, the better.

JumpCrisscross 5y ago

> This is 100% a way to extract more money from consumers, especially non financially stable consumers, while lying to all of our faces Isn't this hyperbolic? I split time between at least two cities. Being able to pay as I go represents a real saving in cost, time and attention. Sometimes buying is better than renting. But sometimes there are economies of centralization. AWS isn't a scam on companies too poor to buy servers.

nix23 5y ago
>AWS isn't a scam on companies too poor to buy servers. It often is, for small and medium business (traditional ones) it's often cheaper to rent DC-Space and buy some servers yourself...but hey if you pay and don't do the math, that's your problem.
- DaiPlusPlus 5y ago
  Physical co-lo is only cheaper if your time is worthless (ditto for Linux-on-the-corporate-desktop, or anything else that’s nominatively gratis). My current SaaS gig runs in Azure (App Services and containers - no VMs nor “serverless”) and being completely free of the need to do sysadmin work is just so nice. When I was colocating my own rack about a decade ago there was always something that needed my attention, be it security updates, some new unexpected error in the syslogs, RAID drive failing, etc - that I’d need to commute to the DC an hour away or pay the DC’s helping-hands fees. Back when I was younger it was fun and valuable to gain those experiences, but right now I’m a west-coast SWE and no employer wants me to spend my time doing sysadmin/SRE work when my time is literally worth ten times more doing product work and letting MS’ Azure staff keeping things humming along. For high-availability, AWS/Azure/GCP all the way! There’s no way a micro-ISV SaaS vendor can compete if they have to burn cycles doing unprofitable infrastructure work.
  - jjav 5y ago
    > Physical co-lo is only cheaper if your time is worthless Physical colocation is nearly always cheaper than AWS for most use cases. Exceptions are when your usage is so tiny that it doesn't need even a single full-time server, and, when your usage is so erratic that provisioning for the spikes doesn't make sense. For everyone else, you're paying a very large premium for AWS over what it'd cost to buy and operate some servers.

tchalla 5y ago

I’d me interested to see this math for subscriptions like Netflix, Spotify and AWS.

stefan_ 5y ago

What do you call a model where you sell "fully self driving capable hardware" that isn't not once, but about 2.5 times?

toss1 5y ago

If there were no way to turn it off so any driving cost $8.50/hr, I'd be with you. But if it can be turned off and I can just drive as today as with a normal car, and I'm not paying any extra for the idle feature set, where's the problem? With the current state of autonomous driving, I'd never use it anyway. No feature I've read about is good enough to just sleep in the backseat. Expecting the driver to be 90%+ idle then, when the "autopilot" fails and I must get instantly up to speed on the full context and state of the car, is both a recipe for disaster and would make me a very nervous driver/passenger (especially when I know that it would fail to recognize things like a semi-truck parked sideways across the road or a lane-splitting concrete barrier dead-ahead). When and if a true and trustworthy autopilot is available, I'd likely prefer a per hour charge. I'd use it only when I really needed it, such as when I really need the time to keep working on this commute, or I'm really tired and think it's safer to be driven home. As long as there is variety available in the market, this seems like a find option to have. At some point, when I find myself using it a lot, then it's time to go out and buy a car like a Tesla where it's just included as a package. Of course, if VW are smart, they'll also offer a single-price or monthly fee 'Full-Time Self-Drive' package, so I don't need to go to a competitor to get it. OTOH, if the industry starts to look like internet security cameras or thermostats, where the there is nothing but a subscription, or televisions where there is almost no way to just get a non-'connected' monitor, I'm totally with you -- this would be a horrible example of exploitative, extractive, rent-seeking corporate behavior.

soco 5y ago
I'm afraid the single model market is the way of the future. Why wouldn't VW bank on the same enslaving system all other corporations so easily get away with? Other commenters talk about going to the competition if we're unhappy - except the entire competition does exactly the same so there's no alternative. A market opening, would say some? No there's none, the subscription model is too profitable for any CEO to even bother imagining an alternative.
- toss1 5y ago
  Sadly, you're probably right, some kind of quasi-Nash Equilibrium local maxima that sucks for everyone.

Mashimo 5y ago

Could be decent for people who only want to use autonomous driving on occasion, not with every commute. Keep in mind this is a German taking to a German magazine, US business model might be different (But probably not)

devoutsalsa 5y ago
Yeah, I don’t own a car, but I easily could. 7 euros per hour is cheaper than any car I could rent for a few hours, and cheaper than almost any ride share option. The only place I’ve been where calling a ride share would maybe be cheaper is Pakistan.
- anastalaz 5y ago
  You would still have to buy the car. The 7 euros is just for using the autopilot feature.
  - devoutsalsa 5y ago
    Ah. I clearly missed the point of the article.

dvfjsdhgfv 5y ago

> This is just taking advantage of the poor-middle class' inability to pay a larger upfront cost, to extort them for more over a larger period of time. At least you still have a choice. In the software world, this freedom of choice is coming to an end, with Microsoft, Adobe, Autodesk and many others discontinuing "pay once own forever" products.

GekkePrutser 5y ago
The same will happen to other markets if we don't vote with our wallets. Philips is already planning to offer "Light as a service" to consumers. Citing circularity concerns, after all the incentive is now on them to make lightbulbs last as long as possible rather than as short as possible. But really it means they've been cheating us with planned obsolescence for years. I really don't want to be dependent on monthly contracts for every little thing. Never. I spend 20 euros per year on lightbulbs and I have a lot of smart ones. I'm sure any subscription plan won't be that cheap. Because the whole point of subscription models is for the company to make lots of money while doing nothing.

jbverschoor 5y ago

So a car is free to operate? No fuel/electricity No road tax No insurance No maintenance

SamBam 5y ago
No, they're talking about a subscription model for a feature. Read the article.
- jbverschoor 5y ago
  You're right.

estaseuropano 5y ago

Locally a new ID.4 costs somewhere around €40-60k. Does VW really want me to spend €40k+ on a car, pay all maintenance, all insurance, all electricity, storage/parking, charging infrastructure, etc and then still pay 8€ per hour to use a main feature of the car? If I do a 5h drive it would be cheaper to pay the train instead of taking the car I have bought. Absolutely mad.

GekkePrutser 5y ago

You mean 250 hours a year, not a week. But 31 minutes commuting per day is super low, that's 15 minutes each way. I doubt that is really the average to be honest. Of course with the pandemic commuting is not a big time sink anymore but I wonder how permanent this will be.

gspr 5y ago
Yeah. I usually think that Americans have an insane tolerance for commuting, but 31 minutes per day is nothing! 15 minutes door-to-door to work is pretty fantastic — so fantastic that I too doubt that it's the average in the US northeast. Does this average perhaps count people who aren't working as having zero commute?
- Firadeoclus 5y ago
  There is no indication that 31 minutes is per day, so I'd assume it's one way.
  - gspr 5y ago
    Ah yes, I see now that it literally says "to work". Thanks!
  - GekkePrutser 5y ago
    But then the calculation on a yearly basis doesn't make sense, it'd have to be doubled.
    - Firadeoclus 5y ago
      hyperhopper wrote "* 2 commutes a day".
arriu 5y ago
That average does seem quite low... However, I do live in the greater Toronto area and we're known for having terrible traffic. My pre-covid daily work commute was 2-3 hours on the 401.

jbjbjbjb 5y ago

Well maybe the daily commute isn’t light usage and therefore isn’t the best case for pay as you go. There are plenty of other use cases that fit really nicely, replacing a taxi for a night out, occasional long journeys, times when you’re feeling too tired to drive. But having said that, I don’t see why we wouldn’t just expect to go autonomous all the time. Free or included in the price autonomous driving would be an obvious opportunity for any competitors.

pappyo 5y ago

You're not capturing all the expenses to car ownership: Insurance Fuel/charging Excise tax Parking Maintenance Cleaning And most importantly, the hassel to deal with the above.

incompatible 5y ago
If I understand it correctly, that would be the fee for the self-driving feature, not the entire car. I suppose $8.50 per hour would be a reasonable rate for a car rental, although daily rates should be less.

agilob 5y ago

Bill Gates says people shouldn't own land, should always rent. That another company from US (forgot name) that buys houses for 50% higher asking price, now this. These days we rent books, games, flats, soon we'll rent homes and cars. No need to own anything when you can pay more money to rent it.

manquer 5y ago
Sure it this encourages rent seeking behavior and has impact on the your long term wealth. However if your able to derive utility from the product by renting why should you buy ? It is inefficient way to produce and consume goods. As a society we already waste too much by buying and hardly using things. Libraries are great way to reduce the number of actual books printed. Most people don't read most books , having a large unread personal collection is common vanity spend people usually do, which is really a waste of resources. Many people rent camera/lens when they need them instead of buying expensive gear which is rarely used , these are efficiencies that are good to have. Not all renting is bad
- agilob 5y ago
  >As a society we already waste too much by buying and hardly using things. Yes, but there are things like car or house that are used daily
imtringued 5y ago
>Bill Gates says people shouldn't own land, should always rent. Private ownership of land doesn't work because land value goes up even with no input of the land owner. https://upload.wikimedia.org/wikipedia/commons/a/aa/Everybody_works_but_the_vacant_lot_%28cropped%29.jpg https://upload.wikimedia.org/wikipedia/commons/a/aa/Everybod... You are free to own the house and car.
- rootlocus 5y ago
  Maybe it does, maybe it doesn't. Same goes for stock markets and crypto currencies.
- 5y ago

GuB-42 5y ago

Tesla charges $10k for not really self driving, with the promise that it will improve, and you should buy it now, because the price will increase in the future. I.e. they make you pay for something you don't have, with no guarantee that you will have it later. If it isn't a money grab, I don't know what is. And of course you can take a loan on that, so it isn't an upfront cost either. At least, with VW system, you pay when you use it. Doesn't work in your area, you don't pay. And if you realize that you can't pay, you can simply drive, your car won't turn into a brick. And of course it is to extract more money from consumers, that's the goal of every company. But personally I find VW approach more honest than Tesla's. The best would be to offer working self driving out of the box, with no promises and no recurring fees, but the reality is that we don't have the tech yet. Note that I don't have anything against the $10k package from Tesla except for the way it is advertised. If they just sold you an advanced supercruise, there would be no problem. But they also sell you the idea that your car will fully drive itself in the future and that you are making an investment. Kind of like a Kickstarter, except it is a trillion dollar company, not a bunch of people in a basement.

dmitriid 5y ago
> At least, with VW system, you pay when you use it. Doesn't work in your area, you don't pay. "AWS has billed us tens of thousands of dollars because we forgot to turn something off/confusing billing" hasn't taught anyone anything? There's nothing honest about VW's approach. They won't have self-driving either, it will be at best the same as Tesla's. And yet, they want to charge you, and charge you significantly more than 10k upfront (because they expect to extract this payment every time, all the time, for the entire lifetime of the car).
- iso1210 5y ago
  That's the same argument against software-as-a-service Maybe I'm not bothered about self driving for 90% of my journeys, but on occasion I'm going somewhere unusual or want to travel overnight or after drinking or whatever I'll just pay for a few hours. Imagine a world where there was just a set fee of $x per hour and $x per mile to travel. Would allow a far easier choice between different modes of transport, as the marginal cost becomes the actual cost. (Of course self driving is years away so this is all just spin)

Hinrik 5y ago

> The average person in the northeast spends 31 minutes commuting per day [2], for simplicity that's 0.5 hours,* 2 commutes a day, * 5 days a week, * 50 weeks a year (assuming 2 weeks vacation), is 250 hours commuting a week. You already said it's 31 minutes of commuting per day, so why are you doubling it in your subsequent calculation?

rubyn00bie 5y ago
Did you go to the source? It’s 31 minutes commuting to work, most people, I believe, tend to commute back from work too. It could have been more clear, but it’s hardly difficult to understand.

NicoJuicy 5y ago

You could be wrong and he could be wrong. Every company will try to extract money from their customers and market normally decides who is correct. I see cost optimalisation for some people and none for most.

afarrell 5y ago

Who is responsible for maintenance of the car and the AI software? If the passenger should be doing the updates to the AI, then they should own the car outright and have the right to repair it. If it is VW, then VW should align incentives well towards software maintenance by charging either an hourly or a monthly rate.

teachingassist 5y ago

Yours is an anti-capitalist take which I don't see as a criticism of VW specifically here. The reason this service can potentially exist is only because Tesla is charging such a high upfront cost, and because it may be more accessible (or indeed cheaper) for some people to rent on a pay-as-you-go basis. "This is 100% a way to extract more money from consumers" is true of literally everything that every corporation does. That's the point of its existence. Are they spinning it to sound good? Of course, that's part of the job. Do you have to take the service if it provides no additional benefit to you? No, you can still buy a Tesla (or not).

slver 5y ago

> This is completely disingenuous at best, and malicious at worst. This is a perfect example of the boots theory of socioeconomic unfairness [1]. This is just taking advantage of the poor-middle class' inability to pay a larger upfront cost, to extort them for more over a larger period of time. Self-driving is going to be a service. It'll never be "done". Let's be very clear about this. So what's actually is happening is Tesla charges you for something it can't give you yet, and something that will require ongoing maintenance i.e. you'd be paying a subscription in the long run again (just wait and see). VW just starts with the right model from the get go and doesn't set you back $10K on empty promises. Who is "completely disingenuous" here?

andi999 5y ago

So the hourly fee is only on the surcharge? And one still needs to pay for the car? Or if the car costs 20k, plus 10k surcharge it is more like 13 years until the rent reaches the price. Also what about insurance and maintainence?

chiefalchemist 5y ago

I see your point but I think you have to factor in: 1) The driver's time. If I can read on my way to work, that's a win. Price effectively reduced. 2) Time saved not getting an oil change, new tires, other maintenance, etc. Price drops a bit more. 3) I don't have to buy a "family sized" car that's only fully utilized a small percentage of the time. That over-pay / under-realized has a cost associated with it. Instead, I simply hail what I need when I need it. 4) Along the same lines as #1, family QT increases when I use a family vehicle. 5) When I'm able to rightly size my vehicle, there are eco savings as well. 6) Or perhaps I'm too old to drive and owning a car doesn't make sense either. If someone else has to shuttle me around, their time is a cost. Again. I agree. Companies profit from some products and markets more than others. That said, these vehicles and biz models are not the past and can - and will? - change the future.

SamBam 5y ago
I think you're missing what the post was about. 2, 3 and 5 seem to assume VW is talking about renting the car, but it's about subscribing to the self-driving feature. 1, 4 and 6 are the same for either buying or subscribing the service.
- chiefalchemist 5y ago
  Ok. Fair enough. I'll swing again... If you're buying a VW...alreaady a heft sum, tacking on some added fee and saying that it's disadvantageous the disadvantaged feel like a stretch.

lordnacho 5y ago

> This is just taking advantage of the poor-middle class' inability to pay a larger upfront cost, to extort them for more over a larger period of time. Is it unreasonable, though? I can sell you access to my blog articles as they come out, or I can sell you access to all future articles, in one lump sum, now? Both of those have pros and cons. I'm sure someone will come up with a different payment model (indeed Tesla already has?) and if it makes a difference to people, they can vote with their wallets? It would be worrying if there were only one option. You're right about why the firms do it, of course. They want to extract as much money as they can. But there's also some value in being able to get anything at all, isn't there? Eg I can rent a seat on a plane, but most people can't buy a plane. It's expensive to be poor, as they say. The biggest example is of course rent vs buy a house. But also things like being able to buy bulk toilet roll has a net effect on the cost.

nabla9 5y ago

How about compared to typical American car loan?

varjag 5y ago

Yes seriously this is A level BS. I in fact own an ID.4 Max, and while it's a swell car you hardly save much buying this over a same class Tesla 3/Y where I live. It's clear that the autonomous driving has to execute locally on the car, so there is no physical basis to any "cost saving" other than sales mechanism optimization. Boo.

SamBam 5y ago
At the same time it's clear that autonomous driving is something that's going to need to be continually improved with over-the-air updates. This isn't a subscription for heated seats, it's something that you want them continually developing, month-in and month-out, and continually updating maps and stuff.
- varjag 5y ago
  I'm fine with buying their software outright at the cost ammortized over multi-million car fleets. We're talking single-digit thousands of dollars worst case.

saturdaysaint 5y ago

These are early adopter products that are, for some good reasons, expressly aimed at a fairly small subset of wealthy and technologically inclined people. Given the nascent state of the technology and the extremely high liability, they probably wouldn't want all of their customers to drive this even if it was magically cheap. In the medium run, like GPS technology, competition will drive the cost of autonomy down to practically nothing and it will be enjoyed by working class people for free.

Damogran6 5y ago

When I commuted downtown, it was $15 for parking, $6 in gas, and about 90 minutes round trip...so an additional $12.75? Not to get into hourly wages, but it doesn't sit right when X% of your day is spent simply paying off your ride to work.

wutbrodo 5y ago

> This is just taking advantage of the poor-middle class' inability to pay a larger upfront cost, to extort them for more over a larger period of time. How on earth is charging more money for a lower upfront cost "extortion"? If you remove the option, you're not magically granting people the upfront cost, you're just cutting them off from access at all. Are you not aware of the time value of money?

aqme28 5y ago

Meanwhile, I'm a below-average car user. It would make much more sense for me to use this subscription plan. Just because it isn't economical for the "average" consumer doesn't mean there isn't a large and profitable niche.

ridethebike 5y ago

I'm not sure what the problem is. Isn't extracting more money the point of basically every company? Over the course of last 7 years living in NY I paid for rentals + uber + taxis way more than if I just bought a car in the beginning. Yet I'm going to buy a car anyway, it's simply too much hassle.

aeturnum 5y ago

I agree that only selling self-driving as a subscription is exploitative, but I generally disagree with your analysis of which model is better for consumers. First, the subscription model means that VW has an incentive to maintain the feature. Ofc, Tesla has been very generous with updates so far (even to older models!) but the key word is 'generous.' Once you've paid 10k (or more in the future) they have your money and you are at their mercy. You're correct that, if you wanna self-drive everywhere, the subscription will eventually be a bad deal. But I think Tesla's approach actually keeps a lot more people from taking advantage than VW - because $10k is a lot of money! $8.50/hr is pretty reasonable for, say, a couple that wants to make out on their way to dinner or a parent who needs to keep their kids from fighting. These people don't self drive everywhere, but the option to pay for a bit of self driving is nice. Or, to put it another way, whether or not Tesla's 10k charge is taking advantage of consumers "less" is based on usage and follow-through. You need a little over 1,000 hours of self-driving to get that 10k charge down to below VW's price of $8.50/hr and Tesla has said the $10k is gonna go up. So if you buy it and you ever stop using it within the first ~4.5 years, you are spending more compared to VW.

davedx 5y ago

I dunno, you don’t need FSD like you need boots - it’s a luxury. I don’t think this is a bad idea at all. I consider in many ways VW to be the only real competition to Tesla (vertical integration, fully modular powertrain, etc), so it’s fantastic they are considering offering FSD under a different pricing model. Whether they actually have the deep technical expertise to implement a FSD worth paying 8/hour for remains to be seen. They seem to also be copying Musk’s aggressive timelines.

midhhhthrow 5y ago

You don’t have to use it ALL the time, right? I mean just use it for two hours a year and you’ll pay a lot less than thousands of dollar up front

headmelted 5y ago

Honestly I think they're both fairytales at this point. Tesla is WAY further away from fully autonomous driving than they're letting on to their customers, probably because a lot of people would demand refunds on their FSD charges if they knew there was a good chance it wouldn't arrive before the car's end of life in the best case. Volkswagen's plan here is just as ridiculous. Autonomous driving is economically impossible to make work on a pay-as-you-go model. Who's going to front the cost for all the tech required in the car to allow for automated driving? Volkswagen? the customer? What if the customer doesn't want automated driving - they're not going to just give you an extra few tens of thousands of dollars for a feature they don't want and would still need to pay extra for anyway. If VW eats the cost then they'll go out of business making crazy expensive cars that people won't pay to reimburse. (Are you going to pay $8 for every small run in the car anytime you need to go to the shop for something?) Just copy Waymo and Uber in terms of model (i.e. robotaxi) if you're going to do automated driving. At least that way the cars are consistently in use and generating revenue to cover their eye-watering BOM cost.

iamgopal 5y ago
As with everything else, quite soon price of hardware required for fully autonomous driving will go down exponentially. While software to support the same will keep increasing. Hence VW action fully justified.
- headmelted 5y ago
  I don’t see how that’s possible. If VW had: 1) a fleet of fully autonomous vehicles. (2) running for years gathering training data. (3) all over the world. They would still have a really long way to go to catch up with Tesla - who are still (according to their recent statements to regulators) not even close.

michaelmrose 5y ago

Supposedly an average of 293 hour per year or almost 25k over 10 years. They also want to disable part of the battery and rent it back to you too. We ought wait until they manufacture them then ban import and hope they go bankrupt.

yuliyp 5y ago

I think this type of pricing aligns incentives better than what Tesla is doing. With Tesla's model, if you don't get what you expected out of the self driving features, sorry, but they already have your money. With VW, they're incentivized to continue improving it and convincing people to use it, since it's more money in their pocket if they do.

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