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I don't have strong opinions about self-driving cars in this context, but the pattern of this argument doesn't track: you can omit "self-driving" and the underl

I don't have strong opinions about self-driving cars in this context, but the pattern of this argument doesn't track: you can omit "self-driving" and the underlying premise is still the same (that companies have an incentive to lease rather than sell objects to capture service revenues). But the reality is that people do own cars, and no car manufacturer that I know is also trying to become a taxi operator (except maybe in the indirect investment sense). Or in other words: sales in a market aren't affected by the abstract possibility of vertical integration, because any entity that attempts to vertically integrate will be undercut by other parties making sales at the same time.

bluescrn 3y ago
The pattern is that hardware is sold but software is now rented, it must be a 'revenue stream', not a one-off sale. Cars were hardware. But now contain ever-increasing amounts of software. With self-driving cars, the software is the main feature.
- shagie 3y ago
  Software that is a one off sale is rarely profitable to do as that comes with the additional cost of updates and patches. The development cost of the updates and patches has to come from somewhere - either significantly marking up the initial purchase cost to fund the on going development (side bit: when a one time purchase server shuts down people are up in arms about that) or with some form of subscription model. If a driverless car maker can be liable for the software that they released some time ago and didn't update, then the funding of that development effort has to come from somewhere. If some of the compute or data updates is in the cloud, that comes with an ongoing cost. Compare with getting a DVD with a database of road updates once a year ( https://ford.navigation.com/product/Catalog/2023-Green-DVD-Map-Update/sku/Honda%20Green%202023/en_US/HondaNA/USD https://ford.navigation.com/product/Catalog/2023-Green-DVD-M... ) and the "this road is closed" ( https://www.wyoroad.info/pls/Browse/WRR.STATIC5?SelectedDistrict=1#Baggs https://www.wyoroad.info/pls/Browse/WRR.STATIC5?SelectedDist... ) or "there is heavy traffic, a different route is suggested" services. Those come with an ongoing cost somewhere.
  - gamblor956 3y ago
    Software sold as a one-off sale can be, and usually is, very profitable. See e.g., most software companies pre-SaaS-era. This is in fact how most software was sold...and is still sold today. SaaS is the plague on software development, because the subscription model demands a shift to constant feature "upgrades" and other frequently-useless "updates" intended to justify the perpetual subscription costs to customers.
tuatoru 3y ago
From the point of view of a maker and seller of cars, the incentive for self driving is that it increases the size of the market. Rather than just selling one car per adult in a family, it could sell one per adult and one per child. Car makers operating according to this incentive will try to discourage taxi-like functions in self-driving cars, perhaps by only allowing operation when specified people are recognized by the car (anti-theft feature!).

bluescrn 3y ago

The pattern is that hardware is sold but software is now rented, it must be a 'revenue stream', not a one-off sale. Cars were hardware. But now contain ever-increasing amounts of software. With self-driving cars, the software is the main feature.

shagie 3y ago
Software that is a one off sale is rarely profitable to do as that comes with the additional cost of updates and patches. The development cost of the updates and patches has to come from somewhere - either significantly marking up the initial purchase cost to fund the on going development (side bit: when a one time purchase server shuts down people are up in arms about that) or with some form of subscription model. If a driverless car maker can be liable for the software that they released some time ago and didn't update, then the funding of that development effort has to come from somewhere. If some of the compute or data updates is in the cloud, that comes with an ongoing cost. Compare with getting a DVD with a database of road updates once a year ( https://ford.navigation.com/product/Catalog/2023-Green-DVD-Map-Update/sku/Honda%20Green%202023/en_US/HondaNA/USD https://ford.navigation.com/product/Catalog/2023-Green-DVD-M... ) and the "this road is closed" ( https://www.wyoroad.info/pls/Browse/WRR.STATIC5?SelectedDistrict=1#Baggs https://www.wyoroad.info/pls/Browse/WRR.STATIC5?SelectedDist... ) or "there is heavy traffic, a different route is suggested" services. Those come with an ongoing cost somewhere.
- gamblor956 3y ago
  Software sold as a one-off sale can be, and usually is, very profitable. See e.g., most software companies pre-SaaS-era. This is in fact how most software was sold...and is still sold today. SaaS is the plague on software development, because the subscription model demands a shift to constant feature "upgrades" and other frequently-useless "updates" intended to justify the perpetual subscription costs to customers.

tuatoru 3y ago

From the point of view of a maker and seller of cars, the incentive for self driving is that it increases the size of the market. Rather than just selling one car per adult in a family, it could sell one per adult and one per child. Car makers operating according to this incentive will try to discourage taxi-like functions in self-driving cars, perhaps by only allowing operation when specified people are recognized by the car (anti-theft feature!).