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If self-driving works it's inevitable that the market will transform from mostly selling cars to mostly providing robotaxi service. Robotaxi service has "winne

by kjksf 3y ago

If self-driving works it's inevitable that the market will transform from mostly selling cars to mostly providing robotaxi service. Robotaxi service has "winner takes most" dynamics, just like regular human-taxi service. Just look at how stable Uber and Lyft marketshare was over the years. Imagine company X drops 10 thousand robotaxis in San Francisco area. Anyone who cares to can get a taxi for half the price (or less) of regular taxi. Company Y develops self-driving technology 6 months later. There's just no way for company Y to re-take significant market share in San Francisco if their costs are similar to company X. They can drop 10 thousand cars but most San Franciscan who want such service already have app for service X installed and a habit of using it. Company Y might decide on (expensive) marketing campaign or price war but company X can do that as well. Company X can finance price war from profit but company Y must borrow. And there's only so much you can borrow. In US we saw this with Uber vs Lyft vs everyone else. Early market share of Uber proved to be bullet proof regardless of what Lyft tried to do. In China Uber was in a trench price warfare with Didi and when they didn't see a way to win, they decided to loose (and sold their business to Didi). So the winner of robotaxi market will be the first company that has a working self-driving software AND can produce millions of cars per year to capture the market.

TheAlchemist 3y ago
And yet, Uber is loosing money for pretty much their whole existence. I think we will get to robotaxis one day, most probably. I'm not sure though about the earnings power this will give to those companies.
- fragmede 3y ago
  That day is already here. Waymo's been providing robotaxi rides in San Francisco and Phoenix for a while, and soon, LA and Austin.
  - TheAlchemist 3y ago
    I thought that Waymo is 'almost' a robotaxi - in the sense that there is a remote operator that takes over when the car is stuck or it's getting dangerous. I think Cruise revealed the numbers about the % of time an operator takes over and it was surprisingly high - one intervention every 2.5-5 miles.
    - fragmede 3y ago
      it doesn't matter what the back end looks like. even if it's all just a call center in the Philippines driving the cars with playstation controllers, on the customer end, there's an app, and it summons a car with no driver in it, and it takes me to my destination. Their profitability relies on just how much that call center needs to get paid, so it's in their interests to drive that down, and have it be real, but that's their business. As a customer, all I know is that there's a competitor to Uber/Lyft called Waymo, and it's better and worse in specific ways. No driver means no having to deal with a person. If I'm sending a girlfriend home late at night, she doesn't need to get into a strangers car. the driver could be drinking or hit on her or whatever. robo taxi isn't going to do that, even if it's a call center in the Philippines.
      - TheAlchemist 3y ago
        Ok, that's not what I call a 'real' Robotaxi. If the operator needs to intervene maybe once per 100 miles then I would consider we're close. Re profitability - yes, but if there is more than one companies, they will just drive down the margins. I don't see how it will generate billions frankly.
monooso 3y ago
This assumes Tesla wants to enter the taxi business. If they're just a supplier of robotaxis then a taxi company can choose to switch vendors. Plus, if the robotaxi business follows the Uber model where "partners" supply their own cars, there isn't even a primary vendor in the first place.
- ArtTimeInvestor 3y ago
  Either way, Tesla cars will become robotaxis at some point. If a robotaxi does 10 rides for $15 per day, that's $15x10x365=$54,750 per year. If operating the car costs $20k per year, that's $35k profit per year. It doesn't make sense to sell a car for $30K if it can make $35k in profit per year.

by kjksf 3y ago

TheAlchemist 3y ago

And yet, Uber is loosing money for pretty much their whole existence. I think we will get to robotaxis one day, most probably. I'm not sure though about the earnings power this will give to those companies.

fragmede 3y ago
That day is already here. Waymo's been providing robotaxi rides in San Francisco and Phoenix for a while, and soon, LA and Austin.
- TheAlchemist 3y ago
  I thought that Waymo is 'almost' a robotaxi - in the sense that there is a remote operator that takes over when the car is stuck or it's getting dangerous. I think Cruise revealed the numbers about the % of time an operator takes over and it was surprisingly high - one intervention every 2.5-5 miles.
  - fragmede 3y ago
    it doesn't matter what the back end looks like. even if it's all just a call center in the Philippines driving the cars with playstation controllers, on the customer end, there's an app, and it summons a car with no driver in it, and it takes me to my destination. Their profitability relies on just how much that call center needs to get paid, so it's in their interests to drive that down, and have it be real, but that's their business. As a customer, all I know is that there's a competitor to Uber/Lyft called Waymo, and it's better and worse in specific ways. No driver means no having to deal with a person. If I'm sending a girlfriend home late at night, she doesn't need to get into a strangers car. the driver could be drinking or hit on her or whatever. robo taxi isn't going to do that, even if it's a call center in the Philippines.
    - TheAlchemist 3y ago
      Ok, that's not what I call a 'real' Robotaxi. If the operator needs to intervene maybe once per 100 miles then I would consider we're close. Re profitability - yes, but if there is more than one companies, they will just drive down the margins. I don't see how it will generate billions frankly.

monooso 3y ago

This assumes Tesla wants to enter the taxi business. If they're just a supplier of robotaxis then a taxi company can choose to switch vendors. Plus, if the robotaxi business follows the Uber model where "partners" supply their own cars, there isn't even a primary vendor in the first place.

ArtTimeInvestor 3y ago
Either way, Tesla cars will become robotaxis at some point. If a robotaxi does 10 rides for $15 per day, that's $15x10x365=$54,750 per year. If operating the car costs $20k per year, that's $35k profit per year. It doesn't make sense to sell a car for $30K if it can make $35k in profit per year.