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What's the exit here? They've raised over $10 billion at VC multiples, valuation around $50 billion. Do they expect this to be a $1 trillion company, even then

by bko 2y ago

What's the exit here? They've raised over $10 billion at VC multiples, valuation around $50 billion. Do they expect this to be a $1 trillion company, even then the return would be a modest 20x. I feel when that much money is at stake and such a high exit is expected, this could distort incentives. I feel like investors would prefer to set their money on fire for some tiny probability of that 20x+ return rather than look to actually make a modest profitable business

onion2k 2y ago
Do they expect this to be a $1 trillion company, even then the return would be a modest 20x. The ideal end game for self-driving taxis is replacing personally-owned cars. Instead of anyone having a car of their own they'd just order one for any journey they make. If ordering a taxi is easier and cheaper than owning a car, and potentially faster and safer because it's self-driving, it's a no brainer for anyone who sees a car as a cost rather than a recreational vehicle. If they manage to do that then Waymo will be significantly more valuable than a trillion dollars.
- 05 2y ago
  As long as US keeps the Chinese manufacturers out.. Baidu Apollo now has a $28K self driving vehicle [0], I doubt Waymo is ever getting close to those numbers. They might replace some US personal cars, but they won't be able to compete globally. edit: Waymo wanted to use Zeekr vehicles before, I guess that ship has sailed now - they will have to get by with their new Hyundai contract [1] [0] https://cnevpost.com/2024/05/15/baidu-apollo-launches-6th-gen-robotaxi/ https://cnevpost.com/2024/05/15/baidu-apollo-launches-6th-ge... [1] https://waymo.com/blog/2024/10/waymo-and-hyundai-enter-partnership/ https://waymo.com/blog/2024/10/waymo-and-hyundai-enter-partn...
  - RivieraKid 2y ago
    > I doubt Waymo is ever getting close to those numbers Why? In theory, Waymo should be able to copy everything Baidu is doing, e.g. manufacture in a low-labor-cost country like India. This is mainly about the technology, that's the hard problem. Optimizing the costs is something that has been done many times before and we know how to do it.
    - 05 2y ago
      At some point the technology is good enough, then the cheapest car wins. Waymo doesn't have vertical integration necessary to rapidly iterate and it can't afford to take risks - it's still not operating their commercial service on the highways, not because the tech isn't there, but because of the liability and PR damages if there's a fatal crash (much more likely at highway speeds). Baidu can have their test car kill a pedestrian every day for the next 10 years if necessary, that's not exactly an even playing field.
      - RivieraKid 2y ago
        Waymo is providing the self-driving AI, it's currently tied to a specific hardware, but it will become adaptable to a wide range of hardware. It will be used in both cheap and expensive cars. If the technology is good enough, it will work with cheap cars too. They will start using highways with regular passangers probably by the end of this year. Maybe Baidu can launch on highways with a 10x higher accident rate, but I don't think it's a significant advantage to the business.
  - Zigurd 2y ago
    When operations are scaled up and routine, robotaxis will have a short life, probably 3 years or less. Even at $100k/car every 3 years, that's probably 10% of LTV for the cars. Uber knows this. They just did not have the money or tech Alphabet could bring to bear.
    - echoangle 2y ago
      > When operations are scaled up and routine, robotaxis will have a short life, probably 3 years or less. Can you elaborate on this? Do you mean due to wear?
      - Zigurd 2y ago
        Yes, wear: Robotaxis will probably go farther in a day than full-time rideshare drivers, maybe by 2X or more. Plus sensors and on-board compute will advance quickly. Waymo is on their 6th generation. 10 sets of tires in that time would not be surprising. That many miles also bumps up against battery lifespan.
- zelda420 2y ago
  But aren’t most cars on the road at the same high traffic times? I need a ride a 9am and 5pm just like half the city. People keep talking about fleets being in demand and your Tesla becoming a taxi while you sit on your office but wouldn’t everyone else’s also?
Zigurd 2y ago
$1T is about 6X Uber's market cap. If you can do Uber with more capex, less opex, 6X seems very do-able.
minwcnt5 2y ago
Didn't Uber raise over $30 billion from VCs before going public? It seems likely that they could continue for many more years at the current burn rate or even higher.

by bko 2y ago

onion2k 2y ago

Do they expect this to be a $1 trillion company, even then the return would be a modest 20x. The ideal end game for self-driving taxis is replacing personally-owned cars. Instead of anyone having a car of their own they'd just order one for any journey they make. If ordering a taxi is easier and cheaper than owning a car, and potentially faster and safer because it's self-driving, it's a no brainer for anyone who sees a car as a cost rather than a recreational vehicle. If they manage to do that then Waymo will be significantly more valuable than a trillion dollars.

05 2y ago
As long as US keeps the Chinese manufacturers out.. Baidu Apollo now has a $28K self driving vehicle [0], I doubt Waymo is ever getting close to those numbers. They might replace some US personal cars, but they won't be able to compete globally. edit: Waymo wanted to use Zeekr vehicles before, I guess that ship has sailed now - they will have to get by with their new Hyundai contract [1] [0] https://cnevpost.com/2024/05/15/baidu-apollo-launches-6th-gen-robotaxi/ https://cnevpost.com/2024/05/15/baidu-apollo-launches-6th-ge... [1] https://waymo.com/blog/2024/10/waymo-and-hyundai-enter-partnership/ https://waymo.com/blog/2024/10/waymo-and-hyundai-enter-partn...
- RivieraKid 2y ago
  > I doubt Waymo is ever getting close to those numbers Why? In theory, Waymo should be able to copy everything Baidu is doing, e.g. manufacture in a low-labor-cost country like India. This is mainly about the technology, that's the hard problem. Optimizing the costs is something that has been done many times before and we know how to do it.
  - 05 2y ago
    At some point the technology is good enough, then the cheapest car wins. Waymo doesn't have vertical integration necessary to rapidly iterate and it can't afford to take risks - it's still not operating their commercial service on the highways, not because the tech isn't there, but because of the liability and PR damages if there's a fatal crash (much more likely at highway speeds). Baidu can have their test car kill a pedestrian every day for the next 10 years if necessary, that's not exactly an even playing field.
    - RivieraKid 2y ago
      Waymo is providing the self-driving AI, it's currently tied to a specific hardware, but it will become adaptable to a wide range of hardware. It will be used in both cheap and expensive cars. If the technology is good enough, it will work with cheap cars too. They will start using highways with regular passangers probably by the end of this year. Maybe Baidu can launch on highways with a 10x higher accident rate, but I don't think it's a significant advantage to the business.
- Zigurd 2y ago
  When operations are scaled up and routine, robotaxis will have a short life, probably 3 years or less. Even at $100k/car every 3 years, that's probably 10% of LTV for the cars. Uber knows this. They just did not have the money or tech Alphabet could bring to bear.
  - echoangle 2y ago
    > When operations are scaled up and routine, robotaxis will have a short life, probably 3 years or less. Can you elaborate on this? Do you mean due to wear?
    - Zigurd 2y ago
      Yes, wear: Robotaxis will probably go farther in a day than full-time rideshare drivers, maybe by 2X or more. Plus sensors and on-board compute will advance quickly. Waymo is on their 6th generation. 10 sets of tires in that time would not be surprising. That many miles also bumps up against battery lifespan.
zelda420 2y ago
But aren’t most cars on the road at the same high traffic times? I need a ride a 9am and 5pm just like half the city. People keep talking about fleets being in demand and your Tesla becoming a taxi while you sit on your office but wouldn’t everyone else’s also?

Zigurd 2y ago

$1T is about 6X Uber's market cap. If you can do Uber with more capex, less opex, 6X seems very do-able.

minwcnt5 2y ago

Didn't Uber raise over $30 billion from VCs before going public? It seems likely that they could continue for many more years at the current burn rate or even higher.