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My theory is that we'll see the rise of what the author calls robo-taxi companies e.g. Uber or Google can provide car-as-a-service, for a monthly fee or 1. rob

My theory is that we'll see the rise of what the author calls robo-taxi companies e.g. Uber or Google can provide car-as-a-service, for a monthly fee or 1. robo-taxi companies will self-insure. Insurance is just spreading the risk. If you have a fleet of 10.000 cars, self-insurance will be cheaper 2. by "death" he means "significant decline", not "disappearance". A company that buys 10.000 cars has a purchasing power that a single customer doesn't. They can dictate the specs to a car company and they can pit several companies against each other to get the best deal. They can even co-design the cars for their own metrics (e.g. fuel efficiency, reliability, maintainability is super important for someone who has a large fleet). Car companies will have no choice but to play ball, some of them will go bankrupt and the remaining will service a much smaller market. 3. You assume that self-driving cars need a lot of new regulations. They don't - they just need to be allowed on the road. The rules have already changed in Nevada in California. When the technology is proven, the states will have a hard time justifying not allowing technology that is proven to save a significant number of lives. 4. robo-taxi companies will bring repairs in-house or outsource to existing companies. Again, they'll have upper hand in negotiations due to providing a lot of business and the overall market for repairs will shrink dramatically. Google could bring all their statistics knowledge to predicting what and when will fail and use the past data to improve the parts that fail the most. 5. not sure what you're driving at 6. agreed, probably overstatement on the author's part Google (or some other robo-taxi company) doesn't have to make their own cars, they'll have enough pricing power to pit multiple car manufacturers against each others to get the best deal, drive down the margins etc., just as Apple does with iPhone parts manufactuers (where Apple gets most of the profit from the phone). They can self-insure - the liability never goes away but will be manageable from revenues. As to people who insist on owning a car - most of them will change their mind because of price. If you leave college with $50k in student debt, are you going to spend $10k on a new car + monthly insurance + gas + cost of garage ($100/month in San Francisco if your apartment doesn't already come with it) + hassle of owning a car or will you pay $100/month for much more convenient car-as-a-service deal?

salman89 14y ago
OK, I'll bite on the robo-taxi fleets. The average cab driver makes $10.79 an hour: http://www.bls.gov/ooh/transportation-and-material-moving/taxi-drivers-and-chauffeurs.htm http://www.bls.gov/ooh/transportation-and-material-moving/ta... Give a 50% overhead and make the cab driver's cost $15 an hour. I used to pay about $50 for a half hour cab ride from LAX to Westwood, tip and surcharge subtracted, call it $40. I would still find a "no driver" taxi ride for $30 expensive. The point I am trying to get at is that the economies of traditional taxi companies and future "robo-taxi" companies will not be all that different. Taxi companies will not be repairing cars. They already buy large fleets of cars. Also keep in mind that the taxi industry itself is regulated. Recall Udemey's issues in DC with the taxi lobby. I do think Google will can be successful in the automotive industry, I just don't buy that they will be doing so by attempting to take down other existing industries. Google is entering a space that is much different than the web or electronic hardware. They have so much trouble breaking into the living room, not sure why you think they will make it to the driveway so quickly. On (5), I meant a decrease in parking revenue is not necessarily a bad thing for a city. Easier parking also means less barriers to a purchase.
- brc 14y ago
  Good luck with this argument. I ran it on an earlier HN thread about the cost of a driver being only a small portion of the cost of a cab. But people don't want to listen. They think because they hand a driver a $50 note, the driver makes all the money. Taxis cost money because of (a) running costs (b) finance/depreciation costs and (c) regulatory costs. (a) and (b) isn't going anywhere, and (c) certainly is not. Drivers are only a small part of the picture. Removing them won't dramatically alter costs or availability.
- erikpukinskis 14y ago
  Give a 50% overhead and make the cab driver's cost $15 an hour. I used to pay about $50 for a half hour cab ride from LAX to Westwood, tip and surcharge subtracted, call it $40. I would still find a "no driver" taxi ride for $30 expensive. OK, now factor in lower insurance premiums... Now cut the price of the car in half (no front seats, steering column, etc needed)... Now cut out the pay for the time cabbies spend waiting for calls Now cut the fleet size by 75% (better utilization due to intelligent routing, cabs never sleep, etc) I have a feeling there are a bunch more ways this will get a lot cheaper...
philwelch 14y ago
> robo-taxi companies will self-insure. Insurance is just spreading the risk. If you have a fleet of 10.000 cars, self-insurance will be cheaper I can attest that Zipcar, in fact, already seems to do this. Insurance and gas are included with the hourly rental fee. In fact, just get rid of having to drive the damn thing and Zipcar already has the whole business model down....

salman89 14y ago

OK, I'll bite on the robo-taxi fleets. The average cab driver makes $10.79 an hour: http://www.bls.gov/ooh/transportation-and-material-moving/taxi-drivers-and-chauffeurs.htm http://www.bls.gov/ooh/transportation-and-material-moving/ta... Give a 50% overhead and make the cab driver's cost $15 an hour. I used to pay about $50 for a half hour cab ride from LAX to Westwood, tip and surcharge subtracted, call it $40. I would still find a "no driver" taxi ride for $30 expensive. The point I am trying to get at is that the economies of traditional taxi companies and future "robo-taxi" companies will not be all that different. Taxi companies will not be repairing cars. They already buy large fleets of cars. Also keep in mind that the taxi industry itself is regulated. Recall Udemey's issues in DC with the taxi lobby. I do think Google will can be successful in the automotive industry, I just don't buy that they will be doing so by attempting to take down other existing industries. Google is entering a space that is much different than the web or electronic hardware. They have so much trouble breaking into the living room, not sure why you think they will make it to the driveway so quickly. On (5), I meant a decrease in parking revenue is not necessarily a bad thing for a city. Easier parking also means less barriers to a purchase.

brc 14y ago
Good luck with this argument. I ran it on an earlier HN thread about the cost of a driver being only a small portion of the cost of a cab. But people don't want to listen. They think because they hand a driver a $50 note, the driver makes all the money. Taxis cost money because of (a) running costs (b) finance/depreciation costs and (c) regulatory costs. (a) and (b) isn't going anywhere, and (c) certainly is not. Drivers are only a small part of the picture. Removing them won't dramatically alter costs or availability.
erikpukinskis 14y ago
Give a 50% overhead and make the cab driver's cost $15 an hour. I used to pay about $50 for a half hour cab ride from LAX to Westwood, tip and surcharge subtracted, call it $40. I would still find a "no driver" taxi ride for $30 expensive. OK, now factor in lower insurance premiums... Now cut the price of the car in half (no front seats, steering column, etc needed)... Now cut out the pay for the time cabbies spend waiting for calls Now cut the fleet size by 75% (better utilization due to intelligent routing, cabs never sleep, etc) I have a feeling there are a bunch more ways this will get a lot cheaper...

philwelch 14y ago

> robo-taxi companies will self-insure. Insurance is just spreading the risk. If you have a fleet of 10.000 cars, self-insurance will be cheaper I can attest that Zipcar, in fact, already seems to do this. Insurance and gas are included with the hourly rental fee. In fact, just get rid of having to drive the damn thing and Zipcar already has the whole business model down....