4 ms·

Are Waymos cheaper than hiring a person?

by pkulak 6mo ago

Kirby64 6mo ago
Depends on the region, I think. Lyft and Uber partner with them in certain cities, so you transparently are charged the same as a similar ride with a human driver. It's only a better experience than a human driver, though, in my view. No chance of yapping, more privacy, no chance of your driver being a psycho, cars are better maintained.
walrus01 6mo ago
It's hard to measure "cheaper" as an end user consumer, the price you pay for the service, because it's very likely they're operating at a loss to gain market share and growth. Exact same reason why Uber and Lyft were considerably cheaper than taxis in many big cities when they first launched (eg: Lyft in Seattle in 2013/2014), running at a loss, and the pricing has now incrementally grown to become the same as, or even more expensive than traditional meter taxis in some places.
- Barbing 6mo ago
  Great point
tristanj 6mo ago
Waymo inflates their prices to be above that of Uber/Lyft because they don't have enough vehicles to meet demand. But their operating costs / mile are lower than that of Uber/Lyft. I'd estimate their internal cost per mile is approx. half that of Uber/Lyft. They pocket the rest because they need to recoup decades of expensive R&D. There is also no reason to compete with Uber/Lyft on price because they are just leaving money on the table. When Waymo first launched, we saw them try to undercut (Waymo was about 20% cheaper than Uber/Lyft) but now it's about 20% more expensive. People are willing to pay extra for Waymo, so why would they charge less? The margin on each Waymo ride is currently very, very high. I don't expect Waymo to cut prices until real competition arrives.
- linkregister 6mo ago
  Is it known that Waymo operating costs are lower?
  - tristanj 6mo ago
    In San Francisco, it has to be. Because of prop 22, Uber/Lyft must compensate drivers a minimum of $22.40/hr, plus $0.36/mile for vehicle expenses. Waymo doesn't have this cost, so it's effectively ~$25/hr cheaper to operate than Uber/Lyft. I looked up the numbers - the estimated Uber/Lyft cost per mile in SF is ~$4.50/mi, and Waymo is trending around $1.40/mi (estimated 2025 number).
    - linkregister 6mo ago
      Where is this estimate? I found a wide range of estimates in my web search, from a per-mile cost of revenue of $2 (meaning a loss of $2 per mile excluding capex), to up to $50/mile.
      - nostrademons 6mo ago
        The Gemini results when I searched for this cited this Reddit post [1] which cites this Reddit post [2], which conveniently gives your $2/mile answer. Anyway, digging into the Reddit posts which gave your lower-bound number, the reasoning seems very suspect. In particular, the biggest methodological problem is that they use retail price numbers when Waymo is almost certainly getting wholesale prices. So it assumes $110K ($70K for a Jaguar iPace + $40K for sensors and other AV equipment) for the car depreciated over 5 years, but $70K is the retail price for a Jaguar, including dealer markup, distribution, marketing, etc, and when you are buying thousands of them you are almost certainly not paying retail. Likewise, it figured 25c/kwh for electricity, which is retail off-peak PG&E rates, but Google just buys their own solar panels and pays pennies for electricity. The AV equipment figure of $40K was I recall what it cost back in ~2014; the cost of LIDAR has come down dramatically since then and now runs $500-1000/vehicle, so that number should also be suspect. And if vehicle cost is more like $50-60K/year than $110K/year, $7K/year in insurance is way too high. Hell, Google could just self-insure with their $250B in cash, they've got a stronger financial position than every insurer other than Berkshire Hathaway. I'd bet the true cost per mile is well under $1. [1] https://www.reddit.com/r/SelfDrivingCars/comments/1oiqerw/how_will_the_economics_of_waymo_play_out/ https://www.reddit.com/r/SelfDrivingCars/comments/1oiqerw/ho... [2] https://www.reddit.com/r/waymo/comments/1il5d5i/unit_costs_per_revenue_mile_estimate/ https://www.reddit.com/r/waymo/comments/1il5d5i/unit_costs_p...
cheriot 6mo ago
During peak hours Waymo is more expensive than standard uber/lyft - I don't pay attention to black/premium pricing. Off-peak the price can be comparable. I mainly check because my wife prefers it.
superfrank 6mo ago
IIRC, in SF they're slightly more expensive before tip, but having ridden in them in SF, LA, and AZ I've always felt they were cheaper. Over the long run, they will probably end up being cheaper from the wholesale perspective since eventually the parts and technology cost will come down with time and scale while human wages will continue to rise. That said, it doesn't really matter if they're cheaper as long as they're comparable. The cars are newer and nicer (for now), they're almost always cleaner since they can rotating one car out for cleaning doesn't mean the driver is losing earnings, they're better drivers than the average ride-share driver, you don't feel the need to tip, and I've multiple of my friends who are women call out that they feel safer in them because there's no risk of the driver being creepy (or worse). I don't think Waymo is trying to win on price right now. I think as long as they just stay somewhat competitive on that front the other benefits will continue to draw in customers.
- fragmede 6mo ago
  Alphabet/Google/Waymo is a technology business, with emphasis on business. They're not running a charity. They're in it to make money. If it's a $20 Uber ride to somewhere, they're not going to leave money on the table and charge $10 because they don't have a driver to pay. They're going to charge $22 for the premium experience because they know people will pay that.
  - Barbing 6mo ago
    That sounds right. Passenger pays for lower risk, etc. The market sees the company making $2 extra and a competitor will see if they can do it for just $1 extra. (nobody would confuse me with an economist!)
  - superfrank 6mo ago
    Of course, but I never claimed that they would do that. At some point though other autonomous services will enter the market and Waymo will have to compete with them on price. Even if that doesn't happen (which seems incredibly unlikely), they're still competing against public transit and people driving themselves (or privately owned self driving cars). Not having to pay a driver means the floor where they can make a profit is lower. If we're in a world where human driven Uber's are $30, you're right that Waymo probably won't charge $20 just to be nice, even if it only costs them $10. They might charge $20 though if their data shows that it would 10x the number of riders or if they're also competing with another autonomous taxi company.
singron 6mo ago
If a waymo costs $200k (car+sensors+install labor) and drives 200k miles, then amortizing up-front costs alone are about $1/mile. We don't really know what the TCO of a waymo is, and it's possible it could go down with economies of scale. Rideshare drivers can get paid $1-2/mile although it varies a lot.
- jillesvangurp 6mo ago
  That's just the current cost. The long term cost structure should be based on cars that come out of the factory with all the right stuff pre-installed. There's a BOM for some extra components; many of which you might already find in some cars. Otherwise it's just another EV. So, long term the extra cost per mile relative to a driver driving the same car should be cents rather than dollars per mile. And of course if there is no driver, some components like manual controls, dashboards, mirrors, etc. actually become redundant as well. So the total BOM might actually be lower long term. The driver cost is of course the big saving. And they need breaks as well and don't drive 24x7. A robo taxi only has down time when there are no rides, or for charging and maintenance/cleaning. Mostly what Waymo is doing currently with customized vehicles is not actually super scalable. But it helps at their relatively small current scale. You wouldn't design a custom vehicle + factory for their current growth rate. That becomes more interesting when they start scaling beyond tens of thousands of new vehicles per year. They are probably in the lower thousands currently. I think they raised close to 20-30B so far. They say they are doing 500K rides per week. At 15$ per ride that adds up to ~390M/year. That's revenue, not profit. But if they could 100x that by rolling out to more and more cities and larger and larger areas, it's going to add up to annual revenues that add up to more than what they raised. That's not going to happen overnight, obviously. But they seem on a path where they are scaling, optimizing, reducing their cost, and growing. The risks here are mainly that they won't have the market to themselves. Others are doing robo taxi's too and if any of them starts scaling faster and cheaper, Waymo could hit some growth issues. Also, with multiple companies competing, prices per ride would eventually go down. The next five years are going to be interesting.
  - mmooss 6mo ago
    > A robo taxi only has down time when there are no rides, or for charging and maintenance/cleaning. It's wierd to see this fantasy of machines on HN, of all places - that they have no downtime, no additional costs - it's only a savings from employing people), and (not said here) they don't make mistakes. Lots of machines have far more downtime and cost than people. Many have more maintenance hours than operating hours.
xnx 6mo ago
Sometimes cheaper, [nearly] always better.

Are Waymos cheaper than hiring a person?

by pkulak 6mo ago

Are Waymos cheaper than hiring a person?

Depends on the region, I think. Lyft and Uber partner with them in certain cities, so you transparently are charged the same as a similar ride with a human driver. It's only a better experience than a human driver, though, in my view. No chance of yapping, more privacy, no chance of your driver being a psycho, cars are better maintained.

walrus01 6mo ago

It's hard to measure "cheaper" as an end user consumer, the price you pay for the service, because it's very likely they're operating at a loss to gain market share and growth. Exact same reason why Uber and Lyft were considerably cheaper than taxis in many big cities when they first launched (eg: Lyft in Seattle in 2013/2014), running at a loss, and the pricing has now incrementally grown to become the same as, or even more expensive than traditional meter taxis in some places.

Barbing 6mo ago
Great point

tristanj 6mo ago

Waymo inflates their prices to be above that of Uber/Lyft because they don't have enough vehicles to meet demand. But their operating costs / mile are lower than that of Uber/Lyft. I'd estimate their internal cost per mile is approx. half that of Uber/Lyft. They pocket the rest because they need to recoup decades of expensive R&D. There is also no reason to compete with Uber/Lyft on price because they are just leaving money on the table. When Waymo first launched, we saw them try to undercut (Waymo was about 20% cheaper than Uber/Lyft) but now it's about 20% more expensive. People are willing to pay extra for Waymo, so why would they charge less? The margin on each Waymo ride is currently very, very high. I don't expect Waymo to cut prices until real competition arrives.

linkregister 6mo ago
Is it known that Waymo operating costs are lower?
- tristanj 6mo ago
  In San Francisco, it has to be. Because of prop 22, Uber/Lyft must compensate drivers a minimum of $22.40/hr, plus $0.36/mile for vehicle expenses. Waymo doesn't have this cost, so it's effectively ~$25/hr cheaper to operate than Uber/Lyft. I looked up the numbers - the estimated Uber/Lyft cost per mile in SF is ~$4.50/mi, and Waymo is trending around $1.40/mi (estimated 2025 number).
  - linkregister 6mo ago
    Where is this estimate? I found a wide range of estimates in my web search, from a per-mile cost of revenue of $2 (meaning a loss of $2 per mile excluding capex), to up to $50/mile.
    - nostrademons 6mo ago
      The Gemini results when I searched for this cited this Reddit post [1] which cites this Reddit post [2], which conveniently gives your $2/mile answer. Anyway, digging into the Reddit posts which gave your lower-bound number, the reasoning seems very suspect. In particular, the biggest methodological problem is that they use retail price numbers when Waymo is almost certainly getting wholesale prices. So it assumes $110K ($70K for a Jaguar iPace + $40K for sensors and other AV equipment) for the car depreciated over 5 years, but $70K is the retail price for a Jaguar, including dealer markup, distribution, marketing, etc, and when you are buying thousands of them you are almost certainly not paying retail. Likewise, it figured 25c/kwh for electricity, which is retail off-peak PG&E rates, but Google just buys their own solar panels and pays pennies for electricity. The AV equipment figure of $40K was I recall what it cost back in ~2014; the cost of LIDAR has come down dramatically since then and now runs $500-1000/vehicle, so that number should also be suspect. And if vehicle cost is more like $50-60K/year than $110K/year, $7K/year in insurance is way too high. Hell, Google could just self-insure with their $250B in cash, they've got a stronger financial position than every insurer other than Berkshire Hathaway. I'd bet the true cost per mile is well under $1. [1] https://www.reddit.com/r/SelfDrivingCars/comments/1oiqerw/how_will_the_economics_of_waymo_play_out/ https://www.reddit.com/r/SelfDrivingCars/comments/1oiqerw/ho... [2] https://www.reddit.com/r/waymo/comments/1il5d5i/unit_costs_per_revenue_mile_estimate/ https://www.reddit.com/r/waymo/comments/1il5d5i/unit_costs_p...

cheriot 6mo ago

During peak hours Waymo is more expensive than standard uber/lyft - I don't pay attention to black/premium pricing. Off-peak the price can be comparable. I mainly check because my wife prefers it.

superfrank 6mo ago

IIRC, in SF they're slightly more expensive before tip, but having ridden in them in SF, LA, and AZ I've always felt they were cheaper. Over the long run, they will probably end up being cheaper from the wholesale perspective since eventually the parts and technology cost will come down with time and scale while human wages will continue to rise. That said, it doesn't really matter if they're cheaper as long as they're comparable. The cars are newer and nicer (for now), they're almost always cleaner since they can rotating one car out for cleaning doesn't mean the driver is losing earnings, they're better drivers than the average ride-share driver, you don't feel the need to tip, and I've multiple of my friends who are women call out that they feel safer in them because there's no risk of the driver being creepy (or worse). I don't think Waymo is trying to win on price right now. I think as long as they just stay somewhat competitive on that front the other benefits will continue to draw in customers.

fragmede 6mo ago
Alphabet/Google/Waymo is a technology business, with emphasis on business. They're not running a charity. They're in it to make money. If it's a $20 Uber ride to somewhere, they're not going to leave money on the table and charge $10 because they don't have a driver to pay. They're going to charge $22 for the premium experience because they know people will pay that.
- Barbing 6mo ago
  That sounds right. Passenger pays for lower risk, etc. The market sees the company making $2 extra and a competitor will see if they can do it for just $1 extra. (nobody would confuse me with an economist!)
- superfrank 6mo ago
  Of course, but I never claimed that they would do that. At some point though other autonomous services will enter the market and Waymo will have to compete with them on price. Even if that doesn't happen (which seems incredibly unlikely), they're still competing against public transit and people driving themselves (or privately owned self driving cars). Not having to pay a driver means the floor where they can make a profit is lower. If we're in a world where human driven Uber's are $30, you're right that Waymo probably won't charge $20 just to be nice, even if it only costs them $10. They might charge $20 though if their data shows that it would 10x the number of riders or if they're also competing with another autonomous taxi company.

singron 6mo ago

If a waymo costs $200k (car+sensors+install labor) and drives 200k miles, then amortizing up-front costs alone are about $1/mile. We don't really know what the TCO of a waymo is, and it's possible it could go down with economies of scale. Rideshare drivers can get paid $1-2/mile although it varies a lot.

jillesvangurp 6mo ago
That's just the current cost. The long term cost structure should be based on cars that come out of the factory with all the right stuff pre-installed. There's a BOM for some extra components; many of which you might already find in some cars. Otherwise it's just another EV. So, long term the extra cost per mile relative to a driver driving the same car should be cents rather than dollars per mile. And of course if there is no driver, some components like manual controls, dashboards, mirrors, etc. actually become redundant as well. So the total BOM might actually be lower long term. The driver cost is of course the big saving. And they need breaks as well and don't drive 24x7. A robo taxi only has down time when there are no rides, or for charging and maintenance/cleaning. Mostly what Waymo is doing currently with customized vehicles is not actually super scalable. But it helps at their relatively small current scale. You wouldn't design a custom vehicle + factory for their current growth rate. That becomes more interesting when they start scaling beyond tens of thousands of new vehicles per year. They are probably in the lower thousands currently. I think they raised close to 20-30B so far. They say they are doing 500K rides per week. At 15$ per ride that adds up to ~390M/year. That's revenue, not profit. But if they could 100x that by rolling out to more and more cities and larger and larger areas, it's going to add up to annual revenues that add up to more than what they raised. That's not going to happen overnight, obviously. But they seem on a path where they are scaling, optimizing, reducing their cost, and growing. The risks here are mainly that they won't have the market to themselves. Others are doing robo taxi's too and if any of them starts scaling faster and cheaper, Waymo could hit some growth issues. Also, with multiple companies competing, prices per ride would eventually go down. The next five years are going to be interesting.
- mmooss 6mo ago
  > A robo taxi only has down time when there are no rides, or for charging and maintenance/cleaning. It's wierd to see this fantasy of machines on HN, of all places - that they have no downtime, no additional costs - it's only a savings from employing people), and (not said here) they don't make mistakes. Lots of machines have far more downtime and cost than people. Many have more maintenance hours than operating hours.

xnx 6mo ago

Sometimes cheaper, [nearly] always better.