[IanCal]

> On the latter point, we have basic economic theory: say the average American today spends $600/month total on owning a car. Why would anyone price a self-driving service at $200/month? No, they'd go for an initial price of $400/month for a couple of years to get customers, then sneak back up to $600/month once they've caught most of the market.

That's assuming a monopoly.

> Why would anyone price a self-driving service at $200/month?

Because if they priced it at $400 then a competitor could price it at $300 and make more money.

[semi-extrinsic]

No, that's not what happens. This is a classic situation with a stable Nash equilibrium where the best for all competitors is to keep the price high. They know the current price is affordable enough that people will keep paying.

Think about gasoline prices back when crude oil prices suddenly fell off a cliff. Did gas prices at your local station drop? No, not one cent. All of the competing stations kept the prices roughly where they were and raked in increased profits.

[IanCal]

> Think about gasoline prices back when crude oil prices suddenly fell off a cliff. Did gas prices at your local station drop?

Petrol prices in the UK definitely have dropped (30% over four years, not including inflation) http://www.racfoundation.org/data/uk-pump-prices-over-time

[scrumper]

I know it’s not the main point you’re making, but gas prices near me (north east USA) absolutely did drop a lot when oil plummeted.