[ghaff]

Replacing ~minimum wage drivers in conventional cars with expensive cars backed by expensive software developers and operations staffs is almost certainly not a business model. There may be (probably will be) a business model behind autonomous driving technology in some undefined future. But there's no guarantee Waymo won't be another killed by Google in the interim. The thought from a decade ago that the average teenager wouldn't need to learn to drive is basically a fantasy.

[implr]

They just poured $5B into it, that's a decent runway.

https://techcrunch.com/2024/07/23/alphabet-to-invest-another...

[buu700]

Could the hardware price come down with scale, or is it inherently expensive?

If the former, I think a viable model could be to eventually start selling the hardware (along with ongoing software updates, cloud services, maintenance, etc.). Let individuals across the world buy self-driving cars and run them as small businesses through whatever rideshare services they want in whatever locations they want. If there's a way, people will make the economics work. Over time, autonomous vehicle operators could eventually price human drivers out of the market on Uber and Lyft.

I see the current phrase of centrally managing all this as essentially a public beta test. Once the tech is proven and the regulatory environment is mature, the situation will change drastically. The Waymo app/network would no longer be needed at that point, unless it happened to become a big enough cash cow to be worth keeping around.

[ghaff]

Presumably the incremental cost comes down over time and selling the tech to car manufacturers could become an interesting business. (I'm skeptical it would be a direct to consumer business.) I assume that is how it will play out but it will probably be over a fairly long time horizon.

I'm also skeptical that the "let others use your car when you're not" ever becomes a major model.

[buu700]

That's a good point, agreed, I don't think Waymo would need to be the vendor of the actual vehicle. It makes more sense that existing manufacturers would sell "Waymo Inside" models that include their tech, and then services like Uber and Lyft would build integrations on Waymo's SDK to be able to manage such vehicles on behalf of the owners.

[matthewdgreen]

What value is the owner providing here? For traditional cabs they're doing (1) driving, (2) customer acquisition, (3) maintenance, (4) capital provision. For Uber/Lyft the customer acquisition is centralized, but they're still doing 1, 3, 4. For a Waymo-like service the owner is basically just investing cash and doing occasional cleaning/maintenance work.

Is capital so scarce that this is needed for services to operate? And is decentralized maintenance/cleaning really going to be more economical than centralized operations that benefit from economies of scale?

[buu700]

In my mind, it would be controlling both pricing and geographic allocation of resources in a market-driven way. The idea is to be a strategy for efficiently rolling out the service at scale in a way that distributes the risks and profits, like how Uber and Lyft grew by outsourcing to independent drivers rather than buying a bunch of cars and hiring a bunch of drivers in particular locations.

I don't know how the numbers work out, but if the parent commenter is correct that hardware costs are going to be a bottleneck, it seems reasonable to me that essentially crowdfunding a global deployment would be a way to address that. It could accelerate the rollout and provide economies of scale more quickly than Waymo alone footing the bill, and wouldn't preclude them from still additionally investing their own capital.

Aside from that, it seems like there would be some demand for ownership of autonomous vehicles from people who either don't want to rent them out or only want to do so part-time, and selling the vehicles directly to tap into that would help further increase the scale of both production and robotaxiing.

[matthewdgreen]

My hypothesis is that in the early days the key to success for robotaxi service companies is going to be safety and consistency, in order to convince regulators that huge fleets of robotaxis are safe. "Early days" doesn't just mean the current technical workup period -- it also covers the time period where robotaxi services start to eat into the market for privately-owned cars. That's the point where you'll see the heaviest anti-robotaxi lobbying from entrenched competitors, which will include not just taxi services but also politically-connected interests like car dealerships, manufacturers, service centers, etc. These folks will see their entire livelihood disappearing, and "robotaxis aren't safe" is the obvious argument they'll turn to.

During this period, it seems like a huge risk for a robotaxi company to play it "fast and loose" with car quality or maintenance. You'd want to maintain exceptional standards on anything safety-critical, and that means you don't want to be seen as outsourcing critical hardware purchases and maintenance to random sole-proprietor businesses. (Maybe somewhere down the line this will change, when the tech is so advanced and accepted that anyone can offer it.)

Obviously I might be wrong. Maybe capital is going to become so tight that it'll be hard for the Waymos of the world to scale up quickly? But at least for the first, say, 7 years of major expansion it feels like safety and quality are going to dominate the conversation.

[LeifCarrotson]

If there were a fleet of a million Waymo cars, 2,000 support staff, and 2,000 engineers keeping a stable technology running, and vehicle wear and tear was low (possibly lower than a human driver running an ICE car ragged)...it could work. But they're going to be unprofitable for a long, long time.

[skywhopper]

2000 support staff handling troubleshooting, cleaning, and maintenance on 500 cars per person? Not likely.

[bryanlarsen]

Uber itself has 30,000 employees and 7M drivers and is highly profitable. Waymo could support a lot more staff than you suggest and be profitable.

[ghaff]

It's hard for me to believe that Alphabet/Google even wants to be this huge robo-taxi service in the long run. I have to believe they want to be a technology supplier. Which means they need to enable robo-taxis-are-us to be a cheaper taxi service than Uber et al.

[Bjartr]

The want it because time you spend driving is time you could have spent browsing the web and therefore looking at Google ads

[xnx]

Price needs to be comparable, but not necessarily cheaper. Waymo rides are safer, cleaner, and more private than Uber rides.