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Comment by dev_dull | Hacker News Reader

> while a longer 11.3-mile trip lists a cost of $19.15. That’s similar to the cost of a ride from Uber Technologies Inc. or Lyft Inc., and cheaper than a local taxi.

I’m really curious to learn more about the economics of this price. My understanding is that the lyft/uber pricing is subsidized. If Waymo can do the same but at a profit, then that will make them hugely competitive.

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I guess-estimated the numbers from several angles.

What I came up with is that a single occupancy (i.e. one person per car) cost will be less than $10/hour, which is competitive with public transport ($2.50 (subsidized) bus ticket in San Francisco, assume an average 15 min ride).

And it would drop significantly when sharing (2 to 4 people per car) or when deploying mini buses (they cost more to build and operate but can carry 12 to 16 people, like Chariot buses).

And in the longer term (10+ years) they'll be even cheaper thanks to mass production of cars, transitioning to electric cars, continuously improving reliability of cars based on analyzing what breaks most frequently, contracting own solar plants for cheapest charging etc.)

The obvious conclusion is that not only traditional taxis and uber and lyft are done but also buses because it makes no sense to subsidize them with hundreds of millions per year (for San Francisco) when private alternative is cheaper and better.

You can see my full reasoning at https://blog.kowalczyk.info/article/ac23f6cdd3b543b3b89d9f68... and https://blog.kowalczyk.info/article/e79db1cb2fcf4329ac37591b...

Presumably self-driving buses would be cheaper still!

Maybe. If the model were changed so that people scheduled rides ~15 mins in advance and met for pickup/dropoff at a semi-centralized location.

This idea naturally lends itself to a clustering problem such as k-means! We can imagine a geographical density as a cluster and that semi centralized pickup point as a centroid. As for deciding k, the number of cluster-centroid pairs, we can leave that up to market prices.

One way to adapt the k-means algorithm to this would be to add a “regularizing” or penalizing term proportional to the number of cars needed to be deployed — you can think of this as the cost per car.

People hate using real buses because they are so expensive in all the non-financial ways. Robot buses won't be much different: https://ideas.4brad.com/sharing-ride-less-sharing-better-tra...

Indeed, estimates indicate 75-80 percent of the cost of running buses is labor. If you could quadruple the frequencies of buses, that would make a big difference.

Many bus rides are much longer, available to people who don't have a credit card, and have better traffic density.

A monthly bus pass costs $75.

Uber is not really subsidized in established markets.

Ya, getting self driving cars for the automative industry is the equivalent of rockets landing themselves for the space industry. How do you compete with that?

If you can’t compete then legislate... keep an eye out for incumbent friendly legislation in the coming months and years, no doubt preceded by a lot of FUD.

Uber lobbying for increased regulation as a barrier to competition would be the highest of ironies. I want to believe they would know how bad it would look and stay away, but I think the more likely reason it won't happen is that they're working on their own self-driving tech.

By finding things that self-driving cars can't do such as load your luggage, open the door for you, make sure your car is absolutely spotless.

There's always a way to compete; it's a matter of finding out what people will pay for and people have a long history of paying premium prices for premium services.

It's the 80/20 rule of disruption. Those things are good, but driving from A to B is 80% of everything people really care about.

The flip side of that argument is that everybody and his little sister will dogpile onto the 80% part. The 20% is where the real money is likely to be. It will be a much smaller market, but likely more profitable.

Find your niche.

> By finding things that self-driving cars can't do such as load your luggage, open the door for you, make sure your car is absolutely spotless.

I'm not really sure any of those is intractable for self-driving cars; opening doors is trivial.

I understand that! The point is having a human driver get out and open the door for a passenger, or perform any of these additional services is part of the premium service I alluded to.

Some people will always use the valet even if free parking is available. Those are some of the potential customers I see.

Yeah, but while that might be relevant to the “human involved personal transport industry”, it really doesn't help automotive industry players that aren't competitive in the self-driving space, because once SDCs are good enough, even people providing car-with-included-footman service will use self driving cars to carry the passenger and footman, the latter of whom can then focus on customer service, rather than driving.

The post I was originally responding to was discussing the advantages of SDC over a "real" taxi and asking how it was possible to compete with that, implying that competition was not possible. My response was about ways that a human-driven taxi could compete.

In a general sense, I don't care about the specifics, I just find the thought that you can't compete with something to be intellectually lazy. Discussing the automotive industry at large is diverging from the point I was trying to make.

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