Robotaxi : The business of competing with human drivers

[UltronY2021]

If true, that's not a sustainable business model long-term. That reputation would spread and they will eventually (probably already) have more leaving than starting.
I considered it at one point, but after doing the math, I determined it wasn't profitable for me, before I even began.

There must be plenty of drivers who are at least breaking even or the business fails. Simple economics.

I think you should honestly spend some time learning Economics. (moderator note: the is no shortage of economists that oppose the view you are about to put forth. No need to speak down to members here). In short, destroying lives is not something that holds back an economy. It will grind people down then come back for more.

See: Landlords.

For an exhaustive explanation of this I recommend Capital in the 21st Century, which catalogs a great deal of economic data across over 200 years of economic history and over 20 countries. In Economics terms, companies like Uber are Rentiers, and there is no economic mechanism to limit how much they take from the people. The response (if any) is political, not market.

For a faster way to realize market forces don't produce moral results I direct you to the common belief in Economics that Racism and Sexism reduce the available pool of workers, and are therefore inefficient, and so market forces will naturally remove them. However all data demonstrates market forces in fact reinforce them. In short, if you want moral outcomes, you must intentionally enforce them. The market will not provide them and in many cases will produce immoral outcomes.

And of course I encourage you to look up actual data on Uber drivers. Many are losing money with the average hourly wage after costs in the US just $6/hr. No one can live on that.

https://www.npr.org/2019/05/03/720139562/episode-910-economics-sexism-data

 

[Max Spaghetti]

Do we need the Florida vote in the next election? Genuine question.

 

[kabin]

That is racist. Nobody's "culture" is to steal IPs - just as it is not the "culture" of Europeans to commit genocide.

Wrong. It happens all the time. The Chinese legal system enables it. The Chinese government encourages it. Win at all costs. Local companies steal from each other as well as from abroad. The Chinese military steals other country's technology. Heck they even owe Russia for fighter jets. It's a backward country that discourages innovation unless the government (Xi) decides it's important enough.

That's why I said I was surprised Baidu had a fleet of RTs.

I was always surprised when US companies decided to try Chinese joint ventures. Finally the world is on to their #$%. In 20 years or so self-centered, dysfunctional India will likely be the next global SNAFU.

 

[rentierparasit]

I think you are correct.

Hi, all --

From the previously referenced autoura site, Baidu/Apollo is running in a bunch of cities:

Apollo | Robotaxi rollout

rollout.autoura.com

, with 840k rides in Q4 2023. Back of the envelope:

840k / 90 days / 10 trips per day = ~1000 taxis fleetwide.

Yours,
RP

 

[rentierparasit]

I've seen various business cases for Robotaxis - but the main competition are human drivers. So, how much can RT make when competing with human drivers ?

Let us say the minimum wage is $15 an hour. A lot of Uber/Lyft drivers actually make something like or even less that once all costs are accounted for.

All other costs of operating a RT is no different than operating a taxi service. Utilization of a taxi can be as high as RT when using drivers in shifts. Both RT & Taxis need to be cleaned, serviced, charged etc. The only difference is who is driving - a human driver that needs to be paid $15 an hour or the software. For the time being we can assume a taxi and an RT costs the same in terms of hardware.

Let us say RT can be used for 20 hours a day - leaving 4 hours for maintenance / charging. So, per day we get

20x15= $300 a day or $9,000 a month or about $100,000 a year.

So, an RT can replace human drivers who need to be paid $100k per year (min wage). That is really the "value" of RT.

This is the reason, in other countries, RT may be of different value. In India it might be just $10k per year (so, clearly not worth it) or some $20k in China - so is it really worth it ? At $100k a year on investment of say $50k for the RT, clearly RT is a sound business.

Ofcourse the question of demand, utilization etc will dictate the actual revenue - just as it would for a Uber driver or taxi operator.

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Hi, EVNow --

> how much can RT make when competing with human drivers ?

Tough to say. It turns out that most drivers do a lot more than just drive -- cleaning, fueling, some limited roadside tech (e.g. flat tire), entrance/exit assistance, security guard, etc. I think it a mistake to just zero out "wages" for RTs. There's still some # -- and I'll make one up right now, 0.25 -- of humans required for each car.

Yours,
RP

 

[enemji]

Hi, all --

From the previously referenced autoura site, Baidu/Apollo is running in a bunch of cities:

Apollo | Robotaxi rollout

rollout.autoura.com

, with 840k rides in Q4 2023. Back of the envelope:

840k / 90 days / 10 trips per day = ~1000 taxis fleetwide.

Yours,
RP

From what I saw they are muddying the numbers by having Baidu Taxi drivers drive much of their fleet.

 

[ThomasD]

AVs are a race to the bottom. One AV company will lower rates to destroy the competition. Then another AV company will lower prices. But these companies will have huge costs so they will be heavily subsidized until investors get tired of losing Money.

 

[enemji]

AVs are a race to the bottom. One AV company will lower rates to destroy the competition. Then another AV company will lower prices. But these companies will have huge costs so they will be heavily subsidized until investors get tired of losing Money.

The ones who are worried about reporting quarterly profits to the shareholders will not be able to survive this.

 

[spacecoin]

The ones who are worried about reporting quarterly profits to the shareholders will not be able to survive this.

That's why Tesla is out tbh. For how long do investors endure negative EPS and FCF? It will be for years and years, only to be able to compete in a market where margins are razor thin. Getting to where Waymo was 3 years ago still makes Tesla be 3 years behind on rolling out, which includes building depots, hiring staff and sinking vehicles and time into what will likely be a price war between both human drivers and a few AV-companies.

Alphabet and Baidu are the only ones that have the required financial muscle in my opinion, unless there are some major major breakthroughs in ML shortly.

I think Tesla's RT messaging is all about market cap and selling FSDS, and not about deploying actual RT. Time will tell.

 

[enemji]

Alphabet and Baidu are the only ones that have the required financial muscle in my opinion, unless there are some major major breakthroughs in ML shortly.

I can agree on Baidu with the Chinese government backing but Alphabet is still questionable

 

[spacecoin]

I can agree on Baidu with the Chinese government backing but Alphabet is still questionable

I don't think you need to worry about Alphabet...

They made a 25 billion dollar profit in Q1 alone. That's more than Tesla's revenue...

All "other bets" (of which Waymo is one) was less than -1B . Perhaps Waymo is half of that, around -500M, probably a bit less now when they are getting some revenue in the door.

Baidu made a 1 B profit in Q1. Tesla about the same. Let's see if Tesla makes a profit at all in Q2.

 

[enemji]

They made a 25 billion dollar profit in Q1 alone. That's more than Tesla's revenue...

The key to making profit is to shed of loss making business. Let’s see how Alphabet handles Waymo.

 

[EVNow]

AVs are a race to the bottom. One AV company will lower rates to destroy the competition. Then another AV company will lower prices.

I doubt it. I don't think we'll see this kind of competition this decade.

I think companies will compete based on better coverage, more features in the car, subscriptions etc.

I also don't think we'll get more than 3 or 4 RT companies in an area.

It will take at least another decade before RT is anything like a commodity.

 

[EVNow]

Wrong. It happens all the time. The Chinese legal system enables it. The Chinese government encourages it. Win at all costs.

Dude, you are confusing government with culture. Attacking culture is racist - attacking the policy is fair game - though it is not allowed on TMC because it gets into politics

BTW, all governments are protectionist, one way or another. Whether it's about banning TikTok or banning import of rice.

In more thing - as Elon says, Chinese companies are very competitive. Chinese engineers are excellent when it comes to AI & Data Science - I dealt with the Microsoft Chinese team and know this first hand. I've no doubt Chinese companies will be the biggest competitors in AV space.

 

[spacecoin]

The key to making profit is to shed of loss making business. Let’s see how Alphabet handles Waymo.

Waymo costs less than a 1B / year. Tesla, OTOH, has no profits to use to fund a RT buildout, so unless they are willing to go into the red I don't see it happening.

 

[ItsNotAboutTheMoney]

That is racist. Nobody's "culture" is to steal IPs - just as it is not the "culture" of Europeans to commit genocide.

That is not understanding words.

First, culture is behavior. So, yes, if IP theft is rampant, it's the culture.

Second, calling it racist is the same as calling somebody racist against white people if they say British food sucks.
They were writing about China, not people of Chinese ethnicity. There are lots of ethnically Chinese people around the world.

Third, if they write that it's culture, they are clearly _not_ referring to an inherent racial characteristic and so calling them racist is a dumb cultural reflex.

Fourth, policy impacts culture. IP theft was rampant in western countries, particularly across borders until actively stopped, which is why there now isn't a culture of IP theft in western countries.

 

[Max Spaghetti]

Tesla, OTOH, has no profits to use to fund a RT buildout, so unless they are willing to go into the red I don't see it happening.

Oh, I don't think any company with a sound working prototype will have any shortage of investors. Getting to that point is the difficult part.

 

[spacecoin]

Oh, I don't think any company with a sound working prototype will have any shortage of investors. Getting to that point is the difficult part.

Actually, getting to that point isn't very hard. Just look at the last 10-14 years of failed autonomy efforts and the billions of money invested into such ventures.

Getting from prototype hardware and software to autonomy has proven to be the really hard part.

 

[enemji]

Actually, getting to that point isn't very hard. Just look at the last 10-14 years of failed autonomy efforts and the billions of money invested into such ventures.

Getting from prototype hardware and software to autonomy has proven to be the really hard part.

Automatation is doable where every parameter is known and accounted for.

 

[Max Spaghetti]

Actually, getting to that point isn't very hard.

I said a working prototype. They don't have one yet.