It’s not really when you consider their burn rate. Say each of those trips gross 10$. That’s just 100k/week or $5.2 million/year. They’d need to likely 10,000x the ride volume to even be close to profitability.
Uber does 7.64 billion rides per year. And they are not profitable. The waymo cars sure ain’t cheap, and scale of operations will take a ton of cash. I wonder if waymo would ever be profitable.
hopefully we get to 8 before waymo.com posts "An Update on Waymo self-driving cars" and kills the project. That said, this is one project that google really seems to have invested for the long-term.
Counterpoint: Concord, Google Glass, etc. Just because something can be achieved technologically, doesn't mean there is demand for it at the price you'd need to charge for it to make sense.
Don't get me wrong. Self driving taxis are cool. I'd like to use Waymo if it were launched where I live, at that price.
But that's a very large set of very large assumptions, stacked on top of each other! I can immediately think of lots of ways it can go wrong:
1. The economics may never work.
2. The "can't speed won't speed" problem may prove politically unsolvable, meaning people end up preferring taxis who avoid liability by being decentralized.
3. Google's core business may falter before Waymo manages to become financially independent, and in the absence of Waymo other competitors may decide it's no longer worth the investment vs Tesla-style incrementalism.
4. Public transport isn't going anywhere in high density cities simply due to limited road capacity.
5. Many people may simply prefer having their own cars even if Waymo taxis are everywhere, simply because you can't beat the latency of walking to your own driveway.
But the core problem is going to be price. Taxi drivers are cheap. For years people said Uber/Lyft would build up brand loyalty, raise prices and start making money any day now. After all it's ultimately just a ridehailing app, it's not that hard to make, so how can they not make a decent business out of it? Yet they never did get to that point even though it's a million times easier. Waymo not only has to find a way to turn a regular weekly profit taking into account their ultra-expensive staff, hardware, energy costs, support costs, etc but then maybe even one day yield enough profit to pay off the initial investment! All of that whilst competing in a super low margin market? Maybe it can be done but when I see the reasons people are giving here for why they like Waymo cars (clean, safe, etc) I'm not seeing the basis of a great company. It sounds a lot like the reasons I heard when Uber first appeared, even. And it's certainly WAY easier to compete on those aspects whilst still using human drivers.
Perhaps one day yes, presumably someone will get self-driving taxis to the point of being a sustainable business, but it might well be writeoff for Google just like it was for Uber.
Are we really evaluating a fleet of self-driving taxis on profitability today, though?
If they're reliably doing 10,000 trips a week, I promise you they don't need to worry about finding additional investors.
"It's not really impressive to be doing 10,000 self-driving taxi trips every week, because it's currently costing them money" is a really, really wild take.
The difference is that the variable costs are much lower - just recharging the EV + any other incidentals, as opposed to having to pay a driver for every ride. That's why Uber never became profitable, because they had to share the fare. Waymo has higher up front costs, but if the cars are there, they have much more profitable fares.
Maybe - Waymo has to recharge, clean and maintain a fleet of cars that they own (and which are depreciating and likely have no resale value, at least at the moment) - Uber's drivers effectively use their wages to cover all of those costs. I'm curious how Waymo is handling all of the fleet maintenance, recharging, cleaning, etc, and how they plan to scale that infrastructure.
I also wonder how Waymo plans to handle 'surges' - they either have enough cars to handle peak demand, in which case many are idle much of the time (and thus not making money), or they build a fleet for the minimum/average, and let more elastic competitors cover surges (or it's just impossible to get one at rush hour anywhere). It really seems like Uber/Lyft/etc ought to have a better business model than this very centralized, capital-intensive approach, and they're seemingly incapable of earning a profit.
I would bet on technology being able to handle peak demand better than a non-tech solution. They could pre-position vehicles better, incentivize pooling and transit connections, etc. And just like Ubers they could repurpose vehicles for other tasks (delivery, getting cleaned) in low demand times. But I'm sure there will still be surge pricing as you can't avoid demand spikes completely.
EVs need very little complicated maintenance. At this point, batteries and electric motors are a rock-solid technology.
So you're left with occasional minor maintenance for mechanical issues like broken door handles or jammed windows, and also with interior cleaning.
Even this can in future be minimized by building a taxi-only car model. You can get rid of the steering wheel, instrument cluster, central console, and all the complicated plastic parts that go with all of this. You can just replace everything with durable and easily washable hard plastic, like seats on public transit.
Then make seats easily removable, and the interior becomes straightforward to clean (heck, you can even automate it).
> Uber's drivers effectively use their wages to cover all of those costs. I'm curious how Waymo is handling all of the fleet maintenance, recharging, cleaning, etc, and how they plan to scale that infrastructure.
Probably large regional hubs that cars will drive themselves to for periodic maintenance (or get towed to if the vehicle becomes disabled). Much more potential to bring down total cost than the 'each driver does it themselves' model.
Uber does 7.64 billion rides per year. And they are not profitable. The waymo cars sure ain’t cheap, and scale of operations will take a ton of cash. I wonder if waymo would ever be profitable.