> I don't think Lyfts get 10x cheaper with robocars. It's not like 90% of your fare goes to driver net profit.
Ok let’s do this one more time:
Lyft currently takes 25% of the fare. The driver and the car take the other 75%.
Lyft’s 25% includes R&D for building the platform, support issues, and solving the chicken and egg problem in new launch regions. ie Lyft operates at a loss in a new city to attract drivers so riders can start using the app. This loss is roughly made up for by profitable cities like LA. 1. There is no chicken and egg problem with robotaxis. It’s just a matter of capital cost and ROI time horizons. 2. The robotaxi will be more consistent and as reduced support costs. 3. The platform will have been built, and limited R&D for KTLO. 4. Competition in the space between large robotaxi fleets will push down margins, reducing overall profits.
It’s very easy to see Lyft only requiring 5% rather than 25% to continue being profitable and competitive.
Meanwhile, regarding the driver and car: Robotaxis require roughly $10-20k more in car manufacturing, but can also be used 24/7 so better capital utilization on the initial investment for the car (it really is hard to imagine the worth of a car that is used 99% of the time rather than parked 95% of the time). Maintenance costs reduce with scale (+in house mechanics to improve margins). Maintenance costs reduce with electric drive trains. Maintenance costs reduce with better initial manufacturing (to optimize overall car costs rather than optimizing for initial sale costs to sell to individuals).
Increased scale can mean reduced margins i.e. Amazon. Vertical integration also yields better efficiency: When robotaxis have been real for a decade, car manufacturers will build and run robotaxi fleets. Unlike today, vertical integration of manufacturing, maintenance, recycling and operating the fleet of cars creates a lot of consistent demand and can bring significant economic advantages. Even the car manufacturers goals change. Rather than optimizing to sell cars (have them degrade and sell more), cars will be optimized for durability, maximum materials reuse, lowest variable cost per ride, ergonomic rides. A professional driver can put on 25k-50k miles per year[1]. Compared to 10k-15k miles per year on average[2]. Meaning professional drivers hit the car’s mileage limit, 200k-300k in 6-8 years. Already it would be better for them to have cars that are optimized for cleaning, maintainability, and longer lifespans. And this doesn’t even talk about lifespans of wheels or the expedited cost of maintenance.
Taking this math further: This is targeting 40 hour work weeks for professional drivers. If we targeted 75% (a lower bound) of the total hours in a week 168, we see robotaxis will drive 3-4x the miles of today’s Uber drivers. Setting lifespans of 2-4 years per taxi.
Large robotaxi fleet operators will likely become manufacturers but regardless they will change the mental model of how car manufacturing currently operates.
Robotaxis will not only absorb the profits of the taxi industry but also the profits from the car manufacturing industry, car maintenance industry, car rental industry, last-mile delivery (including food delivery) industry, rental housing industry, and more. Fleet operators will also optimize the cars for most recycling ability.
Just look at the trend with a manufacturing company like Apple. Metal frames not only look good but also recycle better and are better for business as a whole.
Apple has an iPhone tradein program because recycling materials can be cost effective for them. The scale will eventually be unimaginable, allowing the margins to be astonishingly low.
Utilization levels will be driven by peak demand, as the usage patterns are highly nonuniform so I don't think they'll be that different. Also remember that even during peak hours, cars will be traveling between fares, potentially half the time (since demand is often mismatched during peak hours). Because most of the costs scale per mile, I don't think the immense cost savings will materialize.
Now robobuses is an idea I can get behind, since labor costs do dominate there.
Ok let’s do this one more time:
Lyft currently takes 25% of the fare. The driver and the car take the other 75%.
Lyft’s 25% includes R&D for building the platform, support issues, and solving the chicken and egg problem in new launch regions. ie Lyft operates at a loss in a new city to attract drivers so riders can start using the app. This loss is roughly made up for by profitable cities like LA. 1. There is no chicken and egg problem with robotaxis. It’s just a matter of capital cost and ROI time horizons. 2. The robotaxi will be more consistent and as reduced support costs. 3. The platform will have been built, and limited R&D for KTLO. 4. Competition in the space between large robotaxi fleets will push down margins, reducing overall profits.
It’s very easy to see Lyft only requiring 5% rather than 25% to continue being profitable and competitive.
Meanwhile, regarding the driver and car: Robotaxis require roughly $10-20k more in car manufacturing, but can also be used 24/7 so better capital utilization on the initial investment for the car (it really is hard to imagine the worth of a car that is used 99% of the time rather than parked 95% of the time). Maintenance costs reduce with scale (+in house mechanics to improve margins). Maintenance costs reduce with electric drive trains. Maintenance costs reduce with better initial manufacturing (to optimize overall car costs rather than optimizing for initial sale costs to sell to individuals).
Increased scale can mean reduced margins i.e. Amazon. Vertical integration also yields better efficiency: When robotaxis have been real for a decade, car manufacturers will build and run robotaxi fleets. Unlike today, vertical integration of manufacturing, maintenance, recycling and operating the fleet of cars creates a lot of consistent demand and can bring significant economic advantages. Even the car manufacturers goals change. Rather than optimizing to sell cars (have them degrade and sell more), cars will be optimized for durability, maximum materials reuse, lowest variable cost per ride, ergonomic rides. A professional driver can put on 25k-50k miles per year[1]. Compared to 10k-15k miles per year on average[2]. Meaning professional drivers hit the car’s mileage limit, 200k-300k in 6-8 years. Already it would be better for them to have cars that are optimized for cleaning, maintainability, and longer lifespans. And this doesn’t even talk about lifespans of wheels or the expedited cost of maintenance. Taking this math further: This is targeting 40 hour work weeks for professional drivers. If we targeted 75% (a lower bound) of the total hours in a week 168, we see robotaxis will drive 3-4x the miles of today’s Uber drivers. Setting lifespans of 2-4 years per taxi. Large robotaxi fleet operators will likely become manufacturers but regardless they will change the mental model of how car manufacturing currently operates. Robotaxis will not only absorb the profits of the taxi industry but also the profits from the car manufacturing industry, car maintenance industry, car rental industry, last-mile delivery (including food delivery) industry, rental housing industry, and more. Fleet operators will also optimize the cars for most recycling ability. Just look at the trend with a manufacturing company like Apple. Metal frames not only look good but also recycle better and are better for business as a whole. Apple has an iPhone tradein program because recycling materials can be cost effective for them. The scale will eventually be unimaginable, allowing the margins to be astonishingly low.
[1] https://www.quora.com/How-many-miles-does-a-full-time-driver...
[2] https://www.carinsurance.com/Articles/average-miles-driven-p...