Monday, April 29, 2019

"Scoop: the questionable economics of autonomous taxi fleets"

It's FT Alphaville's scoopage, not ours:
Alphaville has long held the suspicion that, despite the hype, the economics of a self-driving fleet of taxis, as an alternative to owning a car, simply won’t work.
A new paper out Monday, written by researchers at the Massachusetts Institute of Technology and exclusively shared with FT Alphaville, agrees. It suggests that, at current prices, an automated hive of driverless taxis will actually be more expensive for a consumer to use than the old-world way of owning four wheels.
Drawing on a wealth of publicly available data, Ashley Nunes and his colleague Kristen Hernandez suggest that the price for taking an autonomous taxi will be between $1.58 to $6.01 on a per-mile basis, versus the $0.72 cost of owning a car. Using San Francisco’s taxi market as its test area, the academics examined a vast array of costs such as licensing, maintenance, fuel and insurance for their calculations.
The news comes as the arms race to deliver an autonomous taxi service reaches full-speed in Silicon Valley. Both Lyft and Uber have committed hundreds of millions of dollars to developing the technology, with Uber chief executive Dara Khosrowshahi declaring at a recent FT conference that “if there’s one big goal for Uber it’s to replace car ownership”. Along the same lines, Alphabet-owned Waymo has been operating a robo-taxi service in Phoenix, Arizona since December.
A robo-taxi service have two main economic flaws, according to Nunes and Hernandez.
First is what the two academics refer to as “capacity utilisation” — the amount of time an autonomous vehicle is carrying a customer. According to the paper, the taxi occupancy rate stands at 52 per cent in San Francisco. Whereas in car ownership fuel and usage are directly correlated, a taxi is only being used around half the time....MUCH MORE