Self-driving taxis will take half of US driving by 2024

Google’s self-driving car program, Waymo, is allowing cameras inside their autonomous minivans in Arizona as Google prepares to launch the nation’s first self-driving taxi service. Analysts predict self-driving revenue will hit $2.3 trillion by 2030 with Waymo capturing 60 percent of that market.

Waymo’s secretive early rider program, made up of more than 400 households in Chandler, Arizona has been operating for a year.

The last major transportation shift in North America were from 1900 to 1913 from horses and horse carriages to cars. There have been shifts in various Asian countries from mostly bicycles and buses to cars from the 1970s to 2010.

Currently Waymo still has a driver sitting in the drivers seat. However, the person is there as a backup in case of problems. Eventually backup safety drivers would shift to working from remote command centers. Each person in a command center would be monitoring several cars.

There are about 305,000 taxi, limo, and ride-hail drivers in the US. Waymo has ordered 82,000 vehicles. A full deployment of the Waymo minivans in 2019 in Arizona and California would mean they would be at nearly 25% of the existing fleet of taxis. Avis is working with Waymo to service the cars in its Phoenix, Arizona but Avis itself manages around 400,000 vehicles in its US rental locations.

Uber had $2.8 billion of revenue in the last three months but they lost $890 million. If costs were reduced by not having drivers and robo-ride sharing becomes profitable. Then it would be trivial for Google to spend $20 billion and get 400,000 more minivans and make a profitable Uber. If Google had high levels of self-driving car, vans and buses, then people could be willing to accept one or two ride transfers to lower the overall cost of the ride. If the handoff involved waits of less than 2 minutes. Google will also add wi-fi services, which would make the rides more productive.

Self-driving cars reaching over 50% of all passenger miles in the US could happen as soon as 2024.

This rapid improvement in transportation and supply chain could be a 1-2% per year boost in economic growth throughout the 2020s.

There is also the certainty that lowering the cost of transportation will increase the amount of passenger miles around the world. This is referred to as Jevons Paradox. Technological progress increases the efficiency with which a resource is used (reducing the amount necessary for any one use), but the rate of consumption of that resource rises due to increasing demand. The Jevons paradox is perhaps the most widely known paradox in environmental economics.

The cost of taxis and ride-sharing with self-driving will drop in half when the amount of drivers is reduced.

Electric self-driving cars will eventually be 10 to 20% of the cost of current cars.

Every person could save $5000-10,000 a year on transportation.

This will also reduce the cost of trucks, buses and the supply chain, which will grow the entire economy.

They will not be perfectly safe but if they are initially 4 times safer that will reduce the fatal accident deaths in the US from 36,000 to 9,000. In China it will drop the car deaths from 260,000 to 90,000.

They should eventually get 10 to 20 times safer.

Traffic accidents in the U.S. cost $871 billion a year. Dropping those accidents by 4 to 20 times would be a massive boost in the economy.

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