ARK estimates that autonomous driving could reduce the cost of ride-hail significantly, expanding the addressable market. Today, the average price of an Uber is $2 per mile, while Didi is $0.50-$.70 per mile. We estimate that autonomous ride-hail vehicles will have higher utilization rates than human-driven cars, as well as lower labor and insurance costs. At scale, ARK estimates that an autonomous taxi platform could price rides profitably at 25 cents per mile.
Sources: ARK Investment Management LLC, Didi S-1, US Department of Transportation, Internal Revenue Service
Ark estimates for the perceived value of time suggest that before autonomous ride-hail is widespread and costs decline to 25 cents per mile, it is likely that there would be substantial demand today for a higher priced service. For example, given consumers’ perception of the value of time, we believe that an average robotaxi price of $0.60 — $1.10 per mile would be sufficient to address the rough 5 trillion urban miles that people in the United States and Western Europe drive annually.
In China, however, there is likely more demand for a service priced at $0.50 per mile, given the inexpensive human-driven ride-hail options available today, as shown below.
The robotaxi should be nearly $1 trillion as the price gets to about $1.10 per mile.
On the Tesla Q2 2021 earnings conference call, Elon Musk called a self driving fleet of cars as “one of the most valuable things ever created in the history of civilization”. This is clipped in the Warren Redlich video at about 56 minutes.
SOURCES- Ark Invest, Warren Redlich, Tesla
Written By Brian Wang, Nextbigfuture.com
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
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