I'm skeptical about all this. Hubert Horan [1] has done a great job exposing Uber's failed business model in 11 part series on NakedCapitalism ("Can Uber Ever Deliver?"). Same goes for Lyft. When it comes to self driving cars, why should Uber or Lyft have any massive advantage over other players and what makes us think it won't turn into something like an airline industry which has been unprofitable for most of their…
The most important part: Detailed cost data from studies of traditional operators in Chicago, San Francisco and Denver showed that 58 cents of every gross passenger dollar (fares plus tips) went to driver take home pay and benefits, 9 cents went to fuel and direct fees, 18 cents went to vehicle costs and the remaining 15 cents covered corporate overhead and profit. This in essence states that taxi business has upper…
AFAICT, Horan doesn’t dispute that there is business there; he disputes that it is worth their valuation. If, say, they can make a hundred million dollars of profit a year, long term, that is a viable and profitable business, but not one that’s worth tens of billions of dollars.
And vehicle ownership? I think it is extremely hard to predict what will happen. Many people currently see their car as an extension of their home. If (possibly a big if) self-driving cars aren’t a lot more expensive, they may not want to give that up. Where else would people keep their sweets to eat during their commute, spare jacket, running shoes, tennis rackets, golf clubs, kids toys (let alone kids seats)?
There also may be extra stuff people may want to keep in _their_ self-driving car, for example a computer gaming system, a yoga mat or fitness machine (once self driving cars are safe enough, compulsory seat belts laws can go away)