>Just driving around cars that aren't in use gets brought up with self-driving cars all the time,
I said nothing about just having cars that aren't in use driving around... I said offer them for courier/cargo service as well (prepared food, groceries, office supplies, flower delivery, etc). This is just one option for helping to use up unoccupied vehicles.
> there are currently 65,000 Uber-affiliated cars in NYC alone, according to a random search. If you were to replace all of those with self-driving cars at $50,000 a pop, that would be $3 billion right there
All 65,000 cars aren't on the road 24/7/365, NYC is also one market (and one that already has a robust public transportation system, unlike most of the country) and is far from the typical uber market.
> If you were to replace all of those with self-driving cars at $50,000 a pop
Yeahhhhhh, self driving cars aren't going to be 50k when these companies start deploying them. They'll be considerably cheaper.
You're going to have a largely spartan cabin, no wood grain on the dash, no leather, no need for Bose surround with a full-featured infotainment system, just some utilitarian seats, airbags and climate control. They'll be just enough horsepower for adequate city driving and enough battery to operate a few hours between charges.
> but you're still talking hundreds of millions of dollars for a single market.
Uber and Lyft now have to pay a minimum of $17 an hour to drivers in NYC. If they have an average 1000 drivers on the road at any time, that's $408,000 a day. Almost 150 million a year...
Even if a self-driving car only saves half of that, and we go with your random figure of 50k, if they deployed 2000 cars to have 1000 drivers replaced every minute of every day, it takes them about 16 months to recover their investment purely from savings. Likely much faster.
They'll also be able to service vehicles much cheaper than private individuals because all the vehicles are identical, everything will be bought in bulk. Tires for example are a hell of a lot cheaper when you're buying trainloads straight from a factory, fixing mechanical failures are a lot quicker when every vehicle is identical and your internal mechanics have made the same repair tens or hundreds of times and don't have to waste time digging around through Chilton or Haynes manuals to figure out where the manufacture hid this or that on a random year make and model ohhhh wait this was manufactured at the Canadian factory so it's different than the US factory slightly (like my Impala grumble) and not actually pictured in the manual.
>To replace their current fleet of sub-contracted drivers with self-driving cars is going to cost billions and billions of dollars. Uber currently has something like $7B on hand and is burning through nearly a billion a quarter.
Yup, and they're not going to abruptly stop allowing human drivers. They'll enter one market, then two markets, then three markets and as above, they'll be saving money in some that have minimum pay rates required by law for drivers which will allow them to relatively quickly recover their costs without changing pricing at all and many customers will save money because they won't feel they need to tip.
>and is burning through nearly a billion a quarter.
Yeah, radical change often costs a good deal of money before it becomes profitable. Just like exploration, sailing to the new world was a rather dangerous and expensive endeavor until trade routes were finally established for example.
One or both companies may very well fail before they achieve success as autonomous transportation companies, but that's absolutely what they are trying to be.