Robo Taxi Services


So driverless taxis will be cheap.

Taxi medallions are licenses by the city for taxi companies, to prevent abuse. But if the software is certified, you don’t really need the medallions. Drop $500,000 off the cost of a taxi.

You don’t have to pay the 2 drivers that normally share a cab. Drop $80,000 a year off.

Assuming the cars no longer crash (version 2.0?), drop $10,000/year off for taxi insurance.

Combine that with Google-quality routing, and smart-phone taxi ordering, and you’re looking at a major price drop for taxi service, assuming some sort of competition. I’m guesstimating a 50-75% drop.

Most people in cities will opt out of owning their own car, and use robo-taxis.

You are looking at an 80-85% drop in the required number of cars in cities (even accounting for current peak traffic volumes. see the KPMG report. I also came to the same number back-of-the-envelope).

Obviously, this will destroy GM and Toyota. Might be good for Tesla as they are still tiny, and I’m sure Elon and Larry have discussed this.


Let’s look at self driving cars, another topic that the NY Times wrote about recently. Maybe we won’t all own one of them. Maybe investors will own them and put them into networks like Lyft and Sidecar which will then dispatch them to pick us up and take us where we want to go. Self driving cars may turn out to be more like income producing homes, apartments, and oil wells than something that sits in your garage.


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