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Waymo the Leapfrog

When people talk about self-driving cars, they usually talk about them as though they’re in the future, still a little opaque and unproven. But as so often, the future is already here: it’s just not evenly distributed. For the last few years, Waymo has been operating fully driverless cars in Phoenix and San Francisco. They’re commercially available. Anyone can download the app and hail one: I was recently passing through SF, and took the opportunity to make a few trips by Waymo. I found the experience hugely impressive, to the point that it made very clear what some parts of our future will look like.

I think a decent first-order approximation, before factoring in any next-generation technology advances or economies of scale, is that Waymo could bring down operating costs 70% relative to Uber. Ten years ago, I expected many vendors to emerge, but the reality has been that acquiring customers is so expensive and the margins are so thin that Uber has been able to take over the market, with small (shrinking) slices for Lyft and for local alternatives (primarily outside the US). Trying to “build” anything, even if it’s just sectioning off an existing part of a road with some paint, invites months or years of local political debate, environmental litigation, and runaway costs far beyond any reasonable imagination.

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