The future timeline of robocars -- 2020s land rush, 2030s maturity
One of the most frequent questions people ask about robocars is when they will arrive for the public. The answer is difficult and not simple for many reasons, but one of the most important points is that it won't happen at the same time in every places. Some pilot towns will have them very soon; other places may not see them for decades. Predicting dates for future technologies is always extremely risky, so take much of this with several grains of salt, but here is my best guess for the timeline.
My short summary answer to the question is as follows:
- The next 2-3 years will see pilot projects in various cities around the world, starting with Waymo in Phoenix, and others in San Francisco, Tokyo, Singapore and a few others.
- In the early 2020s one or more pilots will demonstrate safety, regulatory consensus and as time passes, business models.
- Once these are established, particularly a working business model, the first player will strike out to dominate the most lucrative and "doable" cities.
- The second player will start somewhat later, going mostly after different cities
- As more players come online (2023 timeframe) a "land rush" begins as players grab virgin cities. The land rush will cost hundreds of billions of dollars, but the players have that much money
- Once the most lucrative cities are claimed (mid-late 2020s) the most lucrative cities become competitive. Other countries with more virgin markets are developed
- By 2030, most major cities have some level of service. Major ones have competition. In addition, private cars are deployed in many of these cities.
Independent of this timeline for robotaxis, some car companies will sell cars for private ownership that have self-drive abilities. This may begin on highways but will move to urban and rural street operation. This service begins after the first robotaxi deployments, since it's actually more challenging to build a car to the level where you can sell it to a customer and not have it under your regular control, however it is not too far after, and highway service could begin sooner. This is governed by how quickly the companies can deploy good map and other data services for each territory where driving is to be available.
Land Rush: The no-competition era
One of the most striking realizations is we may see an era of minimal competition in the 2020s. Deploying a fleet of robotaxis to a city is a very non-trivial thing. You need to:
- Fully map the driving zone
- Customize the software to local driving rules and unwritten practices
- Build good relations with the local governments and police, of which there may be several
- Spend several hundred million dollars on the fleet
- Hire a local staff
- Arrange for human drivers for service outside the robotic operation area
- Contract or set up with local providers for maintenance, charging, fuel, cleaning, parking
- Do initial promotion -- though PR will be fairly easy
- In some cases, localize apps and documentation in local languages
- Put systems in place for updating maps and other databases
For some companies, the hundreds of millions of dollars will be a barrier. For other companies, with ready capital, it will be the management bandwidth that will be an issue. This is not like Uber, which can come to a new city with a tiny staff. Even a company the size of Waymo or GM won't be able to deploy in more than a few cities at once.
Thus, with most of the cities unclaimed, companies will probably prefer to deploy in unclaimed cities, rather than go head to head with a competitor. A few cities will get competition at the start -- probably the San Francisco Bay Area (because so many companies are based there) and Manhattan.
During the no-competition period, the only competition will be companies like Uber and Lyft on the high end and personal cars on the "low" end. Pricing at first will be lower than theirs, but possibly not that much lower without any competitive pressure. Those services run $2/mile. A robotaxi service quickly out-competes them at a bit over $1/mile. Driving a personal car is about 40 to 60 cents/mile, but involves a lot of work and hassle and up-front investment. Riding transit varies wildly in cost and is highly subsidized. Typical transit tickets are $2 to $3 and thus are more expensive on short trips, and in most instances less convenient.
Even at $1/mile, companies will lose money in the early years, not because the raw cost of goods sold is too high, but because they still will have large non-recurring expenses for development, refinement and market building. Uber takes 50 cents/mile from drivers and provides no physical services except insurance for that, and it loses money.
The Land Rush
With all these factors, companies will decide which cities to go after. Of course, they will also evaluate how easy it is to drive in that city -- Phoenix is much easier than Boston -- and the presence of other factors like bad weather, snow, or bizarre driving rules. The density of the city will play a factor, the strength of its transit system and the wealth of its citizens. The friendliness of the city government will also play a factor.
Companies will evaluate all these terms, as well as competition (present or future) and pick the next city on their list, then deploy. As fast as they can, but not too fast.
Getting people out of private cars
Companies will be eager to lose money to claim territory, though. The brass ring is in sight, and worth spending on. They might even price it closer to the eventual prices (which are lower than private car ownership) just to get people used to the idea, and to take them away from private car rides into the robotaxi.
The early years will see pricing experimentation as well. Pricing by the mile is natural, but people with private cars don't pay for car travel that way. They pay a monthly leasing or loan fee, pay for insurance and do maintenance twice a year, licence it once a year and fill up the tank once or twice a week. The only thing they pay per trip is parking -- which you won't see with robotaxis.
Since the long term game involves getting people to give up private car use for robotaxi use, companies may be quite aggressive trying to see what it takes to make that happen.
First "mover" advantage?
There will be a land rush because most people believe in the first mover advantage. They will spend a lot to be the first to deploy in a city in the hope they can keep it. Even though they know that sometimes that doesn't work, they also know that sometimes it does, and it's the only bet to make in the early days.
Even in the ride business, the thing we know of as "Uber" (really UberX) was done first by Sidecar and Lyft in San Francisco. Sidecar is dead now and Lyft is the much smaller company. At the same time, even once Uber came to dominate, Lyft was able to make itself grow faster and become a threat to Uber again.
In the technology world, the first mover often fails. One way it fails is that the second mover comes in with a whole new generation of technology, since generations are so short in this game. So even though Waymo is #1 and will take over several cities, 3 years later they will face somebody with cars designed 3 years later.
Earlier I wrote some detailed analysis of factors in robotaxi competition. When the time comes for competition, there should be many factors to compete on. Even so, being the first and most well known is going to be an advantage people want to have.
There will also be a network advantage. Visitors will be heavy robotaxi users since they have zero chance of owning a car and rarely use transit. Visitors may use the service they already know and have an account with, even if it's not the first mover in town.
The 2030s -- the maturity era
In the United States and a few other countries, the 2030s will be the more mature era, with 3rd generation cars present and competition in many cities. In other parts of the world, things may just be getting started. Once a city gets enough service that people are getting ready to give up private cars, people will sell those cars to folks in cities and countries that don't have robotaxi service.
In addition, rural and exurb areas will not have robotaxi service until much later. They will see deployment of privately owned robocars, but there in many cases the turnover cycle will be slower. They might even be buying the minor glut of used cars from cities taken over by robotaxis.
The course of this will be altered by the timing of certain technological breakthroughs.
- Low cost LIDAR seems all but assured for the early 2020s, making vehicle cost reasonable
- Some day, computer vision will be sufficient, allowing a car to be built with just cameras and radar, which will lower costs even more
- Some people hope for cars that can "drive without a map" -- meaning minimal mapping and just the use of the type of maps already found in your phone. This would allow deployment to a new city to be much cheaper.
- eVTOL vehicles -- "flying cars" -- will also start arriving. They will have an obvious superiority for a growing subset of trips, competing with, but also working with the robotaxis. (Because the eVTOL can't land everywhere due to trees, powerlines, noise and other factors, people will fly it to a place where a robotaxi is waiting.)
The 2040s -- you still drive a car?
While human driving will not get completely banned for decades to come, in the mature cities it will become the more odd choice by around this time. Almost like riding a horse was a few decades after the car became mainstream. Certain zones (such as downtown core zones) will have moved to not allow human driving without a special permit.
I have much less understanding of how this will play in China, where the government will exercise much more control. China may designate cities as the first to use robocars, and may even alter local city laws to facilitate. It will probably select a small number of (Chinese) companies which will get licences to operate in those cities. Growth will be large, and eventually those Chinese companies will be ready to enter the land rush in the rest of the world. I am less certain of the dates.
This timeline suggests that there is not just one winner. As long as there are virgin cities to deploy in, new companies can continue to spring up. Of course, there can and will be consolidation after that, but probably not as much on the global scale. Countries will consider the robotaxi system to be part of critical infrastructure and enact laws to help local players and prevent total dominance, especially foreign dominance.
This also means that, even though Waymo is very far ahead of everybody else, it is unlikely to win the entire game. At a certain point in the game, their primacy will no longer be a competitive edge. Their maturity will offer them the claim of greater safety, but after a certain point, all competitors will be seen as of adequate safety or they will leave the field. Other competitive factors will dominate.