Has Uber already beaten private ownership on cost?
Today, various experts, like CR and the AAA rate the cost of private car ownership anywhere from 40 to 60 cents per mile, plus parking. That depends on your usage patterns, what car you buy and its age, plus a few other factors. Many people, though, pretend that using their car only costs the 8-12 cents/mile for gasoline. (A better estimate of the truly incremental cost without factoring in those things that don't vary with the miles is around 25 cents/mile.)
Riding in an Uber costs from $1.50 to $2/mile, and nobody has any illusions about it, because you pay the full cost right there. At 3x to 4x the price (or 7x the price for those who only count the incremental costs) it's a luxury.
I have often reported here on how robotaxis will cut the price to 25 to 40 cents/mile blowing up the economics of car travel. That will happen, but what's surprising is it's already happening.
Today, many people are switching to services like Uber over use of their private car. That's because they are factoring in the value of their own time, as well as the cost of parking. I have been doing this myself, and there's an analysis of the costs and the switching at TheConversation.
Even though I own a car, it's been a couple of years since I drove it to the airport. The combination of the cost of airport parking, the cost of my own time, and the convenience and time-saving of going right to the curb rather than taking a shuttle from a parking lot have made it a win. The 35 mile trip tends to cost about $55 (x2) in Lyft/Uber and that's a lot more than the $35 to use my own car at 50 cents/mile. Add just a few days parking, though, and it starts to get close enough that it's easy to make up the rest of the difference from the value of my own time.
I charge my clients good money for my time, and while most people aren't quite willing to value their own time at the rate they sell it for, every middle-class and above person should value the 1.5 hours involved in driving and shuttles at at least $30.
Today, I just fiddle with my phone on the trip. In the future I'll be able to do a lot more. The fake "robocar" is already winning even at 3x the price.
Other analysis has shown that in the dense cities which have very expensive parking (and personal garages) that using ride services is a win even without putting more than a minimum wage value on your time. For example, parking at San Francisco hotels is $35 to $50 per day, making it easy to justify Uber use for a 2-3 conference where I stay in the hotel.
The first robotaxis won't be 50 cents/mile; I think that $1/mile is a likely early target. Even that should blow the doors off private car use, at least financially, for many people. At 50 cents/mile (or my predicted 30 cents) the private car is going to have a very hard slog.
Not all private car ownership will go away. Outside cities, robotaxi service will not be conveniently available on short notice. Some people will just resist the idea. Some people love to keep stuff in their cars and have it available everywhere they go -- particularly families with small children. But for the rest, the economic pressures will be very strong.
Cars designed for the rear seat
One thing I expect we'll see soon is a car from the major automakers designed primarily to be used with Uber and Lyft.
Of course, there have always been high-end luxury cars -- limousines -- aimed at the chauffeured driving market. And there are cars like the Nissan NV200 and the London Taxi Company TX4 designed for that market. The London vehicle, with its rear facing seats, is the most different from a typical vehicle.
A car sold to be an Uber/Lyft would still be somebody's car, unless it's one of the ones leased just for this use. But many people almost never use their back seats -- or even passenger seats -- and so they should be open to more radical designs.
I would like to see:
- The ability to recline, or even sleep.
- Power ports for charging my devices
- A large screen I can connect to for video or working
- Tray table (I've seen that in a few offerings)
Today, because back seats are mostly unoccupied except in family cars, not much attention is given to them. They usually don't have any recline (and can't because of the trunk behind them.)
One design might be to have the rear seat on the passenger side flip up so that the front passenger seat can go back 1 or two feet, halfway into the back. Then it could recline, and get a privacy shield. (You can't put in a privacy shield now because the driver needs to see out the passenger side.) That's good for one, but doesn't handle two.
Naturally such a car would command a higher rate, though if it gets too much higher, it breaks some of the economics I list above, where driving and being driven are near equal in cost.
How much cheaper will private car ownership get?
Private car ownership will also drop in the robocar world. An electric sedan, with lower insurance costs, minimal parking costs, lower fuel costs and lower interior costs (no need for adjustable everything or fancy infotainment) will be cheaper than today's cars, though not as cheap as the same thing half-size for one passenger.
The other key advantage of the taxi is it wears out in 5 years while the private car takes 20 years. When a car is a computer, who wants a 10 year old computer? In fact, the private robocars will need to be designed so their computing and sensors can be field upgraded if things are going to work at all.