Autonomous Vehicles
Congratulations to San Francisco
In a surprising turn of events, San Francisco has given the green light for the expansion of autonomous vehicles by Cruise and Waymo. I say surprising because of how much negative sentiment I’ve seen on Twitter towards AVs, and how historically averse to new technologies SF usually is. Yet here we are, with both car companies now approved to operate 24/7 in SF.
Seriously incredible – I can’t wait to try an AV out next time I’m in the Bay Area.
As someone who once worked in the e-scooter industry, where regulatory challenges were ever-present, this move highlights how the relationship between “real-world” companies and local regulators now needs to be tighter than ever. And hats off to the AV companies, because I bet they are pouring everything they can into making sure their relationship with government officials is as tight as possible.
The allure of autonomous vehicles lies in their potential to revolutionize transportation safety and efficiency. These vehicles, driven by statistics and precision, often adhere strictly to rules—a contrast to the dynamic and sometimes erratic nature of human driving. This characteristic has sparked mixed reactions, with some finding frustration in a vehicle that “drives like a nerd” (can’t find the Tweet source but it’s out there) and follows speed limits and traffic rules to the tee. It is quite funny to see people express disappointment that an unmanned vehicle is too compliant when that’s what you’d probably prefer.
Now that AVs are getting regulatory approval, commercialization and profitability seems to be the next hurdle.
You could compare AVs to e-scooters because e-scooter riders generally pay the equivalent to a typical rideshare fare for each trip they take. People are surprised by this because they’d assume a tiny do-it-yourself kind of vehicle like a scooter should be cheaper, but riders consistently pay the same and sometimes more for an e-scooter trip.
The math on the e-scooter business is quite good with the caveat that you have to run the business with extremely solid operations because more than half of the equation on an e-scooter’s expenses is everything leading up to putting it on the street (repair, charging, operations). The math is good because…
People are willing to pay (relatively) a lot for a convenient and quick ride and
The e-scooter itself can cost as little as only a couple hundred bucks.
When it comes to AVs though, you’re looking at a massive increase in price for the whole vehicle, and therefore much more money to pay it off. The good news is that you don’t have to hire a human to operate the vehicle, but the bad news is that the vehicle is much much more expensive with an estimate of $50,000 to produce at scale. There’s some really light napkin math you could do to see how that payback period can be decent when you have a customer that’s willing to pay, but the vehicles themselves are still pricey.
AV companies could probably sell ad space on the side of the vehicle and inside the seating area along with light concessions in the car for some added revenue, so it’ll be exciting to see how AVs can monetize outside of just a the ride fare.
Commercial viability abroad can be a challenge though. We faced difficulties with getting Bird into Latin America purely from how expensive importing e-scooters into those countries is, often 2x the cost of the vehicle itself. When considering the relative purchasing power of even the larger LATAM cities, the rougher road conditions, and the relative crime, it just makes for a really complicated business for light assets. I’m not sure what hoops AVs will have to jump through vs. what requirements there were for e-scooters, but unless they bring the cost of the vehicle down severely and/or move assembly locally to these countries, it could be a very long time before LATAM countries get to experience AVs.
There are some obvious benefits for AVs though, and I’m sure you’ve heard most of these arguments, but I wanted to reiterate them and add what I’m observing to be additional “secondary” benefits to automating a historically deadly task.
There’s of course just the basic productivity element, where getting into a car feels more like a subway ride where you can do something else besides focusing on the road. It’s completely obvious too that fewer distracted drivers at the wheel of moving vehicles would make for safer streets.
But what I’m probably most excited about is how AVs help people reduce their car dependency.
While living in LA I didn’t personally own a car, but I was fortunate to live with two roommates who both had cars that I could borrow (thanks guys). But not owning a car caused me to think of getting around as a portfolio, and most of the times combining modes of transportation actually would get me to where I needed to go faster than driving a car and then spending time looking for a place to park it.
Autonomous vehicles add another option into the mix, and make it easier to consider not owning a private vehicle. And longer-term car rentals like Kyte still allow the opportunity to travel outside of the city, but still require a little bit of up-front planning. Nevertheless, being able to take a scooter to a bus to an AV or any mix of that combination could make for a safer, more efficient way for us all to get around. The biggest shift in my mindset of not owning a car was how I thought more holistically about how to get around.
I think the timing of AVs is going to be great for both citizens and cities, as individuals can shift their transportation expenses of owning a single car (and all of the insurance, maintenance, gas, etc. that comes with it) to a more on-demand expense. I still believe that there are immense costs of vehicle ownership that most car owners aren’t aware of, and I admittedly get sticker shock sometimes when I have to take an Uber, but I think it’s an expectation that we’ll have to shift in our lives as AVs become more prevalent.
One thing though that is worth addressing is that in the anti-private-car ownership community there seems to be a flavor of delusion that simply eliminating cars is the way to fix traffic and the environment. We preached it all the time at Bird because it was so core to our mission. But reducing car ownership needs to come with realistic alternatives, policy, and infrastructure.
It will be fascinating to see what happens to our homes, streets, and cities when cars become more fluid.
How might neighborhoods look when you don’t have garages to store your vehicle?
How might meeting new people look when you car-pool everywhere?
How many lives might we save because an AV was able to brake much faster than a human driver could?
How many more people would feel safe trying out an e-scooter for the first time on a roadway where AVs give more generous space to micromobility riders on the road?
I’m hopeful that AVs can be an easier on-ramp for single vehicle owners to the car-free life, and that skeptical cities can look to San Francisco’s example and provide the space and optimism for these types of companies to continue to change the way we move in more communities around the world.
Read last week’s post on wrestling with discipline, or my post on significance in our work if you haven’t already.