Uber’s Popularity Means Driverless Cars Won’t Be Ride-For-Hire

I’m not 100% sure I believe this, but I think that the argument is fairly persuasive.  Tell me what you think:

Assuming that we come to a work much like our own, but in which it is both technologically and legally possible for cars to drive fully autonomously (that is, without an attentive passenger behind the wheel) in at least a substantial majority of all driving situations, and in which such technology is not absurdly, prohibitively expensive, what will the ownership model of those cars be?

Many people leap to the conclusion that such vehicles will be ride-for-hire, which is to say they’ll be rented for the duration of a single trip, like taxis or Uber.  In fact, many people think that specifically Uber will come to dominate this world.

But let’s look at the present world.  In this world, taking an Uber is more expensive than car ownership.  In particular, many people who actually have bought a car still take Uber some times (I would wager this is the majority of all Uber rides).  Until fairly recently, Uber wasn’t just more expensive than driving your car, it was way more expensive.  And yet, Uber was pretty popular.

Why are people paying for Uber rather than taking their own cars?  In a word, convenience.  The convenience of not dealing with parking, of being able to ride while impaired, etc. are worth paying a premium for.

But in the driverless car future, the more convenient option will be owning a car.  The situation will be reversed: Uber will be cheaper (as you no longer have to pay the driver’s salary), but less convenient (you won’t be able to leave your stuff in the car, you will have to deal with supply shortages, you will have to wait longer for a car to arrive).  We already can see that people are willing to pay a considerable premium for convenience.  Thus, in this future, people will choose to own rather than take the cheaper but less convenient ride-for-hire.

Well, it’s a theory, at least.  Of course it depends on how much the cost savings is, and how much people value the different conveniences that owned driverless cars will have versus the ones that modern Ubers have.


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