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Why It's Getting Harder for Uber to Break the Law - SLATE 12/22/16

Discussion in 'News' started by Michael - Cleveland, Dec 29, 2016.

  1. Michael - Cleveland

    Michael - Cleveland Well-Known Member

    Location:
    Great Lakes
    Driving:
    UberSELECT
    Why It's Getting Harder for Uber to Break the Law
    By Henry Grabar / SLATE 12.22.16
    http://www.slate.com/blogs/moneybox..._shows_how_owning_cars_is_changing_uber_s.html


    On Wednesday, an Uber spokesperson said, California stripped the registration from the autonomous Volvos that the company had put into service in San Francisco...

    Uber has long flouted local laws until they could be bent to suit its operations or pre-empted in the statehouse. As the San Francisco case demonstrates, that posture gets harder to maintain as the company shifts from software to hardware. The days of Uber playing the outlaw startup are vanishing as the company acquires millions in fixed assets
     
  2. player81

    player81 Active Member

    Location:
    Washington, DC
    Driving:
    UberX
    Yeah they can't argue the "we're just a tech company" line if they actually own cabs. Driverless cabs should be required to have same commercial insurance as regular cabs. I hope that hits them in the pocket more than paying human drivers a decent rate
     
  3. Michael - Cleveland

    Michael - Cleveland Well-Known Member

    Location:
    Great Lakes
    Driving:
    UberSELECT
    That assumes of course that in the long run they will actually own the cars. My own wild-ass guess is that eventually they will outsource all of that messy ownership stuff to professional fleet management companies (such as car rental companies) who will own and operate the cars as efficiently as possible.
     
  4. grams777

    grams777 Moderator Moderator

    Location:
    Nashville
    If Uber or another company owns the cars specially for this purpose, they would seem to be commercially owned by the company and not truly under the TNC definitions anymore. Then they are more like a cab, livery, or limo company. TNC is usually defined as drivers using their personal vehicles:

    IMG_0245.PNG

    Further, there are studies that say even in the best case scenario the cost to operate self driving cars will not be any cheaper than the existing UberX rates.

    https://www.extremetech.com/extreme/176672-autonomous-taxis-why-you-may-never-own-a-self-driving-car

    Even if the rate gets to .35 per driven mile, double that for dead miles. Now it's a cost of .70 per paid mile just in hard costs for the car. Add in about a 25% profit and the rate would have to be near $1 per paid mile.

    Some studies place the rate about twice that high however. That would require charging a rate of almost $2 per paid mile.
     
  5. Michael - Cleveland

    Michael - Cleveland Well-Known Member

    Location:
    Great Lakes
    Driving:
    UberSELECT
    Using driver's personal vehicles that's true - but eliminate the driver and the car can just park somewhere for hours waiting for its next nearby ride request. The whole point is that a TNC can use its computers and collective data to distribute cars in a city efficiently - improving the pick-up times and reducing dead miles. Now consider that these autonomous cars will eventually all be electric and/or extremely fuel efficient hybrids and you can start to see the reduction in cost to operate them.
     
    player81 likes this.

  6. grams777

    grams777 Moderator Moderator

    Location:
    Nashville
    Maybe. But that's all best case scenarios. A lot of cars will have to take trips in one direction and come back dead based on demand and events. Further there will be little elastic supply. Will Uber have enough cars idle all week long just to meet weekend demand? The fixed costs of that would be huge.

    Also the .35 per mile is the lowest study and maybe not realistic. A more in depth study placed the full cost in best case at .60 - $1 per driven mile including more realistic costs for cleaning and things.

    As it is now, for the most part drivers are driving for little and don't truly make that much if anything. They already own the cars for other purposes so the fixed costs are somewhat shared. And it allows for variable peak supply of cars at a relatively little extra cost.

    There may be a reason for the cars, but when all is said and done I highly doubt they could operate lower than current X rates.
     
  7. grams777

    grams777 Moderator Moderator

    Location:
    Nashville
    Here's a pretty detailed study on the likely costs and implications of operating autonomous vehicles:

    http://www.vtpi.org/avip.pdf

    Excerpt:

    IMG_0246.PNG
     
    Last edited: Dec 29, 2016
    Adieu, circle1, roadman and 2 others like this.
  8. player81

    player81 Active Member

    Location:
    Washington, DC
    Driving:
    UberX
    Uber drivers will be worse to robot cars than cab drivers are to Uber drivers. Who's gonna see me bust the glass and throw a bag of poop in there?
     
    Adieu, tohunt4me, Big JJ and 2 others like this.
  9. grams777

    grams777 Moderator Moderator

    Location:
    Nashville
    Of interest, in the study quoted above, they break down a considerable amount of expenses to cover cleanup and damages:

    • Cleaning and vandalism. Taxis and public transit vehicles require frequent cleaning when passengers litter, smoke, spill food and drinks, spit or bring pets, and repairs when vehicles are vandalized. To minimize these risks self-driving taxis will need hardened surfaces, durable fabrics, minimal moving parts, electronic surveillance, and aggressive enforcement. Assuming that vehicles make 200 weekly trips, 5-15% of passengers leave messes with $10-30 average cleanup costs, and 1-4% vandalize vehicles with $50-100 average repair costs, these costs would average between $200 and $1,700 per vehicle-week.
     
  10. Michael - Cleveland

    Michael - Cleveland Well-Known Member

    Location:
    Great Lakes
    Driving:
    UberSELECT
    Right now I can rent a car and drive it 1,000 miles for the cost of gas + around $35. If the professional fleet management companies (car rental companies) were losing money on that rental, they wouldn't be in the business. The profit is in the ability to efficiently utilize the vehicles and depreciate them rapidly.
     
  11. grams777

    grams777 Moderator Moderator

    Location:
    Nashville
    Sure. That's .35 per mile plus gas per driven mile for a personal use car rental. Now add commercial use and dead miles and extra idle cars needed for peak demand and damages and cleaning for hundreds of trips a week and an extra $5k plus of self driving equipment.

    Take morning airport runs just as one example. Are all the cars going to park at the airport and wait for return trips while no cars are left for the rest of the city?

    Then add nights and weekends and events when demand increases 2-3x. What will those cars do the rest of the week with no demand for them.
     
  12. Michael - Cleveland

    Michael - Cleveland Well-Known Member

    Location:
    Great Lakes
    Driving:
    UberSELECT
    Again, that's just assumption. I assume that since cars are already decked out with incredibly sophisticated cameras and radar and sensors, that adding in what is needed to monitor pax behavior will be a no-brainer. Light a cigarette in a car - it comes to stop, the windows roll-down and the doors open. Damage something and your credit card is charged $500 or more. Car requires clean-up - it drives itself to a service facility.
     
  13. grams777

    grams777 Moderator Moderator

    Location:
    Nashville
    I'll bet Uber will do a much better job of taking cleaning fees seriously once it's their cars.
     
  14. Michael - Cleveland

    Michael - Cleveland Well-Known Member

    Location:
    Great Lakes
    Driving:
    UberSELECT
    Nope - that's $0.035/mile (three and half cents). Commercial insurance for driverless cars will be much less than commercial insurance is for me because the cars get in fewer accidents (eliminating human error - the cause of nearly all accidents). Even now, I can buy a commercial policy for $4,000/yr. I'd be stunned if commercial liability insurance for a driverless car owned by a fleet management company was not (eventually) lower than the cost of full coverage paid for by an individual for personal use of a vehicle. But even at $4,000/yr, that's nly $0.04/mi for a car utilized only 100,000 miles/yr.
     
    Last edited: Jan 1, 2017
  15. grams777

    grams777 Moderator Moderator

    Location:
    Nashville
    I don't think anyone is making money if they're renting you a car at the rate of $3,500 for 100k miles. That's not realistic for autonomous car operations or much else for that matter. It may serve some anecdotal purpose, but there's no viable study for that being a real cost to operate a vehicle.

    I'd say to at least use something reasonable and objective as a starting point such as one of the studies quoted above or similar.

    http://www.vtpi.org/avip.pdf

    https://www.extremetech.com/extreme/176672-autonomous-taxis-why-you-may-never-own-a-self-driving-car

    http://www.caee.utexas.edu/prof/kockelman/public_html/TRB16SAEVsModeChoice.pdf

    Given all this, there might be two right answers where the cost is both high and low at the same time.

    The way it could work (for Uber) is to eventually get individuals to buy and mechanically maintain the cars. Then pay the owners say 10 cents per mile or something well below what it fully costs to own and operate. That solves the private non commercial ownership and variable supply issues as well. Perhaps Uber could even arrange for the maintenance and repairs and subtract them from the owner rental proceeds.

    Uber could summon the cars for sharing only as needed. Maybe it has tens or hundreds of thousands of cars signed up in different cities to be used at will. And it could perhaps even have 1,000 of them parked near the airport after AM airport runs waiting for later return trips. Then it could do the same thing on weekend nights and events. This way they avoid the fixed costs of having too many cars doing nothing the rest of the time.

    The owners might be happy. If their car goes 100 miles a day for Uber and they get paid $300 a month. Perhaps this is the end game.

    The owners might be at work all thrilled that their car is 'earning them money' during the day. Or 'making money' for them while they sleep.

    Of course, there's the slight problem of an extra 30-40k miles per year on the car. But that's the owners issue when paying for maintenance, repairs and after 5 years it's got over 200k miles on it and probably needs to be replaced.
     
    Last edited: Dec 29, 2016
  16. Michael - Cleveland

    Michael - Cleveland Well-Known Member

    Location:
    Great Lakes
    Driving:
    UberSELECT
    It seems to me you're considering only expenses and not the whole financial picture. The car costs $25,000 new (made-up # it doesn't really matter) - is used for 12 months and 100,000 miles - is fully depreciated (accelerated depreciation) - and is sold as a one year old car for, say, $18,000. The cost for the year, before fuel/maintenance/ins, is $$7,000. The full $25,000 has been depreciated. The $18,000 in resale is revenue. The car generated 100,000 miles of revenues (approximately $50,000 at HALF current TNC rates).

    That's $68,000 of revenue on what at most is around $20,000 in expense
    ($7,000 + $4,000 fuel + $4,000 ins + $1,000 in maintenance + $4,000 in whatever)
    A gross profit of $48,000.

    That's one of the models being discussed ( and is already being pursued by Tesla)

    I wouldn't be surprised to see the fleet management companies cover the cities/metro areas with autonomous vehicles for the TNCs - and the TNCs still using drivers/cars in areas with less dense populations.
     
  17. grams777

    grams777 Moderator Moderator

    Location:
    Nashville
    Another thing that could reduce costs is if they siphon off more of the normal car rental demand. A lot that demand is during business days and relatively slow over the weekends. That would help balance out a fixed fleet size scenario.

    Much of the problem with things now is too many cars doing nothing with maybe paid miles for only 10-20 minutes out of an hour.

    I'd really love to see the structure of fares, surge, damages, number of idle cars, long pickup times for short rides, and letting passengers get away with everything once the cars are owned by Uber (or other fleet management).

    It's easy enough for Uber to get some driver to go 20 minutes out to the fringe of a coverage zone for a 1 mile trip then dead head back since there are no other rides there. Uber still profits while the driver takes it big in the shorts.

    Once Uber has skin in the game, I'll bet that new advanced fixed fare starts compensating themselves for that.

    So I think there will also be better revenue streams for Uber that would be different than drivers get now. Smoke in the car? $300 damages. Puke $500. They could probably photo snapshot the condition of the car before and after each ride to see who did what.

    Drive an hour with 40 dead miles for a $4 fare ... doubtful. And I don't think we'd be hearing, oh well, that ground in mud/glitter/ink that got tracked all over is just normal.
     
    Michael - Cleveland likes this.
  18. andaas

    andaas Well-Known Member

    Location:
    Dallas
    Driving:
    Lyft
    Where will these autonomous vehicles stage/wait when unoccupied? I suppose some will return to airports, but these cars may be dozens of miles from an airport, drop a passenger off at a hotel/residence, and potentially not receive another ride request for 15-30 minutes.

    Hotels aren't going to want them clogging their parking facilities, nor will cities and their paid parking. There may be limited staging areas à la taxi stands, but, I don't see a lot of city infrastructure invested in things like this.
     
    grams777 likes this.
  19. Michael - Cleveland

    Michael - Cleveland Well-Known Member

    Location:
    Great Lakes
    Driving:
    UberSELECT
    Articles have been published describing multi-story elevator car garages that can store cars much more space-efficiently than current garages (so much less space is needed when moving cars around without having to consider humans).
     
  20. andaas

    andaas Well-Known Member

    Location:
    Dallas
    Driving:
    Lyft
    These have existed for close to 10 years... but still won't be very helpful for keeping an active fleet of autonomous TNC vehicles. The success of Uber/Lyft depends on having vehicles located spread throughout the network, not stacked in hubs. If you park 100 TNC vehicles in a structure, 25% of those vehicles will never receive a dispatch because there will always be another vehicle closer (not *never*... but so infrequently that 25% of the fleet parked in a 24 hour period will be idle 95% of the time).
     

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