Weekly brief: Robo-taxi rides could be a free service

When people ruminate about a future full of self-driving cars, the topic usually turns to safety and time.

Think about a world in which the 37,000 road deaths that happen every year on American roadways, most owing to human error, could be eliminated. Think, too, about all the time we soon will have at our disposal that used to be consumed by driving. Time to sleep. Time to watch Netflix. Time to work. Time to chat with friends. Self-driving cars, the thinking goes, could do the impossible: make us safer and add a couple extra hours to our days.

Or they just might make us lazier, more sedentary, less healthy, and more exposed to noxious fumes, as a report last week in Wired suggested. I’m not here to argue which way the pendulum will swing. My bet is that we’ll land somewhere in the middle, with more time and more ways to fritter it away and fewer road deaths but way more than zero. However, that’s a debate for the future to settle.

In the meantime, self-driving cars may exert their largest influence in a sphere of our lives that I had never stopped to consider before. Money. Fact is, we spend a lot of money on our cars. Americans spend most on their houses first, their transportation second, and food third. Those three things add up to 62% of their annual expenses. Imagine if those transportation costs were largely eliminated. That would have a profound impact on people’s ability to save, eliminate debt and provide for a higher quality of life. Last week Waymo’s CEO John Krafcik suggested that this may not be a stretch.

Let me be clear: when Waymo launches its robo-taxi service in the next several months, it will cost money. Probably a little less than Uber or Lyft rides but far from free. This is what I had always expected with robo-taxi rides. With the cost of drivers removed, companies like Uber, Lyft or Waymo would be able to cut their rates, not eliminate them completely.

What I had failed to see, however, is the opportunity that robo-taxis may offer businesses to bring customers directly to their doors. Consider if a couple wants to go out for Italian food. There are three Italian restaurants within a 10-mile radius, which one will they choose? The one with the best reviews, right? Wrong! How about the restaurant that will pay for their ride?

Waymo’s CEO said this a business model that his company is seriously considering. Google thrives on sponsored search. Why can’t Waymo thrive on sponsored rides? After all, what is an $8 cab ride to a bar if that bar can rake in $200 in cocktails and Jose Cuervo shots? Everyone wins.

Now is this a guarantee? Absolutely not. Could it happen at least part of the time? You bet. Next round’s on me.


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