Are Waymo’s Robotaxis Taking a Bite Out of Driver Pay?
Waymo’s next city will be Miami, Uber to launch robotaxis in UAE, and African fintech Moove to run Waymo’s fleet operations.
Top Stories of the Week
Waymo to expand to Miami, aims to launch robotaxi service there in 2026 (link). I was on vacation in Japan this past week (hence the late edition of TDD) so I didn’t have time to dig into this story until now. But am I the only one that noticed the Miami launch for public rides won’t actually happen until 2026?! That’s a lifetime from now and highlights two things: (1) Waymo’s slow and steady roll-out strategy, and (2) how hard driverless vehicles are to scale when you own the capex.
I also take issue with the notion that Miami is a ‘harsh weather city’; I don’t think lidar minds a little humidity and obviously heat is no problem either (see: Phoenix). It may be a while before AVs can handle snow or inclement weather, so I think it makes sense to launch in all of the AV-friendly ridehail cities to plant a flag and get a first mover advantage.
I wouldn’t be shocked if Waymo announces a true ‘cold weather city’ private launch for 2025 though so they can get some data on adverse weather though. Could also be a good business opportunity as ridehail demand tends to spike during inclement weather, since folks don’t want to walk, bike, or take public transportation in the rain/snow.
The expansion into Miami is indicative of Waymo’s growing confidence in operating its self-driving vehicles in harsher weather conditions in large metropolitan areas in the U.S.
Waymo To Launch Robotaxi In Miami In 2026 With Logistics Partner Moove (link). Moove has been on my radar for a while since they raised $100 million in March with Uber as their lead investor. I don’t know any of the details behind that deal but the amount raised stood out, and the fact that Uber was the lead investor. Since then, Moove has been a top Uber partner in regions like London where they are helping lead the EV charge (25% of Uber’s miles in London are now done by EVs).
This partnership between Moove and Waymo makes a lot of sense though since the former has experience running and operating a fleet. I never quite understood why Waymo would outsource this to Uber as part of their Austin and Atlanta deals and figured Uber would assign this work to one of their US-based fleet partners.
Uber and Lyft drivers say Waymo's robotaxis are hurting their earnings in Phoenix and LA (link, no paywall). Human rideshare drivers hate AVs. So I was a bit skeptical of this headline at first, assuming that Waymos were a convenient scapegoat for drivers. Especially seeing as driver supply is at an all time high, which means driver earnings per hour have slowly crept down over the past few years.
But in theory, this headline makes sense. More ‘drivers’ means more supply and since Waymo charges about the same as Uber and Lyft, I don’t see this inducing enough demand to offset the increased supply. Thus, drivers should earn less. But let’s check the math:
Waymo says they are now doing 175,000 rides/week across SF, Phoenix and LA (or 25,000 rides per day across 3 regions). Let’s assume 10,000 rides per day in LA, 10,000 in SF and 5,000 in Phoenix. As of Sep. 2024 in Chicago, there were about 246,000 ridehail trips per day. If we conservatively assume LA is about the same number. That means Waymo is doing 4% (10k/246k) of current ridehail volume in LA. So it’s plausible that Waymo is starting to make a small dent in driver’s income by adding more supply to the market. But if I had to pick an arbitrary meaningful threshold, I would put the number at 10%.
Once Waymo goes above 10% market share, I think that would have a tangible negative impact on driver’s earnings. For Waymo to go above 10% though, they would need to get their costs down, since remember the whole point of AVs is to be cheaper than Uber and Lyft. But once they get costs down, that would induce more demand. So I don’t think it’s all doom and gloom just yet for human drivers.
AVs or Humans behaving badly
Geez this WAYMO drove right through a fresh car accident scene (link).
‘Self-driving’ Tesla blasts through stop sign, sparks one of Oregon’s 1st autonomous-driving lawsuits (link). Michael Ward is seeking $745,000 in damages after a Tesla in Full Self-Driving mode ran a stop sign and crashed into his car, causing serious injuries. The suit claims he was traveling with the flow of traffic and had the right-of-way.
Other Stuff
Waymo’s ridership doubled in California. Here are how many people took robotaxi rides (link, no paywall).
Uber Launches First Robotaxi Service Outside of US in Abu Dhabi (link, no paywall).
Waymo will be operating in 10 cities "robustly" in 2025 according to Sundar Pichai, CEO of Google and Alphabet (h/t Grayson Brulte).
I Used a Self-Driving Taxi for a Week. Things Got Weird (link, no paywall). This reporter spent a week relying solely on Waymos in Austin. On day one, the car drove off mid-trip with their belongings—a mishap resolved by Waymo’s customer service. One of the things this experiment highlighted was how Waymos avoid major highways and high-speed roads in favor of quieter inner streets sparking some insights into safer urban design.
Car registration data in CA: Waymo bought 2,000 Jaguars in 2024 (link).
In Food Delivery, Autonomous Vehicles Struggle To Deliver (link). There will be some operational challenges with AVs and delivery but I think on a margin-basis, there’s an interesting opportunity here. A majority of human delivery driver pay is tips, and the nice thing about AVs is that you don’t have to tip. So right off the bat, the delivery cost is more than cut in half.
Until next week.
-Harry