In California, Waymo vehicles are now doing 122,000 weekly rides, the fleet is up to 730 vehicles, and the utilization for each vehicle is up to 24 trips per day (a 33% increase month over month).
Question via e-mail: "Any idea why the pricing still seems somewhat high in LA?"
I'm guessing because their utilization is lower in LA compared to SF. But really, it's up to Waymo to charge whatever they want. They seem to be pricing 10-20% or more than UberX/Lyft on average ime but there's a lot of variability and it all depends on how much Waymo wants to subsidize each trip. I think it makes sense to charge a premium compared to UberX for now though.
The 200+k weekly is ~1 / 22,000 of all US car rides (~4.3B/w). They were at 110k in October, so almost double in four+ months. If the doubling period is 6m., they'll be at 1/1000 rides in mid-2027. Uber and Lyft together are ~210M a week, or 1/20. Uber is shifting share to Waymo in Austin. Factors at play:
1. how quickly can they map new cities
2. how quickly can they add vehicles (and the capital to purchase them)
3. are any cities (perhaps because of state regulators) less suitable to Waymo than to U/L (NYC?)
4. what sub-contracting deal do they negotiate with Uber
5. are any cities more suitable to Waymo than to U/L
6. is Waymo's capital cost low enough to compensate for the loss of drivers' unwittingly subsidizing Uber by depreciating their personal cars (and in other ways)
Can't tell if you're bullish or bearish on Waymo expanding their TAM to personal vehicle ownership but all of your points are valid and in my mind it's a two part act.
Act 1: Compete/partner/etc with ridehail since that's where you can get the highest utilization. I think this will be challenging and doable but the real question is how long it will take and how much money.
Act 2: Waymo costs get even lower than Uber (I'd say 2-3x cheaper) and then people consider replacing their cars (or even just one car in their household) with Waymo + other modes. Or maybe they buy a car with Waymo tech and use it for their own time or put it onto an 'Uber-like' network part of the time to make some money. The latter sounds good in theory but I'm not convinced it will work/be popular in real life.
Thanks for the thoughtful reply. These questions fall into "the more I learn, the less I know" bucket ;-). Here are some frames I am kicking around:
1. In the next 5 years, I assume they double repeatedly.
2. Because they can't compete with UL for marginal supply (capital cost borne by driver), partnering with U to be base supply makes sense. I expect U to try to capture all of the margin in the short term.
3. To my knowledge, which is surely much less than yours, they have yet to demonstrate a repeatable rollout to freeways. That's a huge risk to their TAM. I assume non-freeways are permanently solved—an incredible achievement. (Disclosure: I am socially acquainted with one of the core individuals responsible for this achievement.)
4. A lot depends on the interaction between how quickly they can scale capital, how physically and legally suitable they are for the next few dozen cities, what the market for riders and UL drivers in those cities are, and the extent to which they repeat the U partnership. I have no data here.
5. I also don't have a good estimate for W's cost learning curve, but I assume it is strong. If that's correct, I agree with what I take to be your position that we need reasons why W (or a competitive equivalent) won't take over the US automotive industry by 2040. On the one hand, there may be reasons! On the other hand, a, say, $10,000 HW package plus a substantial monthly fee is a great deal in exchange for sharply higher safety for self and loved ones, sharply lower insurance, and sharply less lost time behind the wheel—especially in the form of not having to chauffeur kids and other non-drivers. I won't pay $70,000 for a conventional car, but I'd pay that in a second for a car that could drive me between SF and LA. C.f. Matt Bell: https://www.mattbell.us/what-i-learned-from-130-hours-in-a-waymo/
6. On that lost point, my instinct about the "rent your AV" market is that you're missing the labor dynamic. Uber and AirBnB arbitrage income-poor people whose modest wealth is locked in physical capital (car/housing). Initial Waymos will be bought mostly by affluent people who have better things to do than manage a $8,000/y side-hustle.
7. Behind all this, cars are deflating incredibly fast. Today's $40,000 EVs are 2030's $30,000 EVs, and both will last longer than the 12 years modern ICE cars survive, attacking unit sales. What stays expensive? Driving time for rich people, parking for urban residents, insurance for drivers especially young ones. Interesting question: what becomes *more* scarce when Ws are ubiquitous?
Question via e-mail: "Any idea why the pricing still seems somewhat high in LA?"
I'm guessing because their utilization is lower in LA compared to SF. But really, it's up to Waymo to charge whatever they want. They seem to be pricing 10-20% or more than UberX/Lyft on average ime but there's a lot of variability and it all depends on how much Waymo wants to subsidize each trip. I think it makes sense to charge a premium compared to UberX for now though.
The 200+k weekly is ~1 / 22,000 of all US car rides (~4.3B/w). They were at 110k in October, so almost double in four+ months. If the doubling period is 6m., they'll be at 1/1000 rides in mid-2027. Uber and Lyft together are ~210M a week, or 1/20. Uber is shifting share to Waymo in Austin. Factors at play:
1. how quickly can they map new cities
2. how quickly can they add vehicles (and the capital to purchase them)
3. are any cities (perhaps because of state regulators) less suitable to Waymo than to U/L (NYC?)
4. what sub-contracting deal do they negotiate with Uber
5. are any cities more suitable to Waymo than to U/L
6. is Waymo's capital cost low enough to compensate for the loss of drivers' unwittingly subsidizing Uber by depreciating their personal cars (and in other ways)
7. ... ?
Can't tell if you're bullish or bearish on Waymo expanding their TAM to personal vehicle ownership but all of your points are valid and in my mind it's a two part act.
Act 1: Compete/partner/etc with ridehail since that's where you can get the highest utilization. I think this will be challenging and doable but the real question is how long it will take and how much money.
Act 2: Waymo costs get even lower than Uber (I'd say 2-3x cheaper) and then people consider replacing their cars (or even just one car in their household) with Waymo + other modes. Or maybe they buy a car with Waymo tech and use it for their own time or put it onto an 'Uber-like' network part of the time to make some money. The latter sounds good in theory but I'm not convinced it will work/be popular in real life.
Thanks for the thoughtful reply. These questions fall into "the more I learn, the less I know" bucket ;-). Here are some frames I am kicking around:
1. In the next 5 years, I assume they double repeatedly.
2. Because they can't compete with UL for marginal supply (capital cost borne by driver), partnering with U to be base supply makes sense. I expect U to try to capture all of the margin in the short term.
3. To my knowledge, which is surely much less than yours, they have yet to demonstrate a repeatable rollout to freeways. That's a huge risk to their TAM. I assume non-freeways are permanently solved—an incredible achievement. (Disclosure: I am socially acquainted with one of the core individuals responsible for this achievement.)
4. A lot depends on the interaction between how quickly they can scale capital, how physically and legally suitable they are for the next few dozen cities, what the market for riders and UL drivers in those cities are, and the extent to which they repeat the U partnership. I have no data here.
5. I also don't have a good estimate for W's cost learning curve, but I assume it is strong. If that's correct, I agree with what I take to be your position that we need reasons why W (or a competitive equivalent) won't take over the US automotive industry by 2040. On the one hand, there may be reasons! On the other hand, a, say, $10,000 HW package plus a substantial monthly fee is a great deal in exchange for sharply higher safety for self and loved ones, sharply lower insurance, and sharply less lost time behind the wheel—especially in the form of not having to chauffeur kids and other non-drivers. I won't pay $70,000 for a conventional car, but I'd pay that in a second for a car that could drive me between SF and LA. C.f. Matt Bell: https://www.mattbell.us/what-i-learned-from-130-hours-in-a-waymo/
6. On that lost point, my instinct about the "rent your AV" market is that you're missing the labor dynamic. Uber and AirBnB arbitrage income-poor people whose modest wealth is locked in physical capital (car/housing). Initial Waymos will be bought mostly by affluent people who have better things to do than manage a $8,000/y side-hustle.
7. Behind all this, cars are deflating incredibly fast. Today's $40,000 EVs are 2030's $30,000 EVs, and both will last longer than the 12 years modern ICE cars survive, attacking unit sales. What stays expensive? Driving time for rich people, parking for urban residents, insurance for drivers especially young ones. Interesting question: what becomes *more* scarce when Ws are ubiquitous?