Is this the Last Car I will ever Buy?

RAV4

I bought a 2018 Rav4 and it occurs to me that this will be last car I ever buy. OK, I am 76 so that may be inevitable, but I was thinking about ride hailing and self driving cars (AVs). Waymo (Google) has a fully autonomous ride hailing service running in Phoenix ( Waymo One). GM is planning on getting one going this year, maybe in San Francisco; Ford next year in Washington DC; New York, Chicago, etc, are all in their sights. Paris France may beat everyone to a fully car free city, with autonomous mini buses circulating on their narrow ancient streets.

Now all of these companies are concentrating on ride hailing, not selling cars to consumers. Because ride hailing makes them tons more money; and an all electric AV can go for hundreds of thousands of miles with little repair, maybe just upgrade to the self driving electronics.

So, how long will it take? There is so much money at stake and the investments are so huge, they will get these things out there as fast as they can. Imagine building 15 million AVs instead of consumer cars in the US. How many ride hailing vehicles do we need?

How many will we use? Taxis cost maybe $2.50 a mile. Could AVs bring that down to $.25 a mile? Quite plausibly. If you don’t have to buy a car every three years, with its maintenance and insurance, you will probably save $15,000 a year. That means an AV could take you 60,000 miles a year, break even. Even salesmen would break even at that rate. If most of us drive less than 20,000 miles, it is an enormous savings.

I know I will use them as soon as they become available in the DC area. Maybe next year.

What will I do with my Rav4? It’s already just sitting in my garage on most days. I guess it will be every day. Maybe someone will be dumb enough to buy it from me.

Some 268.8 million vehicles were registered in the USA in 2016. The figures include passenger cars, motorcycles, trucks, buses, and other vehicles. So, let’s say there are 275 million now in 2019.

The average person drives 13,476 miles a year. So let’s say 15,000 miles per year is average.

That should mean that we drive 15,000 times 275,000,000 miles or 4,125 billion miles per year. That compares roughly with the record 3.22 trillion miles on the nation’s roads in 2016, up 2.8 percent from 3.1 trillion miles in 2015. Perhaps a slight overestimate, so let us say 4 trillion miles driven in 2019.

So, if ridesharing autonomous vehicles (AV) did all that for us at 25 cents a mile, they would earn $1 trillion dollars.

If each AV rode 100K miles, we would need 4,000,000,000,000 /100,000 or 40 million AVs. We could build those in 2 or 3 years.

Each AV would earn $25,000 per year. So, it would break even in one or two years and then be pure everlasting profit. What a deal! No wonder the car manufacturers are rushing headlong into their development, and that development is almost done! No wonder GM and Ford are stopping production of sedans! Heck, they should just build a few million AVs and be done with it!

Of course, these numbers could all be tweaked in a million ways, but anyway you twist it AV ridehailing is a monster business, even if it unemploys millions. To make it really work those millions will have to be given the money to use ridehailing: voila UBI.

One of the first benefits of automation will be self driving AVs. It’s hard to know all their effects, but they will clearly become a public utility, making trillions of dollars for someone. Rather than Waymo, GM, and Ford, etc., raking in trillions, why not an “Automation Dividend” for everyone? Public ride hailing regulatory commissions should be forming everywhere. Instead of 4 million unemployed, we should be thinking of millions of people free to follow their highest pursuits.

Imagine if instead of 300 million private vehicles we needed only 30 million AVs. Imagine all the free space in cities created by them (and reduced pollution since they will all be EVs too!). In the beginning there will be the usual traffic crush at rush hour, but as more people become unemployed (for instance, hardly any car manufacturing once the 30 million are built, and they can be all built in a couple of years!) the rush hour will change to a distributed set of ride hailing that evens out throughout the 24 hours.

Joe is a bricoleur, trying to understand the complexity of the place of values in a world of facts, using only common sense.