I remember when movies first started coming out on VHS and Beta (yes I'm that old). The video store that quickly popped up in my town quickly realized that renting a VHS player would help with sales and rentals; costing something like $10 a day (with 1 movie rental included). The problem was that they only had 10 players, so that if you didn't reserve one ahead of time, you were playing the lottery on high demand days. On weekdays there were plenty of players available, but on Fri/Sat nights it was crazy. The owner didn't have enough capitol to have players idle on the slow nights, so the problem wasn't resolved until everyone who could, bought their own player.
I see the same issue happening with any ride service model. Unless some part of it is being subsidized, I find it hard to see how a company will be able to have enough capacity for peak demand while not wasting a ton of capital. And if people have issues with getting a ride service, they'll buy their own, further complicating the profitability margins of ride service companies.
I don't understand how power, internet and retail companies deal with peak demand ! /s
You deal with peak demand by having a supply that is equal to the peak. Automatic Rideshare companies can self balance over a large area, watch the predictable trends that show up during a year and so on and will print money and thus have a lot of capital.
At which point, your costs = costs of owning a car for each commuting user in your area + overhead + profit. So unless you are offering subsidized prices, it will be cheaper for everyone to just own their own car for commuting.
Only if you assume everyone commutes to work at exactly the same time. Rush hour _is_ a thing, but even during rush hour you're no where near the point of having 100% of cars on the road at the same time.
You're also forgetting that most existing cars on the road have way more seating capacity than needed, since they need to account for the maximum number of people who will use that car at once. A family of four needs a car with four seats, even if most of the time that car will only be carrying one person to work and back throughout the week. Self driving cars will be much more efficient in that respect.
Over a city they definitely do. Such as rush hours. Move the cars to the residential hours in the morning, move the cars to the schools & commercial areas in the afternoon & evenings.
You can also vary your pricing. Planes and trains charge more at peak times when services are in the most demand. Uber has "surge pricing" when there are unusual demand spikes.
By offering discounted fares at off-peak times, and charging premium fares at the busiest times, you can smooth out the peaks while optimising profitability.
Easy, only companies with absurd amounts of cash will be able to compete, and won't mind burning through billions to dominate the market. The economics of Uber and Lyft don't work right now, but that isn't stopping them.
Google, Uber, GM, and whoever else will compete with one or two heavily funded startups, until one wins and the rest fail because of the dynamics you describe.
Rich people fighting each other to decide who will subsidize my transportation forever? Sounds good. It also sounds like something that won't happen, or at least won't last.
Only if they somehow create a barrier to entry that doesn't exist today.
It's not impossible, but if they go into corrupt regulation (how else could they do it?) there is no reason they can't get the same without the throwing a lot of money away first. So, again, they won't.
I think the barrier to entry is inherent in the "rich people..." part of your idea. Industries that have a huge financial requirement in order to lay down the technologies needed have historically been the WORST monopolies (at least in the US, we have examples in Oil, Railroads, telecoms, etc).
Also, you make it sound like corrupt, industry protecting regulation is the exception and not the norm. Where do you live, and does this fantasy place accept immigrants?
The big difference is that existing ride sharing and driverless ride sharing are compatible with each other. Ride sharing companies can slowly increase their number of driverless vehicles as it makes financial sense for them. Even if they only need them one or two days a week, there is still a balance that can be struck and that balance should increase over time as more people continue to utilize ride sharing services.
Even further a self-driving car can relocate itself to meet ad-hoc demand. This means privately owned vehicles (assuming they are self-driving) could be enlisted to service this additional demand.
Most vehicles sit idle in a parking lot but could be doing meaningful work.
(Queue SitCom script where someone tries to leave a party but forgot to turn off the feature and their car won't be back for 30 minutes...)
>I find it hard to see how a company will be able to have enough capacity for peak demand
I would guess that in most cities the capacity is not limited by capital to buy cars, but capacity of the street network, which cars, autonomous or not, are notoriously bad at utilizing.
I think this is what Uber/Lyft surge pricing does -- I've never been unable to find an Uber when I want one, but sometimes it costs more than I want to pay.
Many rides aren't so time sensitive that they can't be shifted to another time if the price is right (or wrong).
Car sharing companies will likely come up with a subscription service where you pay $X/month for your normal commute, then they can make sure they have enough base capacity for the regular rides and the on-demand rides can use demand pricing to ensure that everyone can get a car when they need it.
Let's replace peak time with commute. So that's one service you can cover. But there's no reason whatsoever self driving cars can't do cargo duty when less passengers are available.
Can't see a problem here, the car folds down its seats, the warehouse loads a de facto standard mini shipping container before the car arrives, throws it in the car, off it goes. It might even ascend to an ISO standard, not just a de facto one, such things happened before.
Perhaps, but now the standard shipping container slips a little bit, and gauges a scratch into my seats and sidewall on the first of 4 deliveries. I notice two days later when I'm next using the back. Who pays for the cost of re-upholstering my seats, and for my car-sharing costs during the repair?
My seats?? Noone owns a self driving car, you rent one when you need it. As for the fleet owner, I bet they will solve this in any number of ways somehow including the risk in the cargo fee
I predict plenty of people will own self-driving cars, at least at first. Habits don't die easily, and car ownership is seen as a key part of independence and self sufficiently in America. Some people will want to own them, whether or not it makes sense.
I see the same issue happening with any ride service model. Unless some part of it is being subsidized, I find it hard to see how a company will be able to have enough capacity for peak demand while not wasting a ton of capital. And if people have issues with getting a ride service, they'll buy their own, further complicating the profitability margins of ride service companies.