Robotaxis remain one of the most pursued applications for autonomous vehicle technology today, with many developers proposing an end to – or at least a significant reduction in – car ownership. Developers of autonomous vehicles, specifically those focused on level 4 self-driving vehicles, often focus on mobility services as the first application. Not only is there a demonstrated market for taxis and ride-hailing, but it’s a market where the high costs of labor create high prices – making it a ripe opportunity for autonomous vehicle deployment – and are a good technology fit as they can operate in geo-fenced areas. Our analysis of robotaxi economics assessed the costs associated with operating a robotaxi service, finding that maintenance costs and insurance costs are the biggest opportunities to reduce costs.
Ultimately, robotaxi costs will be low enough to displace conventional taxi and ride-hailing services operated by human drivers. However, the expected costs remain higher than most estimates of car ownership costs – especially operating costs for electric vehicles. Poor economics, in tandem with car ownership as a status symbol, make robotaxis unlikely to significantly displace conventional car ownership models.
Our report, “The Economics of Robotaxis“, analyzes the economics of fleet ownership of autonomous vehicles, finding costs to use these services will likely exceed personal car ownership but be cheaper than conventional taxi or ride-hailing services.
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