The California PUC has issued a permit to Cruise (funded by GM and Honda) to provide robotaxi service in California without a security driver in the vehicle. Cruise tests San Francisco and touts the importance of thriving in that toughest non-suburban environment. Waymo has yet to apply for a free permit, but reports suggest that both Waymo and Cruise have started the process to offer paid trips. Waymo operates a paid and unsecured driver service in Chandler Arizona and has done so for some time. He didn’t bother to apply for a free permit for California, but he has been ramping up operations there, suggesting that he hopes to do so soon.
It’s not that surprising that Waymo didn’t bother with a free permit, considering the limitations of the cruise permit, which also prohibits return trips, airport trips, or carpooling. Cruise, on the other hand, has yet to take public taxi service (with safety driver) and only did a brief demonstration of a test ride with a safety driver in the passenger seat, late at night in a quiet part of the city.
Testing with passengers is an important step and you will learn things like:
- How people react to vehicles and what they do in vehicles.
- User experience of orders, management and (eventually) billing.
- How to provide customer service from remote operators.
- Deal with and learn about strange requests from clients like changing your mind, breaking rules and many other things.
- The pick-up and drop-off challenge, which is also quite different in suburban shopping malls and on urban sidewalks.
- If you can charge, how people react to fees, and what fee structures work best.
Some of these things companies like Uber
Cruise has said that their actual plan is their shared “Origin” vehicle, but they cannot test the shared ride. San Francisco is finally gearing up to get far enough beyond Covid to bring rideshare back, and it’s a shame to delay more experiments in that area as well.
Waymo has only done modest fee experimentation so far. His rates at Chandler are a modest discount from Uber’s rates. It is not clear that this affects the number of people using the service there. Riding an Uber is much more common in San Francisco than in Chandler. Waymo recently added the ability to take a multi-leg trip (including return trips of course) by pausing your trip, without having to pay the “flag drop” fee for additional legs, just adding more miles.
Typical taxi fares will include a basic “flag drop” fee (a reference to the flags on the meters) plus a fee per mile and sometimes a fee per idle minute for being pulled over. There may also be a minimum fare, which in Uber’s case is typically around $ 7, making short rides uneconomical. The falling of the flag pays for several things, including the times drivers sat or crossed waiting for passengers, and the distance traveled to pick up a passenger. Robotaxis allow you to experiment with this. There is no human being paid to “wait,” just the lowest cost of keeping an idle vehicle. The costs will be largely per mile, but you have to pay something for the trip to pick up a customer on the last delivery and any predictive repositioning to streamline pickups.
Much of the interesting experimentation that can be done with robotaxis goes well beyond this. Customers may prefer flat rates or monthly subscription rates to costs per mile. Uber and Lyft have toyed with subscription services. Regular ownership of a car is not considered a cost per mile; For many homeowners, it involves a monthly rental and insurance payment, maintenance payments 1-2 times a year, and weekly visits to a station for the gas tank (or monthly electric bills.) In addition to parking and garage, of course, something taxi riders don’t care about. The taxi payment style is foreign to the owner of the vehicle.
Waymo still has more to learn about driving in San Francisco, as does Cruise. They both have to learn about crowded sidewalks at rush hour. But many of the interesting learnings involve payment. It is not entirely clear why the California PUC wants to prohibit charging and how they are fulfilling their role of protecting the public by doing so. Both services will start small, so they will not (yet) affect public attraction markets, although their long-term goal is to overcome them. Hopefully they will rush to reverse this policy.