Beware the Credit Crash!

antrobus

GreatApe wrote: »

Then they were stupid. Its not an example of software being capital intensive its an example of stupid being capital intensive.

The capital cost of self drive software over 10 billion humans and 100 years will be nothing
Even if it cost a trillion dollars to write and build said software it would be worthwhile. Of course it's likely not even to cost one tenth of that

Microsoft spends about $12 billion a year on R&D.

Developing software that works is also pretty 'capital intensive'. And you can always justify the spend by depreciating it over x number of years and y number of people. But that's not economics, it's marketing.

GreatApe

antrobus wrote: »

Microsoft spends about $12 billion a year on R&D.

Developing software that works is also pretty 'capital intensive'. And you can always justify the spend by depreciating it over x number of years and y number of people. But that's not economics, it's marketing.

You have to consider the scale of the market. $10 billion is a lot of money but $10 billion to develop a piece of software that will impact 10 billion peoples lives every day massively is nothing.

westernpromise

GreatApe wrote: »

Yes I suspect in socialist countries it will be far too tempting to not tax EVs on a per mile basis. Something like 10p a mile will raise a lot of tax. It will be a huge negative economically as they will be taxing productivity but they will do it.

If cars could run on water, water would cost the same as petrol. The market will stand it so that's how the tax would be determined.

The thing is, the arguments for self driving cars are not the same arguments as those for using taxis instead of owning a car. The latter already makes economic sense, but almost nobody does it outside a big city because you're at the mercy of cabs. The further economies you cite rely on 9 people all wanting to go the same route at the same time. The advantages of self driving cars are that they're safer so some people will buy one for that reason.

I imagine there'll be some of these but I see nothing revolutionary here. There was a lot of hype about the Segway 15 years ago and look at what happened to those.

antrobus

GreatApe wrote: »

You have to consider the scale of the market. $10 billion is a lot of money but $10 billion to develop a piece of software that will impact 10 billion peoples lives every day massively is nothing.

But $10 billion is still pretty 'capital intensive', isn't it?

P.S. The world population is 7.5 billion, not 10 billion.:)

antrobus

westernpromise wrote: »

..The thing is, the arguments for self driving cars are not the same arguments as those for using taxis instead of owning a car. ...

The difference would be that the same self driving car will be available to either own or rent. So faffing around with speculation about the running costs or battery life of these EVs isn't really all that relevant because the same will apply in both cases.

westernpromise wrote: »

...The latter already makes economic sense, but almost nobody does it outside a big city because you're at the mercy of cabs....

Clearly there is a demand for taxis. It might be that robot taxis will be cheaper and so the market will grow. But I suspect it would take a bit more than simply buying a robocar and putting it on Uber. For one thing, you will need to have a mechanism for establishing whether or not that last drunk as a skunk passenger has just spewed out all over the back seat, and that said car needs to return to base for a deep clean.

westernpromise wrote: »

..The further economies you cite rely on 9 people all wanting to go the same route at the same time....

I recall there was once a poster named Cells(?) who made similar claims about self driving cars. He didn't understand peak demand either.

westernpromise wrote: »

...The advantages of self driving cars are that they're safer so some people will buy one for that reason...

There are lots of reasons why people might buy one. Presumably you could go out, get smashed, and still drive home in one. The elderly, disabled, etc and so forth. Indeed, the emergence of robocars might cause some people to buy one and stop using taxis.

There are also reasons why people won't buy one. Some people like driving.

westernpromise wrote: »

..I imagine there'll be some of these but I see nothing revolutionary here. There was a lot of hype about the Segway 15 years ago and look at what happened to those.

Or the Sinclair C5.:)

I'd say that robocars were potentially revolutionary. In the medium to long term. When they are available.

But one thing I am certain of; they will have no impact on the current book of PCP deals for the simple reason that there are no robocars, and won't be for a number of years.

kabayiri

PCP deals are popular because the list price of even a modern new car is too high, given that there are lots of other competing demands on the disposable money people have.

If you are young, then insurance is a big cost component.

GreatApe

antrobus wrote: »

But $10 billion is still pretty 'capital intensive', isn't it?

How can you conclude that without taking into account scale.

$/person or $/unit of energy or $/m2 of building is what counts not the nominal cost with no consideration of the output

Self drive software (ie one that works fully better than humans off cameras) is worth in excess of $1 trillion

GreatApe

westernpromise wrote: »

The thing is, the arguments for self driving cars are not the same arguments as those for using taxis instead of owning a car. The latter already makes economic sense, but almost nobody does it outside a big city because you're at the mercy of cabs. The further economies you cite rely on 9 people all wanting to go the same route at the same time. The advantages of self driving cars are that they're safer so some people will buy one for that reason.

I imagine there'll be some of these but I see nothing revolutionary here. There was a lot of hype about the Segway 15 years ago and look at what happened to those.

If the cost is lower and the convenience better then why would people not switch to using robo taxi fleets?

Already moving things about is the first or second largest employer (after healthcare) and all those jobs will go. Employing people at £15ph cost will be replaced by software at <£1ph cost.

Services like uber will go from £6 a trip to £3 a trip and with that decrease in price they will greatly expand. Already uber has seen a boom in taxi use and that was by knocking a taxi ride down from £8 to £6 and the benefit of shorter wait times. the fall from £6 to £3 and even shorter wait times will see a lot more taxi use (>20x imo)

The only argument is at what price point would robo taxi fleets take dominant market share. Im sure you agree if the price was £0 then they would take 100% market share. If the price is £1 per mile they will take negligible market share. So the question is at what price would they take 50% market share and I think that is in the 40p/mile range so will robo taxi fleets get to such price points or lower. I think so

GreatApe

antrobus wrote: »

The difference would be that the same self driving car will be available to either own or rent. So faffing around with speculation about the running costs or battery life of these EVs isn't really all that relevant because the same will apply in both cases.

That is not true, today a typical car is used for 7,900 miles annually and runs for about 10-15 years to total ~100k miles in its life. Compared to a typical taxi that may run for 400,000 miles over about 5 years there are even a few diesel taxis that have hit 1 million miles over 15 years with the same engine. Clearly the cost of running a taxi for 400,000 miles over 5 years is much less per mile than running a private car for 100,000 miles over 12 years. The cost per mile is 1/4th as much already today just by how the vehicle is used. Also the capital cost (interest on loan or interest forgone in savings) of the taxi is lower as the capital is tied up for only 5 years rather than 12 years.

So there is no doubt that taxis, petrol diesel eletric human or robot have lower per mile costs over their lifetime than do low mileage private human cars.

Self drive tech is revolutionary even without EVs its the software not the power train. Although with higher milage vehicles EVs become more viable which is why I think its likely to be robo EV cars but it works with oil cars too.

Clearly there is a demand for taxis. It might be that robot taxis will be cheaper and so the market will grow. But I suspect it would take a bit more than simply buying a robocar and putting it on Uber. For one thing, you will need to have a mechanism for establishing whether or not that last drunk as a skunk passenger has just spewed out all over the back seat, and that said car needs to return to base for a deep clean.

There is no doubt about it being cheaper the largest cost in taxis is the £250,000 a human computer wants to be paid to drive the taxi for 500,000 miles. By comparision the fuel cost is closer to £50,000 using highly taxed uk diesel. So if uber could invent a car that worked with zero cost fuel or uber could invent a self drive car then they would pick the self drive car by a long shot.

With lower prices the market will expand tremendously. Uber only really knocked taxi prices from about £8 to £6 and the market expanded. Knocking it down from £6 to £4 will see a bigger expansion and from £4 to £2 will see them take majority land travil market

I recall there was once a poster named Cells(?) who made similar claims about self driving cars. He didn't understand peak demand either.

I understand it perfectly well what you do not understand is that during peak demand 100% of cars are not on the road. It probably is not even 20% of cars on the road at the same time during the 8am-9am rush hour. If the figure is 20% that means you could probably cut down the uk fleet from 32 million to less than one third that figure so about 10 million robo cars or fewer.

Already uber has cur down some cars we have gone from 2 cars to 1 car + uber as a top up. I can quite easily see the uk go from 32 million human cars to 20 million human cars plus about 1 million low cost robo taxis

There are lots of reasons why people might buy one. Presumably you could go out, get smashed, and still drive home in one. The elderly, disabled, etc and so forth. Indeed, the emergence of robocars might cause some people to buy one and stop using taxis.

Private ownership wont end. In fact I think what is most likely is the tesla idea. Where people buy a level 5 robo car for themselves and use it when they want but they can with a smartphone app choose to have it go and work as a taxi for them. That way the owner can charge it up when it returns at night and tend to any needs.

They would have full ownership so can use it personally whenever they want but the other 95% of the time instead of sitting on the drive it can go out and earn some income for the owner.

But one thing I am certain of; they will have no impact on the current book of PCP deals for the simple reason that there are no robocars, and won't be for a number of years.

It is just software once the software is cracked the only cost is putting in a couple of smartphones worth of tech into cars. So the millions of cars a year ford builds they just need to add a couple of smartphone to each car. Its not like huge factories need to be built out. If the software arrives in 2020 by 2025 we could see virtually all new cars come with the ability to self drive.

westernpromise

The point I am making is that although it is already cheaper to ditch your car in favour of reliance on taxis, almost nobody does. It doesn't matter if the taxi is free if it does not turn up and if you thus have no control over your own journey.

Incrementally most transport more or less is free. Once you've paid for your annual season ticket, the bus and Tube are free (which is why I'll never buy a bike to save money - I'll still need a Tube season ticket so the bike will cost money, not save it). But if I absolutely have to go somewhere, and go there now, I will use my car even though incrementally it is not free (petrol plus parking) to do so. I won't hang about waiting for a bus to turn up, and nor would I wait for a driverless taxi, even if free.

There will probably be times of the day when they are free, but these will be at 6am on Sunday, like Tesco delivery slots.