Robotaxis are the new millennial lifestyle subsidyRobotaxis are the new millennial lifestyle subsidy

The so-called millennial lifestyle subsidy — an era when (then) young people enjoyed cheap products and services thanks to deep-pocketed venture capitalists — came to a close at the start of the decade. Tech-adjacent services like Uber and Lyft, once priced below their true cost, became noticeably more expensive as the companies graduated from chasing customers to chasing profits.

Now, a different version of that subsidy may be emerging — and once again, it revolves around ride-hailing: robotaxis. Autonomous taxi services are popping up in cities across the country. 

• The situation is most advanced in the Bay Area, where customers can currently choose between Google-owned Waymo, Tesla’s Robotaxi, and Amazon’s Zoox to get to where they’re going.
• And the prices for these services can seem surprisingly cheap. On a recent trip to the Bay Area, Tesla Robotaxi rides were consistently cheaper than comparable trips on Uber. 
• Waymos were moderately more expensive, but not notably so when you consider the $75,000 Jaguar I-PACE you’re riding that’s toting around another $120,000 worth of added lidar and other gear. 
• For now, Zoox is free.

Data from Morgan Stanley Research shows that the cost per mile**** for Waymo and Tesla Robotaxis is already cheaper than traditional ride-hailing costs. For example, Morgan Stanley Research estimates that Waymos cost about $1.36 per mile to operate versus $0.74 for Tesla, when factoring in depreciation, cleaning, maintenance, charging, mobile operators, insurance, and parking. Meanwhile, new pricing data shared with Sherwood News from ride-share comparison app Obi shows that Waymo is charging about $9.58 per mile while Tesla is charging $4.35. So it seems the companies are charging a premium over their costs.

The Takeaway

While the cost of AVs is expected to keep going down, current prices are probably lower than they should be. “From a consumer point of view, it’s definitely the golden era of AV rides, very similar to like 10 years ago with Uber and Lyft,” Harry Campbell, founder of**** The Driverless Digest, told Sherwood. “We don’t know what the true cost is, but you’re definitely getting a great deal on these rides.”

“I kind of joke with my friends and say, ‘Take these rides while you can.’”

(Millennial editor’s note: A “millennial lifestyle subsidy” can really be claimed by anyone of any generational cohort. “Millennial” is more a loss-leading state of mind at this point.)