SPEWING MONEY
Companies supporting robo-taxis don’t take into account clean-up costs of messy passengers,
NEW YORK— It didn’t take long for Pritam Singh to learn a key lesson about working for Lyft. People are disgusting. They have a nasty habit of throwing up in moving vehicles.
Ride-share drivers are acutely aware that customers tend to do that, along with slightly less annoying things like wiping hamburger-greasy fingers on armrests and turning floor mats into swamps of slush.
Singh, who ferries passengers for Lyft Inc. in Manhattan several evenings a week, drops about $200 (U.S.) a month cleaning — really, sometimes it feels like sanitizing — his Toyota Camry.
For General Motors Co., Uber Technologies Inc. and others mulling a foray into robo-taxis, the bill could be in the tens of millions of dollars annually. When you add things such as insurance, inventory storage and the steadily shrinking value of beat-up cars? Billions.
That casts a pall on the idea, held dear by the likes of Uber co-founder Travis Kalanick, that the advent of self-driving will swiftly make ridesharing so cheap that most Americans won’t bother to own their own vehicles.
How to deal with vomit represents one of many great unanswered questions about the mythic business model that Kalanick once summed up as, basically, getting rid of “the other dude in the car.”
In the future he and Lyft co-founder John Zimmer have described, apps and bots do the work, consumers save big and investors just rake it in. But number-crunchers at GM and companies including Apple Inc. and Alphabet Inc.’s Waymo are adding up a lot of costs that will get in the way of robo-taxis being cash cows.
Apple and Waymo have turned to Avis Budget Group Inc. and Hertz Global Holdings Inc. for help in managing driverless fleets. Even big rental companies, though, have struggled to contain their own costs in taking care of cars and trucks used by the great unwashed public.
“It is a really big issue and no one has figured it out,” said Mark Wakefield, co-head of the global automotive practice at the consulting firm AlixPartners. “No one is even betting on the outcome.”
That’s not to say the no-driver prize won’t eventually be worth a lot, which is why so many are jockeying for position, and doing their homework. GM’s Maven unit, which competes with Avis’s Zipcar in the hourly rental business and leases vehicles to Uber and Lyft drivers, has studied how much abuse the vehicles take.
In addition to the damage inflicted and filth deposited by customers, the costs for insurance and parking — pricey in cities such as New York and San Francisco, where ride hailing is popular — will be substantial, said Peter Kosak, GM’s executive director of urban mobility.
Ready or not, robo-taxis are being prepared for the roads. GM CEO Mary Barra said last month that the automaker is expanding its fleet of self-driving, all-electric Chevrolet Bolts from 50 to180. Lyft plans to test the Bolt as a robo-taxi in San Francisco, with a human babysitting the steering wheel. GM will also run trials in Detroit and Scottsdale, Ariz.
The robo-taxi, without any human to compensate for navigating traffic, might indeed be a gold mine. Its arrival could be one of those big economy-altering events, freeing up acres of parking space in cities, eliminating the need for garages in homes and handing people thousands of dollars a year in new disposable income.
AlixPartners’ Wakefield said it could fundamentally change how people view and buy transportation.
Lyft’s Zimmer recently described a personal vehicle as “a ball and chain that gets dragged through our daily life” and predicted that by 2025, private car ownership will “all but end” in major U.S. cities.
Ride-share drivers can offer the future robo-taxi industry all kinds of advice. Stay off the roads after the bars close. Refuse to pick up anyone carrying a sack from a fast-food joint.
And Singh advises stashing barf bags in plain sight.