As the race for autonomy heats up, data shows Google’s Waymo costs more than Uber and Lyft
It’s another nail in the millennial lifestyle subsidy coffin.
New data from ride-share comparison app Obi reported by TechCrunch puts data to what many riders in San Francisco already knew: Google’s driverless Waymo is more expensive than driver-having Lyft and Uber.
Waymo’s average price for comparable rides was $6 more than Lyft and $5 more than Uber (41% and 31% more, respectively), the report found. During peak hours, Waymo’s average price was about $11 more than Lyft and $9.50 more than Uber. People are apparently willing to pay for the novelty. Obi’s chief revenue officer told TechCrunch that the difference is people’s excitement about the technology and a “real preference to sometimes be in the car without a driver.”
Waymo, which currently operates in San Francisco (and Silicon Valley), LA, and Austin, is booking more than a quarter of a million paid rides per week. That, of course, is a lot more than Tesla, which says it doesn’t have any competition in the autonomous ride-hailing space but is slated to offer its first paid robotaxi ride in Austin this month. It’s also a lot less than Uber, which operates overwhelmingly with human drivers in markets around the world and does about 33 million trips a day, or about 230 million trips per week.
Waymo vehicles are equipped with numerous expensive sensors and can cost roughly $200,000, enough to buy five or six regular cars. As of May, there were just 1,500 Waymos operating in all its markets.
A recent estimate gives Waymo, which launched commercially in San Francisco just two years ago, a whopping 27% of the city’s ride-share market, but that data includes only rides that start and end in places Waymo operates, so in reality it’s lower.
Waymo does still seem to be a bit of a novelty, popular among tourists, and can be impractical. Geofenced Waymos there drive only within the San Francisco Peninsula, meaning it won’t take you to Oakland or the airport. They also avoid highways and other certain areas.
Everyday traffic incidents that are easy for humans to navigate can prove tricky to autonomous cars. An Uber driver I spoke with last week in San Francisco told me that the best time to take a Waymo is in the middle of the night, when no one else is driving.
Watchers of the industry may notice the Waymo pricing data is surprising given that one of the main selling points of driverless cars is that they diminish labor costs and, by extension, the cost of a ride.
Earlier in Uber and Lyft’s existence, customers could count on what was known as the “millennial lifestyle subsidy” to afford rides with them. Those companies, awash in venture capital, offered huge discounts to users in order to gain market share — a move that rendered them largely unprofitable but also decimated competitors like yellow taxis. But as the companies went public, and as Silicon Valley pivoted to an emphasis on profit in recent years, that discount has disappeared.
The true cost of a Waymo, for now, is more than that of an Uber or Lyft, both of which cost more than they used to.
The question is whether Waymo can get to scale without more subsidies — and if there’s room for more than one autonomous vehicle company in any market.
