The Current State of the Robotaxi Industry — An Interview with Dr. Ashley Nunes

Dr. Ashley Nunes is a research fellow at Harvard Law School. His work explores how innovation affects markets. This article is based on my interview with Dr. Ashley Nunes.

Waymo, a frontrunner in the self-driving car industry, has been operating fully autonomous rides without a safety driver in a town outside of Phoenix for almost two years now. Residents of Chandler, Arizona, have been able to hail “robo-taxis” with the Waymo One app, to take them anywhere within an 80 to 100 square mile area.

Cruise, another big name in industry, has recently been given the green light to begin charging passengers for driverless rides in San Francisco. The Californian state government has been relatively hesitant on allowing autonomous vehicles to roam the streets of its big cities. However, in June of this year, the California Public Utilities Commission unanimously granted Cruise, a subsidiary of General Motors, approval to launch its driverless ride-hailing service.

When asked whether or not autonomous vehicles are up to par with the expectations and promises made many years ago, Dr. Nunes said that, although autonomous vehicle projects, such as the one in Chandler or San Francisco, have grown large enough to receive government attention and regulation, the real question lies in whether or not the firms are profitable. In terms of profitability, Dr. Nunes believes that autonomous vehicle developments are nowhere close to where they need to be.

Waymo has been very tightlipped on whether or not the cost of a Waymo One ride covers their capital costs. What they have said is that their pricing is generally on par with the pricing of an Uber ride. As Uber’s pricing model is notoriously known to be unprofitable, it makes it clear that Waymo One is likely loss-making as well.

The newer, San Francisco based, autonomous taxi project by Cruise, is no different. Its parent company, GM, said in July that it lost $500 million on Cruise during the second quarter of 2022 as it began charging for rides in a limited area of San Francisco in early June. The losses amount to more than $5 million a day.

Additionally to the inadequate introduction of cost-efficient driving to the global stage. Autonomous taxi projects have failed to deliver on their promises of climate-change fighting technology as well.

In terms of climate friendliness, autonomous vehicle developers have always made it clear that their developments will contribute to the much needed decrease of vehicle based emissions. However, a collaborative Harvard & MIT study led by Dr. Nunes has shown otherwise. To cater to a certain number of consumers, companies like Waymo need to have a certain number of cars on the road. This is an inefficiency that has long existed in the taxi industry. There are certain times in which everyone wants a taxi and certain times in which no one wants a taxi. In an attempt to solve this problem, taxis tend to drive around a certain area with no passengers. This is where the environmental inefficiency comes to fruition.

A potential solution to that problem could be to simply park the vehicle instead of having it drive around the area. However, in this scenario, the emissions associated with the construction of the autonomous vehicle become spread out over fewer miles, which as a result raises the net emissions of the vehicle.

Despite all this, Dr. Nunes believes that with the introduction of the right policies, robocabs could be one additional tool in the fight for a sustainable future.