Open questions about driverless ride hailing economics: 1. What will be the cost reduction (over Uber/Lyft) of removing the driver? 2. How much does that cost reduction increase demand? 3. Would the UX change significantly affect demand? 4. Would we see a large increase in geographic availability (no need for drivers = can put more taxis on the road)? For 1: the labor cost of a Lyft/Uber ride after accounting for everything else is only 20-40% of the price, which caps the reduction at -40% in the best case scenario. However a driverless taxi network would have significantly higher fixed costs (AI engineers, datacenters) and non-zero added unit costs (frequent interior cleaning, self-driving hardware amortization), so realistically we're looking at more like -15-20%. So it is doubtless that autonomous rides, at scale, will be cheaper than current ride hailing services. But the effect size will be much smaller than most people expect. They will still be fairly expensive. For 2: probably not that much -- because of dynamic pricing, prices already fluctuate by more than this, and a few years ago Uber was heavily subsidizing demand, so we have some data as to what would happen with 20% cheaper rides. The TAM in areas already well-served by Uber/Lyft might grow ~20% in miles terms, while staying constant in dollar terms. For 3: we already know (via Waymo deployments) that people prefer not having a driver in the car, and price-insensitive customers are willing to pay more for that experience. It's not all positive though: there have been concerns about car cleanliness (easily addressable, but that increases unit costs). Overall I don't think the UX change will increase TAM much, as for most people price and availability will be the critical factors. For 4: this is one is more of a wildcard. Most of the costs of an autonomous network are fixed costs; incremental unit costs are mainly car cost amortization (a rounding error) and cleaning. This means that an autonomous network has the potential to have much higher coverage than the current Uber/Lyft network. But it certainly won't be the case that these networks will extend *anywhere*, at least not with a short wait time. I think we will see some TAM increase from this effect, perhaps +20-30%. Overall: we should expect an incremental TAM increase in dollar terms, but overall the market will be more like Uber++ than a new transportation paradigm. Most people in the US, especially outside of dense areas, will still drive their own car.