Robotaxis and Reality
- Emin Askerov
- Oct 2
- 1 min read
When Elon Musk announced #robotaxis some time ago, nothing to do with slowing #Tesla sales, of course, LinkedIn and social media erupted with predictions: everything will be self-driving, the taxi industry will collapse, and disruption is imminent!
Yawn.
My usual response to such hype is to grab popcorn and wait. Reality is always known to deliver a kick in the pants, just a little later, after everyone forgot about the viral posts. In this case, it took a relatively short time. The Economist just published a sober look at the economics of self-driving taxis, using San Francisco as the test case. Waymo has been running robotaxis there for years, joined more recently by Zoox and Tesla.
The reality is not quite the “end of taxi drivers” story. Who would’ve thought? Employment in the San-Francisco taxi sector has been stable, even growing. The total market expanded. Instead of replacing drivers, robotaxis seem to have increased overall demand for taxis, perhaps because more people prefer not to drive.
Two things stand out on robotaxis from the San-Francisco experience:
1. They are 20–40% more expensive than regular taxis.
2. They are much slower. Their ultra-cautious algorithms mean they take it safe and slow, and they often get bullied by human drivers for the right of the way, slowing them down even more.
So, the current robotaxi customer is someone who has a lot of money and time. Do you know many of those people?
Sure, costs will fall, and software will improve. But you still won’t be able to lean in and say: “Step on it!”
