Comment by robocat
4 days ago
If aggressive driving is 5% faster, then your expensive investment (the cars and the business) might get a few percent better utilisation (assuming liabilities don't increase much). More likely to see aggressive driving on way to pickup?
Capital costs matter, and how quickly you get ROI matters.
5% higher velocity doesn't mean arriving at your destination 5% sooner. A car traveling 52.5mph will complete a trip (absent acceleration/deceleration/stops) of 3 miles only about 10 seconds faster than a car traveling 50mph. That's the upper bound, because cars have to stop. The speed is not the efficiency bottleneck, not by a long shot.
Even if you saved thirty seconds on each ride throughout a day, that doesn't translate to more profit. It translates to the ability to take on extra rides. Which in total, is maybe one or two. You're talking about an extra $30 or so in revenue. Subtract off normal overhead and you're looking at maybe ten dollars of extra profit per vehicle per day at best.
You're also assuming the service runs at capacity at all times. You will infrequently be at capacity. Arriving ten seconds sooner doesn't matter if you just have another car you can dispatch for another rider, and optimizing how and when to bring cars in and out of service becomes the bottleneck.
There are so many inefficient aspects of a naively designed ride sharing service that can be optimized for real meaningful profit. And almost all of those things can be done without changing the way the car handles in any way. Just making sure you have vehicles in the right places at the right times, or fueling vehicles at more opportune times, or choosing more optimal pickup and drop-off locations could increase the number of rides you can perform, which is what translates into profit.
Because of how many miles taxis drive their depreciation as a physical asset that wears out costs more than the interest on the money invested in them. To the extent that driving aggressively generates more wear or introduces more accidents it will likely end up costing more money.
Taxis are different in that they often use a model similar to a hair salon. The driver is renting the car. There is no incentive to take care of it… it’s a prisoners dilemma situation.
With the Uber, the driver is responsible for the car, and the smart drivers get it that wear and tear is bad. Of course, many uber drivers are idiots who don’t math well, and are basically burning equity at a loss.
Taxis charge time + distance, not flat fares. Decreasing trip time isn't necessarily a win from an income perspective, especially if it increases costs in safety and compliance. The real balancing force is customer frustration. Long trips are one of the primary complaints in robotaxi services.