The Big Payoff

The big payoff for driverless vehicles is with driverless trucks, not driverless cars, especially driverless "Ubers". By driverless trucks, I specifically mean long-haul trucks.

 

A typical long-haul trucker drives 10 hours a day, meaning the truck is idle the other 14. Some downtime is needed for refueling, weigh stations, etc., but it is reasonable that driverless long-haul trucks will double the productivity of human driven trucks, quite literally overnight.

There has been a shortage of people willing to work as long haul truckers, even given it pays a middle-class income without the need for excessive education or training. This has caused labor costs to rise.

There are currently over 1.5 million long-haul truckers and estimates are the need for long-haul truckers will approach 2 million in the next 5 years.

There are about 250,000 taxi and limo drivers, and they make less than long-haul truckers. Uber and Lyft have exposed there is much greater demand for car services than originally expected, and the capital-less model of ride-shares works well for that demand. The flood of ride-shares has depressed wages for both taxis and ride-shares. But more importantly, self-driving Ubers will be a capital intensive model and will have all the flexibility of a taxi, and none of the flexibility of a ride-sharing service.

The long-haul truck driver replacement market is a $100 billion addressable market, about 10 times that of the taxi driver replacement market.

Follow the money.