MIT Paper Tackles The Challenging Economics Of Autonomous Taxis…

MIT Paper Tackles The Challenging Economics Of Autonomous Taxis – The Drive

A new paper from Ashley Nunes and Kristen D. Hernandez of MIT’s Center for Transportation and Logistics looks at San Francisco  and finds that “assuming current market conditions persist – HAV [Highly Automated Vehicle] technology struggles to achieve price parity with CDV [Conventional Driven Vehicle] ownership.”

What they found is that CDV total cost of ownership is a remarkably low 72 cents per mile, whereas the high licensing, insurance, cleaning and safety oversight costs associated with autonomous taxis combined with the low (52%) utilization rate of the current taxi fleet means robotaxis are likely to cost between $1.58 and $6.01 per mile.

Surprisingly, this economic challenge doesn’t come from the high capital cost of an autonomous vehicle which the authors model at $15,000, which they admit is “unrealistically low.” Instead, costs associated with taxi medallions ($250,000), insurance ($9.600 per year), and safety oversight by remote teleoperation employees ($211,662 per year) add the most significant costs. Due to this cost structure, economies of scale top out at around 10 autonomous taxis at a cost per mile that is still well above that of a CDV, leaving only two strategies open to robotaxi operators: shared ridership sufficient to boost utilization by some 30% over current taxi levels (a challenge, the authors note, given that “consumers show a strong aversion towards for-hire high occupancy travel”) or a 37% reduction in profits.

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