Autonomously driven taxis – generally referred to as a “robotaxis” – are nonexistent in midwestern and most east-coast cities, but they are a relatively common sight in San Francisco, Phoenix, Las Vegas and a few other test-bed locations. I actually rode in a Waymo robotaxi in early 2023 and wrote about it a couple of months later (Post 34). Those guinea pig cities have allowed the robotaxi companies to work out the details behind turning an interesting experiment into a viable business, and now the stage is set for expansion across the country and around the world.
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| Zoox Robotaxi Prototype |
There are wildly different visions for how that expansion will play out and for the impact robotaxis will eventually have on urban life and the form of our cities. Elon Musk, for example, has predicted that:
“By the middle of next year, we’ll have over a million Tesla cars on the road with full self-driving hardware, feature complete, at a reliability level that we would consider that no one needs to pay attention.”
And:
“From our standpoint, if you fast forward a year, maybe a year and three months, but definitely next year for sure, we’ll have over a million robotaxis on the road.”
That prediction took place in April of 2019 and Tesla has still not initiated any public robotaxi service although they are apparently close to doing a test service with 10 to 20 cars in Austin, Texas. In addition, the Tesla cars that ship now with autonomous driving hardware and software are not certified for driving without the driver being ready to take back control at any moment. Elon Musk, of course, has made so many outlandish predictions that never came true that he isn’t a very reliable guide to the future. [1] My goal with this post is to give you a factual assessment of where the robotaxi industry stands and what is likely to happen with its expansion over the next few years. In part two of this post I will look a little further out to try to predict the long-term impact of robotaxi technology on urban transportation and urban form.
The Players
The companies that are making the biggest waves in the robotaxi industry have shifted somewhat from my previous post. In particular, Cruise (General Motors) has apparently dropped out of the business entirely after a checkered experience with robotaxi service in San Francisco. In addition, several Chinese companies have become major players in this market, particularly overseas. I’m going to focus here on the U.S. market primarily, although I will mention other markets simply because what happens there will eventually affect the U.S. This is also not going to be an exhaustive list of companies with their fingers in the robotaxi pie. Instead, I want to emphasize the companies that I think are going to shape the future of robotaxi service and the ensuing impact on urban form.
Waymo (Alphabet). The clear leader in domestic robotaxi service is Waymo, and the company is starting pilot programs in Japan and France with an eye toward building a worldwide presence. While many competitors are still in the testing or limited service phase, Waymo has been providing paid service to the general public for several years in a variety of cities. The Waymo fleet of robotaxis has now exceeded 25 million miles of autonomous driving and currently provides well over a million paid rides per month. Operations are currently limited to San Francisco, Phoenix, Los Angeles and Austin, but Waymo has plans to expand to 10 additional cities over the next couple of years including Atlanta, Miami and Washington, DC.
Waymo adapts other production vehicles for robotaxi use rather than build its own custom robotaxi. The Jaguar I-Pace has been the vehicle of choice for the past few years, but the Hyundai Ioniq and a Chinese vehicle from Geely are apparently in contention for the next generation Waymo product. Each vehicle is fitted with numerous cameras, as well as Lidar and Radar sensors. In the near term, Waymo expects to expand their fleet from 1,500 vehicles to 3,500 vehicles, but the eventual goal is to produce “tens of thousands” of robotaxis each year from their conversion factory in Mesa, Arizona.
Uber. The ubiquitous ride-sharing company has abandoned plans to build its own robotaxis in favor of partnering with a variety of robotaxi producers in the U.S., Europe, Asia and the Middle East. Waymo’s expansion into Austin, for example, is being handled through Uber instead of Waymo’s own ride-hailing app. The Waymo/Uber partnership will expand to Atlanta later this year. Uber has the advantage of having the most widely used app and millions of daily customers which simplifies expansion plans for robotaxi producers.
Uber not only provides the internet platform, it will also handle fleet operations, including cleaning, maintenance and charging. This partnership approach makes so much sense that I expect Uber to expand its robotaxi operations as rapidly as possible. Uber CEO Dara Khosrowshahi has stated that the roughly 100 Waymo vehicles in Austin are busier than over 99% of Uber drivers in terms of trips completed per day.
Zoox (Amazon). The approach that has been taken by Amazon-owned Zoox focuses mainly on a purpose-built vehicle rather than on adapting traditional cars, although it initially tested its autonomous driving software using Toyota Highlanders. The all-electric, bi-directional, 4-passenger Zoox vehicle has no steering wheel or control pedals so it can’t be used for anything other than robotaxi service. However, it does have wide doors, comfortable seats, 4-wheel steering, and high-tech interior controls which make the riding experience as pleasant as possible.
Zoox has been doing intensive testing in Las Vegas, San Francisco and Foster City, California for several years and is reportedly near to providing public service. They recently signed a deal to be the “official robotaxi partner” for Resorts World in Las Vegas, although it is not entirely clear exactly what that means. In any case, Zoox has a unique product but needs to get real-world, paid-passenger experience if it is to keep up with the competition.
Tesla. The wildcard in the robotaxi world is Tesla which hasn’t actually provided any public service, but which has sold millions of cars, many of which included their “Full Self Driving” (FSD) software and hardware package. FSD is somewhat misleadingly named because it doesn’t actually provide fully autonomous driving – the human behind the wheel is still expected to take back control in certain situations. Robotaxi service is expected to start this month in Austin, Texas, although it is likely to be just 10 to 20 cars operating within a tightly limited area and closely monitored with remote “teleoperators.” Still, if the debut goes smoothly, Tesla hopes to be able to ramp up operations quickly and many analysts expect it to be a major player in the next few years. There are, unfortunately, question marks galore surrounding Tesla’s robotaxi capabilities because it has been so hard to separate the hype from the reality.
In my opinion, the odds of Tesla rapidly becoming a dominant robotaxi service are about equal to the odds that its service falls flat on its face. The more likely middle ground is that Tesla eventually masters the intricacies of providing robotaxi service, slowly gains traction in the robotaxi race, but ends up being just one of many providers. The idea that current Tesla owners will convert their cars to part-time robotaxis strikes me as complete fantasy, and the company is years behind Waymo and other providers in building the corporate capacity to run robotaxi operations in multiple cities.
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| Tesla Cybercab Prototype |
Tesla’s strength is their manufacturing capability and they have unveiled a slick, two-seat “Cybercab”product that is expected to enter production in 2026. The initial robotaxis in Austin will likely be adapted Model Y vehicles, however, and the actual timeline for Cybercabs to play a significant role in the robotaxi service is up in the air.
The Chinese. The U.S. has made it nearly impossible for Chinese companies to compete directly in this country’s robotaxi market for reasons that range from national security and data privacy concerns to global trade tensions. That translates to less publicity in the American press, but it does not mean that they are lagging behind American technology. Companies such as Baidu, Pony.ai and WeRide have already deployed thousands of driverless robotaxis in various cities in China and are actively expanding into the Middle East and Europe. In addition to car-like vehicles, Chinese companies are leaders in driverless trucks, buses, and specialty vehicles such as streetsweepers. Although their direct impact in the U.S. may be muted, their global aspirations means that Waymo, Tesla and Zoox may find it difficult to dominate the worldwide robotaxi market.
Safety
Advocates for autonomous driving technology have long predicted that computers linked with advanced sensors will eventually be much safer drivers than humans. As robotaxis move from test deployments to a full-fledged public transportation option, the question remains whether they have reached the “safer than a human” tipping point. Only Waymo has a large sample of real-world rides and a history of safety transparency at this point. Other companies either don’t have many vehicles in public use or are being very tight lipped about their safety record. Yet nearly everyone agrees that the public perception of safety is a key to robotaxi success.
A study was recently issued by insurance giant Swiss Re based on the 25 million miles of autonomous driving completed by the “Waymo Driver” and the resulting claims history for both property damage and bodily injuries. The study included Swiss Re’s data from over 500,000 claims and 200 billion miles of exposure. It found that compared with human drivers, the Waymo Driver had an 88% reduction in property damage claims and a 92% reduction in bodily injury claims. Over its 25 million miles of driving, Waymo had just 9 property damage claims and 2 bodily injury claims. For the same amount of driving, human drivers would be expected to have 78 property damage and 26 bodily injury claims. This pattern holds true even when compared with late model cars equipped with advanced driver assistance systems such as emergency braking, forward collision warning, or blind spot warning. [2 ]
These results are largely due to Waymo’s extreme focus on passenger safety. Their vehicles, for example, are typically equipped with 29 cameras, 6 Radar sensors and 5 Lidar sensors. In addition, prior to providing public service Waymo does extensive testing and mapping of new service areas, and route selection is biased away from confusing intersections or dangerous roadways.
In contrast, Tesla relies primarily on cameras for the FSD system and Elon Musk has derided sensors such as Lidar as a “crutch” and “stupid.” Although there are some recent indications that Tesla is now using Lidar for its FSD development and testing, their vehicles are still reliant primarily on cameras. Tesla is just now starting actual robotaxi operations, but their prior FSD systems in the cars they have sold have been linked to a variety of serious accidents, including fatalities.
Most other robotaxi companies are much closer to Waymo’s approach than to Tesla’s, although no one else has been as transparent with accident data as Waymo. Still, I think most companies realize that just a few high-profile accidents could put a serious crimp in their business plans, so safety seems to be a high priority for just about everyone.
Profitability
So far, no one is making any money as a robotaxi provider. Yes, there isn’t a driver to split the revenue with, but building and operating autonomous vehicles is expensive. The prices charged for robotaxi rides are typically competitive with or slightly cheaper than a typical Uber ride, but each ride is losing money. How much money is being lost is hard to say because no company is releasing that data, but the estimates are pretty high.
If robotaxis are losing money, why are so many big companies chasing this market? The answer is that the eventual market is expected to be enormous and the cost of providing service is expected to fall dramatically over time.
Currently, the cost of running a robotaxi business is substantial. There is the cost of the car with all its cameras and sensors, of course, which most analysts place at well over $100,000 per vehicle. And then there is the cost of all of the people that are needed for cleaning, recharging, maintenance and monitoring. Yes, the driver is gone but there is still a lot of labor involved, including “teleoperators” that monitor robotaxi operations. They don’t generally operate the vehicles remotely unless there is a major issue, but they do track robotaxi operations continuously. As autonomous driving software improves, the number of monitors will decline significantly but it will not go away any time soon because regulators will likely not allow it until the robotaxi safety record is not just “better than a human” but nearly spotless.
This ongoing need for teleoperations support despite 10 years of autonomous driving software development and testing underscores the difficulty in deploying truly autonomous operation in a complex urban environment. It is not just hard, it is really hard. [3] Is the ratio of active robotaxis to teleoperators 10 to 1? 20 to 1? No one is really saying and it probably varies from city to city and provider to provider. In fact, the teleoperations ratio is probably a significant negotiating point when providers are seeking approval to operate in a new city or state. In any case, it means that the dream of fully autonomous robotaxis is as much mirage as reality.
Plus, there is a lot of overhead involved with ride scheduling software and fleet maintenance, along with mundane stuff like marketing and insurance. Again, all of this will decline in terms of cost per ride as volume scales up – perhaps to half or even a third of what it is now. Robotaxi vehicles, for example, might end up costing $40,000 to $50,000 per unit. But robotaxis rides will never be mostly profit, because while the costs will drop over time, the cost curve will flatten out eventually and it won’t be anywhere near zero.
On the flip side of this equation, just how big is the potential market? Well, for starters Uber provides roughly 40 million rides per month in the U.S. alone, and Lyft probably accounts for another 10 to 15 million. Robotaxis won’t be able to steal all of those rides, of course, but I think taking 50 percent is a realistic target five years out in the cities with robust robotaxi operations. The real gold mine, however, is the roughly 20 billion trips Americans make every month in their cars. If just five percent of those trips were converted to robotaxis that would be a billion trips per month. Expand those numbers globally, and the potential market is staggering.
The Bottom Line
Very smart people are investing billions of dollars in the robotaxi race so I have little doubt that Waymo, Tesla, Zoox, et al will be spreading across the country. Advocates believe that robotaxi service will usher in an era of convenient, safe, and stress-free transportation that will improve both our cities and our lifestyles. The only questions seem to be when will they get to your city and will you be brave enough to trust them to get you from point A to point B?
Well, perhaps that’s not quite true. There are actually dozens of unanswered questions surrounding how the robotaxi revolution will play out and it is certainly not clear whether it will lead to urban nirvana or whether we will need to amend Dante’s Inferno to include a tenth circle of hell. I’m generally optimistic but that optimism is tempered by the knowledge that urban systems and human behaviors are inherently resistant to change. As always, reality is likely to fall somewhere between nirvana and hell. Check out part two of this series for my take on what is likely to work and what is likely to disappoint.
Notes:
1. Carlton Reid; “There’s a Very Simple Pattern to Elon Musk’s Broken Promises”; May 2025; Wired; https://www.wired.com/story/theres-a-very-simple-pattern-to-elon-musks-broken-promises/
2. “New Swiss Re Study: Waymo is safer than even the most advanced human-driven vehicles”; December 2024; Waypoint, Waymo blog; https://waymo.com/blog/2024/12/new-swiss-re-study-waymo#:~:text=It%20found%20that%20the%20Waymo%20Driver%20demonstrated,damage%20claims%20and%20two%20bodily%20injury%20claims.
3. “Fleet response: Lending a helpful hand to Waymo’s autonomously driven vehicles”; May 2024; Waypoint, Waymo blog; https://waymo.com/blog/2024/05/fleet-response#:~:text=Much%20like%20phone%2Da%2Dfriend%2C%20when%20the%20Waymo%20vehicle,for%20additional%20information%20to%20contextualize%20its%20environment.&text=Fleet%20response%20provides%20the%20Waymo%20Driver%20guidance,street%20and%20make%20way%20for%20the%20truck.
