Robot Taxis Are Real

Waymos are driving all over the west side of Los Angeles. What changes are coming in how the world works?

Waymos don’t yet go on the freeway and they don’t go to LAX

A friend of mine who lives in Santa Monica made a bet in 2000 with a friend that on December 31, 2025, he could call a robot taxi to pick them up and take them and their wives out to dinner, with the loser paying.

It’s one of the great bets for the amount of discussion it has drawn over the last quarter of a century from third parties like myself.

Autonomous cars will likely have a huge but somewhat hard to foresee impact on society (although lately people have been thinking more about the impact of artificial intelligence).

In the mid-2010s, my friend (who knows a huge amount about technology) was optimistic he’d win his bet on robot taxis, but just two years ago he was pessimistic.

Now, it looks likely again.

I drive around the westside of Los Angeles a fair amount lately. Late at night these days, a few percent of the cars on the road are driverless Waymo robot taxis. Last night, three of the half dozen cars stopped at a red light were driverless.

There are only about 300 robot taxis in operation in Los Angeles at present, but I think they are each driving around most of the day and night.

Interestingly, over half of the time they have no passengers in them either. Although Waymo denies this, my guess is that driving around empty is in part for advertising. It induces confidence to see them driving around calmly. (On the other hand, a Waymo almost took my wife’s door off on a narrow side street it was zipping down while she was getting out of the car.)

The “deadhead” driving is for data collection as well.

Also, I suspect Google is having them drive around so they aren’t parking as much in front of people’s houses. West L.A. is NIMBY Central, so I can imagine homeowners feeling creeped out and annoyed if empty cars start pulling up in front of their house. Perhaps once Google wins widespread political approval, they’ll stop wasting electricity as much.

Waymo, a subsidiary of Google’s parent Alphabet, is using electric Jaguar I-PACE SUVs that start at around $70,000, and then adding close to $100,000 of more gear, including LiDAR radar. They can bring in about $100,000 per year in gross revenue each.

So, Waymos aren’t making money yet. But Alphabet’s pockets are very deep.

Hence, the New Year’s Eve 2025 bet still isn’t a slam dunk because Waymo could decide to stop subsidizing their loss leader operation in Southern California before the end of the year.

What do you think? Are driverless cars going to happen in a big way over the next ten years? What will be the impact on things like real estate values?