29.11.2021
The taxi industry is in serious danger of extinction. It`s not a question of if, but when.
Driverless taxis offer various benefits, not just for consumers but for operators as well. Since they function without a driver, they can operate continuously, without having to pay attention to labour law limits, for instance. They also save money on expenses and wages. Undoubtedly, this will lead to an exodus of workers from the industry, as regular taxi drivers cannot continue to compete with steadily decreasing fares.
Autonomous taxis are a key technology that has long been on the rise. For years, the Alphabet subsidiary Waymo has been testing a driverless shuttle service in the USA and continues to expand it. In the meantime, Waymo's autonomous vehicles have covered more than 20 million kilometres and the company is so convinced of its technology that a commercial service is to be launched in New York - the taxi capital par excellence - in the next few months.
The first autonomous taxi service will also be available in Germany from 2022. A project hailed as the first of its kind is set to commence in Germany next year. Munich-based international mobility company, Sixt, will launch a fleet of self-driving robot taxis with the Israeli autonomous driving technology company, Mobileye. The Chinese manufacturer Nio will supply the basic vehicles, which will be fitted with cameras, radar and lidar by the Israeli company. Initially, there will be a safety driver on board who can take over the controls in an emergency. According to Mobileye, however, this will be dropped after a few months. However, this requires the permission of the authorities, and there is still no legal basis for this. According to the new federal government, however, this should be put in place quickly.
Despite Sixt’s robotic taxis being hailed as the first of their kind, competition is already brewing elsewhere in the federal republic. In Hamburg, VW wants to launch their own commercial taxi service, with ride-pooling instead of ride-hailing.
Waymo, VW and Mobileye are not the only companies with autonomous driving technology close to series production. The US start-ups Cruise, Argo, Pony, Aurora and also Uber have received enormous amounts of venture capital and finally want to see profits. In total, more than 50 billion US dollars have flowed into these companies. The reason for the euphoria of the financiers are the enormous profit margins that autonomous taxi services could generate.
In Germany, the average cost for the transport kilometer of a taxi is around 2-3 euros. However, using an autonomous shuttle only costs companies around 50 cents to break even. This already includes the purchase and operating costs as well as the support from remote monitoring, which is still done by humans. So autonomous shuttles can easily halve transport costs and make a lot of money in the process. When the cost of a short taxi ride barely exceeds that of public transport, customers are unlikely to wait. Especially in cities where local transport has been poorly developed and taxis have filled the transport gap. In addition, they are able to completely replace public transport in outlying areas or even make it unnecessary in the first place.
This is bad news for the taxi industry, since it will not be able to withstand the price war. The associations will continue to try to prevent the approval of autonomous shuttles, but the chances of success are questionable in view of the political changes in Germany. Nor can the traditional companies simply rely on autonomous shuttles themselves. To be able to use the vehicles safely, a huge backend consisting of hardware and software is needed. A small taxi company can hardly afford the costs.
Written by: Lorenzo Federici