The number one tech bro blind spot is the assumption that everything in the physical world scales with software and that every business and type of cost benefits greatly from economies of scale and the removal of human labor.
There are a great number of examples where that’s not true. Cookie store chains like Crumbl are a really good example. All the economies of scale stuff with them backfires. The product is too low price and too simple to make in batches, so the businesses with the best margins are ones that avoid traditional brick and mortar rent and don’t hire employees.
In the same way, an uber or taxi’s labor cost seems like it’s a huge scaling problem that needs to be resolved but really think about the costs involved with creating that scale to replace them.
Let’s not forget that at Waymo they still need a human to clean, fix, and charge/gas up, interact with customers and police, resolve driving edge cases, etc, all costs that a human driver essentially includes with their pay and does for “free.” Then you’ve got car storage and the capital expense of the vehicle that the uber driver heavily subsidizes and splits between business and personal use.
Basically, Waymo is looking to compete using their very complex and sophisticated solution in a market where its competitors are hiring lowest bidder temporary contractors.
There are a great number of examples where that’s not true. Cookie store chains like Crumbl are a really good example. All the economies of scale stuff with them backfires. The product is too low price and too simple to make in batches, so the businesses with the best margins are ones that avoid traditional brick and mortar rent and don’t hire employees.
In the same way, an uber or taxi’s labor cost seems like it’s a huge scaling problem that needs to be resolved but really think about the costs involved with creating that scale to replace them.
Let’s not forget that at Waymo they still need a human to clean, fix, and charge/gas up, interact with customers and police, resolve driving edge cases, etc, all costs that a human driver essentially includes with their pay and does for “free.” Then you’ve got car storage and the capital expense of the vehicle that the uber driver heavily subsidizes and splits between business and personal use.
Basically, Waymo is looking to compete using their very complex and sophisticated solution in a market where its competitors are hiring lowest bidder temporary contractors.