The Rideshare Revolution

I don’t think I took more than four taxi rides in my entire childhood. While part of the reason is that my parents were cheap, taxi rides really were crazy expensive. In 1990, I sweat bullets watching the taxi meter for a thirty-minute ride from SFO rise to about $60. Inflation-adjusted, that’s $155! That was six weeks of pay for my part-time job.

My kids, in contrast, have taken rideshares hundreds of times. Which got me thinking: How typical is my experience? So I went to ChatGPT and asked it to estimate passenger miles traveled in traditional taxis versus rideshares since 2000. The results seem credible, yet they blew my mind. I like the table version best, because it builds suspense.

But you can view it in figure form if you prefer:

This is one of the clearest demonstrations of positive-sum change I know of. Yes, Uber devastated the taxi industry. But they didn’t just “drink their milkshake.” They made six additional milkshakes in the process. The combined effect of a massive price cut and a massive convenience boost multiplied vehicle miles roughly seven-fold. Who would have imagined that demand could be so elastic?

Last week, Alex Tabarrok gave me my first ride in a driverless car. The technology took way too long to arrive thanks to government, lawsuits, and paranoia. But it’s finally here, and it’s fantastic. 9/10. In the next ten years, we’re going to see another Uber-sized revolution in transportation.

Consider: The cheapest self-driving Tesla is a bit under $40k. A car that netted just $100 a day would pay for itself in about one year. Subtracting downtime for charging, they could be on the road 20 hours a day, and probably remain usable for 10 years. Even if they’re empty half the time, and energy and maintenance double the cost of the car itself, the equilibrium price is about $2 an hour. Truly, it wouldn’t be surprising to see paid miles multiply another 7x.

The main risk is that the federal government regulates this technology into the ground. But now that self-driving cars are already on the road, we’ve probably escaped. It’s a perfect time to go full Magneto on the status quo and gloat, “You should killed me when you had the chance!”