Economics of owning a car

Investment Analysis Clubs Macro Economic Trends and Risks
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I have been reading the Tesla BYD thread that has gotten into big discussion about MAAS.

While the back and forth had gotten deep into the costs associated with operating a car and with operating what is essentially a driverless Uber, I believe the actual
economics are over looked.

The first thing one needs to consider about a car, are any thing actually is the actual value of that thing to the consumer.

Right now, Apple is bigger than many name brand companies. It has more cash in hand than AT&T has in market cap. Why? Why is the economic value of an Iphone, or other smart phone so high? Is it the actual value of replacing a pager, cell phone, library, camera, video camera, production studio, dark room, game console, alarm clock, calendar, note pad, rolodex etc. Or is it more. Is it simply worth it to the consumer?

A car has value beyond transportation. You can store stuff in it. You can change diapers in it, you can crank up the tunes in it, you can snuggle up to your lover in it, (and more). These all have value that is simply not available in MAAS.

On the other hand, MAAS allows a nice and affordable Uber to exist. The existence of an affordable Uber allows for less parking, maybe smaller roads and more walkable living areas. So, MAAS could create more city centers.

How important is the spacing of roads and parking? I can give two mid west examples and two Asian examples.

Fargo North Dakota has a tight pre-car downtown. The streets are barely three lanes wide. Thus a lot of one way streets and no on street parking. I lived on the edge of downtown Fargo. I could walk it, even in the dead of winter. (I typically did not walk much sub 5 degree wind chill though)

Sioux Falls South Dakota is a little warmer, but actually gets more snow. The roads in downtown are 4 lanes wide and have on street parking. These wide roads made it unpleasant to walk downtown Sioux Falls. Just the width of the roads made the difference.

I experienced the same thing in Hong Kong and Taipei. Hong is an old pre car city, Taipei is a city laid out by US city planners from the 60’s (Maybe 50’s). The roads are broad with plenty of parking. It takes forever to cross one.

I point this out to say, MAAS will probably take a very long time to make a major impact on habits as the evolution will probably happen at speed that societies change and no faster. Having seen the deliberately walkable built 30A area between Panama City beach and Destin in Florida, I can see how a driverless Uber could push the development of dense suburban pockets or dense villages near high speed rail lines.

But that is something to watch for, not plan on.

Cheers
Qazulight

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Uber is using people. Cab drivers were not rich but they made more money. Uber has changed their terms with the drivers to take more on an advantage in the last few years.

Immigrants borrow from Uber for a car and then have to work 85 hours per week to pay for the car and have a few bucks in their pocket. There is nothing decent about the company. Last I heard the company was not making money which just shows us the real cost is higher. The model as far as I know is not sustainable. It certainly is not just.

Bottom line society can not predicate MAAS on Uber and Lyft…or Doordash. We need a much better plan.

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MaaS is intended to replace a vehicle driven within the specified area at a price that is less than owning (all costs) your own vehicle. Having other services also available (business deliveries, etc) via the system further reduces costs to all users.

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Point taken. So your delivery comes to your driveway. You are in your 90s, you are in a wheel chair or you are having an emergency going on…it is raining? It is snowing? Whatever? You need a human being…that is why there is delivery.

It is a pie in the sky discussion.

I was 18 years old reading Advise and Consent. In the novel the Post Master General was in front of a senate committee discussing using rockets to send the mail from NYC to LA. Brilliant plan…way ahead of its time. Still way ahead of its time. There are things that never actually get a time.

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If you can not reasonably get a delivery from your driveway, you would NOT order the item to be delivered that way. I do not own a car ($$), so I do NOT try to go to the store. I shop via a variety of programs that deliver to me. They bring the packages into the building (which is all I require). But they would bring to my apt door if I wanted them do so.

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Most of the higher profile mock ups of our future involve driverless. Nothing but automation.

You are back peddling. :rofl: :rofl: :rofl:

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As long as the vehicle is accessible in the winter, that works. How that is handled is up to the delivery service. Remember: Just because a driver is not required does not mean a person couldn’t ride in the vehicle to move items from the vehicle into a house, apt building, etc.

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Hard to figure out a cost savings with this then. What you’ve just described is a UPS truck. With a driver.

The telecommunications industry used to talk about “the last mile” problem, getting cable or fiber to the front door. I’d submit that these self-driving delivery services will encounter “the last 100 feet” problem. Unless everybody agrees to just dump packages on the street at the curb, which nobody will.

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Why? I personally see the opposite.

You can’t really have MaaS (different from Uber or Lyft) without vehicle autonomy. And vehicle autonomy makes driving better, for the most part. Other things being equal, assuming a pretty safe and effective AI driver, you’d rather have the car drive itself than for you to drive it (regardless of who owns the car).

Autonomous driving eliminates some of the benefits of transit. You can work/read/watch movies in a private car now, too - and presumably AV’s will be somewhat safer (especially for teens and drunk people, who cause a lot of our accidents).

All of this makes it more likely that people will demand more auto driving transportation, not less. You’re reducing the nonmonetary costs of travelling by car - which should make people more willing to disperse from dense urban areas. A “nice and affordable Uber” doesn’t just make urban living nicer - it makes suburban living nicer, too. And I suspect the latter will outweigh the former, overall.

Albaby

especially since MaaS will probably obliterate mass transit systems in all non-NYC metros.

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That needlessly raises costs.

I think MAAS will mostly be mass transit if only for busses with ten to twenty people on board. Or smaller rail cars that subdivide into different directions on the paved roads.

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Not needlessly. And it probably won’t raise costs.

To clarify terms, by “MaaS” I’m referring to a service that provides rides in autonomous private passenger cars. That service will generally provide a superior passenger experience to bus and rail mass transit, since it can provide direct transportation door-to-door from the rider’s current location to their destination.

That type of service will be a brutal competitor to existing mass transit. It will be difficult for MaaS to be cheaper than owning a car for most car owners, but it will be vastly cheaper than running a municipal bus system for nearly all metros. Especially for “coverage” routes - lightly used routes that don’t run through areas of very dense ridership, but which expand the geographic scope of a system to include most of a city. The same is mostly true for rail, except from high density suburbs into very job dense CBD’s.

We provide publicly subsidized mass transit to accommodate people who can’t drive themselves, or who choose not to. But once we can provide them with direct-to-door transportation more cheaply than taxis, the cost difference between direct-to-door and mass transit will be too narrow to justify forcing those people to bear the time expense of pooling their trips.

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So I’m going to wait for a self-driving car to pick me up to take me to the train station where I can wait for a train, so I can wait in a taxi line for another driverless car to take me to work, or…

I can take a car from door to door.

Tough choice.

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I’m just not seeing it. I am in suburbia. I cannot see myself doing without car and relying instead on some autonomous car as a Transportation as a Service to take me places.

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When people work in Manhattan but live in Queens or Brooklyn this raises the costs. The city is small people can walk a block or two to and from their doors. People do not drive cars in a lot of cases anyway.

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Ah. You might have mis-read my post. I think that MaaS will decimate mass transit in non-NYC metros. NYC is such an outlier in transit use and population density that it’s one of the few metros for which large-scale mass transit makes sense.

Outside of the NYC metro area, MaaS is likely to significantly erode transit use.

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You are assuming a lower cost than mass transit. I would not bank on that. Again walking from the bus stop is not a big deal.

You might be assuming a better schedule than the bus or train. But that is also not so the schedules of mass transit can be added to if it is in demand.

First mass transit needs to be in demand to give up your car. Next there needs to be a hybrid mass transit direct delivery to your door step model. Meaning split off coaches that do some of the work. That is possible but highly unlikely because of scheduling.

Again one person needing to get to a meeting here there and everywhere in between is more expensive than the assumed billable rate here.

If it is all cars left on the side of the road to take on a fixed monthly rate…that has been tried and the costs are too high.

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Mass transit is generally subsidized by govt in a variety of ways. MaaS/TaaS does not rely on subsidies. Walking from a bus stop can be a big deal, which is why MaaS/TaaS are “curb to curb” service–from pickup address to destination address. That is not how current mass transit functions–because it can’t.

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Is such a system in business and surviving anywhere?

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The vehicles do not yet exist, so the creation of such a business does not yet exist. However, both Barra and Musk agree that MaaS/TaaS is the way their respective businesses will be going once the tech is developed. IMO, Ford will do the same. VW, can’t say. Far larger international markets for them.

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If it is done cheaper that may be interesting. The public may not accept it anyway. So far people buy a lot of luxury vehicles with low gas milage so cost is not the determining factor in getting this off the ground.

That is the problem for Tesla right now bringing down the price points while keeping the margins.

Apple charges more for the iPhone but Tim Cook and even Steve Jobs did not have Christ Complexes on Elon Musk’s scale. Besides selling software is more profitable than selling hardware. Which sort of is Musk’s point…a light just went on in my head. That in large part is why Tesla can lower their pricing for the hardware.

Tesla is the only car that can have a driverless car because the company sells auto insurance to their car buyers.

F and GM can not do the same job yet selling car software.