Driverless Shuttle Economics On The Back Of An Envelope

I wrote last week that “driverless shuttles seem to be having a moment.” Today, I wrote about an announcement from May Mobility that seems to cut against that trend.

I confess, the economics of autonomous shuttles have never been obvious to me. On one hand, public transit generally amortizes its cost over many passengers. On the other hand, the benefit of autonomy is usually seen as the cost of removing the driver from the vehicle.

But if the cost of the driver is borne by many passengers, then per-passenger economic benefit to removing the driver would be small.

MLive actually provides some interesting data to crunch. First a disclaimer: with the exception of the MLive data I cite, I am making up all the other numbers here. I could be way off. Just a thought exercise.

Pre-COVID, ridership of the May Mobility autonomous shuttles in Grand Rapids, Michigan, was 7,000–11,000 per month. Let’s average that to 9,000 riders per month, 108,000 per year. The total cost of running the service for the year was about $900,000, paid by a combination of the city, private donors, and May Mobility itself. That’s about $8 per ride.

The new on-demand, point-to-point ridehailing program in Grand Rapids will have five May Mobility vehicles running at a time. I don’t see how many shuttles the old program had running at a time, but let’s say two. Let’s also imagine the program ran for 12 hours per day, 365 days per year, which is 4,380 total hours.

At a fully-loaded cost of $40 per hour (total guess, municipal wages tend to be low but benefits tend to be generous), that’s $175,000 to cover the cost of the drivers for the year. That’s about $2 per rider.

$2 per rider is something — in fact, it’s probably about the cost of a bus ride in many US cities. But it’s also a pretty small share of the $8 per rider cost of the autonomous shuttle program.

Probably the $8 per rider cost includes expenses for a vehicle safety operator, who presumably costs much more than $2 per passenger but also hopefully will eventually become unnecessary.

Still, even without the safety operator, the pilot program probably costs $4-$5 per ride.

But I suppose the end game is that over time the rests of the costs will tend toward zero, and you can only move the driver cost toward zero with autonomy.

Originally published at http://davidsilver.blog on August 16, 2021.

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