The thing is…self-driving cars break Uber.
Indeed, with self-driving cars, we can just replace the “more drivers” element of the cycle with “more autonomous cars.” Drivers are intrinsically temporary. They are just people. They eat, breathe and sleep. They drive when they want to drive, and don’t drive when they don’t want to drive.
Autonomous vehicles are not temporary. Rather, they are permanent. Once they are on the road, they are available 97+ percent of the time to service riders (3 percent for gas, inspections, repair, etc.).
Autonomous vehicles break the “marketness” that makes Uber a market of drivers and riders. Supply will massively outstrip demand as vehicles become available 24/7 at dramatically lower marginal cost.
Autonomous vehicles will be much cheaper than human-driven vehicles. Today, humans are taking home 80 percent of the revenue (Uber the other 20 percent). Of that 80 percent, perhaps 30 percent is paid out for gas and vehicle maintenance, costs that autonomous vehicles must also incur. Thus, human drivers are taking home about 50 percent of the revenue they bring in; 20 percent goes to Uber, and 30 percent is the cost of servicing riders.