Don’t expect to see autonomous self-driving cars in widespread use anytime soon, according to Lyft CEO David Risher. The technology doesn’t work yet, government regulators aren’t ready, and consumers don’t like them, he says.
That’s a surprising opinion, given that he aired it in a conversation at Web Summit in Lisbon last week, where 71,000 attendees seemed to be mostly convinced that AI will be able to solve almost any future problem.
Reality is going to get in the way, Risher told Fortune.
“That will be the case for years and years and years to come,” he said. The [car manufacturers] aren’t entirely ready. The technology isn’t entirely ready for fog or snow or heavy rain or whatever it is. People, riders aren’t necessarily excited about it [and] regulators aren’t necessarily enthusiastic about it in every place,” he said.
That’s going to make the rollout of self-driving slow. Risher said he would be surprised if 10% of Lyft’s business came from self-driving vehicles by 2030.
He thinks most people are wary of self-driving cars and prefer a human at the wheel. “Customers won’t demand it. They’ll just say, I don’t want to get in a self-driving car.”
Furthermore, the economics of self-driving are less appealing than most people think. At first glance, getting rid of all your drivers seems like an opportunity for ride-hailing apps to reduce costs while having a fleet of cars available that can respond to any call, for any ride, at any time—because driverless cars never need to sleep.
But Risher points out that a fleet of self-driving cars quickly becomes an expensive asset-depreciation issue. Every night, when the human customers are asleep, the fleet will sit largely unused, its value literally rusting away. All the maintenance, cleaning, and refueling costs would be on the company, and not the drivers. And self-driving cars aren’t cheap. “Today, these cost maybe $250,000 to $300,000, a very expensive product, whereas a Prius or Corolla is maybe $30,00 or $40,000.”
On that basis, it’s far more efficient for ride-hailing companies to not own cars and to instead rent them from individual drivers on an as-needed basis.
“I don’t think the idea of a driver being replaced by robot is a very likely thing. In fact, I think it’s zero likelihood in any reasonable time frame,” he said.