PitchBook Analyst Note: Robotaxis and the Road to Profitability

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Why robotaxis must expand to densely populated cities

Last fall, Waymo dipped its wheels into commercializing robotaxis. For now, you can hail a Waymo driverless ride in a limited area of Phoenix. 

While suburban locations such as Phoenix are safe testing grounds, we believe companies developing robotaxis will have to expand to densely populated areas to achieve profitability. PitchBook’s latest Emerging Tech Research analyst note presents a model of robotaxi revenue and operating costs in a densely populated city such as San Francisco and compares it with a more spread-out city center such as Indianapolis.

Key takeaways
 

• Relative to lower-density areas, operating autonomous vehicles in dense cities presents numerous complications, which limit routing and opportunities to service highly profitable trips.

 

• We believe the majority of the revenue and profit opportunity for automated mobility services is in dense cities—where trips are frequent and prices are high. 

 

• We expect Waymo’s recent $2.5 billion raise signals the company is preparing to transition to a larger, more densely populated city—likely San Francisco, where it would come into more direct competition with Cruise. 

 

• Based on our analysis, we expect the robotaxi industry will achieve human-like levels of safety by the middle of the current decade and superhuman levels by decade’s end.