Although Google has a ways to go before driverless taxis are technically viable in most cities, according to a study by Lawrence Berkeley National Laboratory’s Jeffery Greenblatt and Samveg Saxena, the economics are already there:
“In New York City in 2005, only 24 percent of taxi fares went toward vehicle costs, with 57 percent going to drivers … driver income constitutes $97,600 per year, which could more than cover the incremental cost of autonomous vehicle technology [estimated at $150,000]. Even using current costs, if financed using identical model assumptions for vehicle capital, this would amount to $36,500 per year, 37 percent of New York City taxi driver income and 21 percent of total taxi fares. Therefore, autonomous taxis could replace current taxis at current autonomous vehicle costs and possibly even lower fares, providing an important early market niche.”
Economics isn’t destiny; the folks who own and work for the taxi industry are not going down without a fight, and as they have demonstrated in the past, they have plenty of political muscle in most big cities. But at this point taxi drivers are living on borrowed time.