Brandon Donnelly
Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly.
Brandon Donnelly
Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly.
One thing that I do not do on this blog is provide investment advice. And this post is certainly not that. But here's an idea and thought exercise that relates to urban mobility. Let's assume you own a personal vehicle that is currently valued at US$30k, and that this car is what you use to go about your daily life. Now imagine that you sold this car today, harvested all of the proceeds, and invested them into the following three companies: Uber, Alphabet, and Tesla. If you did this equally, your US$30k would end up as the following (based on today's share prices and if rounded down):
111 shares in Uber ($89.56/share)
49 shares in Alphabet ($201.42/share)
30 shares in Tesla ($329.68/share)
Then, instead of driving yourself around, you'd put the money that you would have normally spent on insurance, gas, and maintenance toward Ubers and Waymos (assuming Waymo is available in your city). Perhaps you even own a parking spot that could be rented out for an extra few hundred dollars each month. Whatever the specifics, let's just assume that what you used to spend to operate and service your car is now being spent on getting around using ride sharing services. It's a wash. So the only difference is that instead of having US$30k tied up in a depreciating asset, you're now part owner of the above three businesses.
This, once again, is not investment advice. I personally don't know how to make sense of Tesla's current valuation. There's a hell of a lot of optimism being priced in. I'm simply picking these three companies as a way to bet on Waymo's autonomous vehicle program (which is currently in the lead), Tesla's robotaxi promises (which, who knows, could actually materialize), and the fact that Uber might still remain the dominant marketplace for rides (though there's already evidence that Waymo is on track to overtake Uber in San Francisco within the next ~8 months).
It's not clear who will be the primary beneficiary of this shifting mobility landscape. Is Tesla right about LiDAR not being necessary? Will human drivers (and therefore Uber) still be needed to manage peak demand loads? Is the asset-heavy approach of owning AV fleets the wrong way to go about things for Waymo? I think it all remains to be seen. But I also think it's clear that autonomous vehicles have arrived and that urban mobility is changing right now, as we speak.
So I think there's a relatively high probability that everyone who owns a personal vehicle would be better off if they did what I am suggesting in this not-investment-advice-don't-do-what-I-write blog post. In other words, if we freed ourselves of the old ways and made some bets on the future. And that's ultimately the purpose of this post. It's so that you and I can come back to it on August 10th, 2030, and see how I did with my prediction. The reminder has been set.
Cover photo by Artur Aldyrkhanov on Unsplash
The autonomous vehicle narrative has historically gone something like this: remove the labor component of rides (i.e. drivers) and rides will become significantly cheaper. Then, people won't need or want to own a car anymore. They'll just Uber or Waymo or whatever around.
But as Waymo provides in and around 250,000 paid trips per week in the 4 cities in which it operates, the opposite has proven to be true — at least so far. A recent report by Obi (an app that aggregates real-time ride pricing) has just revealed the following for San Francisco during the period of March 25 to April 25, 2025:
In other words, Waymo is more expensive than Uber and Lyft, especially for shorter distances. Is this right? Well, Waymo may not have to pay drivers, but they do own and operate their own cars. Uber and Lyft do not. This represents a very different cost structure.
There's a lot of data/speculation out there about the impact of ride-hailing apps. Many dense urban centers are claiming that they have increased traffic (slowed average speeds) and pulled people away from public transit. The University of Toronto published this study last year. And the WSJ recently published this chart for Chicago:
To be honest, I'm not sure how much of the above is a result of ride-hailing apps, overall urban growth,
One thing that I do not do on this blog is provide investment advice. And this post is certainly not that. But here's an idea and thought exercise that relates to urban mobility. Let's assume you own a personal vehicle that is currently valued at US$30k, and that this car is what you use to go about your daily life. Now imagine that you sold this car today, harvested all of the proceeds, and invested them into the following three companies: Uber, Alphabet, and Tesla. If you did this equally, your US$30k would end up as the following (based on today's share prices and if rounded down):
111 shares in Uber ($89.56/share)
49 shares in Alphabet ($201.42/share)
30 shares in Tesla ($329.68/share)
Then, instead of driving yourself around, you'd put the money that you would have normally spent on insurance, gas, and maintenance toward Ubers and Waymos (assuming Waymo is available in your city). Perhaps you even own a parking spot that could be rented out for an extra few hundred dollars each month. Whatever the specifics, let's just assume that what you used to spend to operate and service your car is now being spent on getting around using ride sharing services. It's a wash. So the only difference is that instead of having US$30k tied up in a depreciating asset, you're now part owner of the above three businesses.
This, once again, is not investment advice. I personally don't know how to make sense of Tesla's current valuation. There's a hell of a lot of optimism being priced in. I'm simply picking these three companies as a way to bet on Waymo's autonomous vehicle program (which is currently in the lead), Tesla's robotaxi promises (which, who knows, could actually materialize), and the fact that Uber might still remain the dominant marketplace for rides (though there's already evidence that Waymo is on track to overtake Uber in San Francisco within the next ~8 months).
It's not clear who will be the primary beneficiary of this shifting mobility landscape. Is Tesla right about LiDAR not being necessary? Will human drivers (and therefore Uber) still be needed to manage peak demand loads? Is the asset-heavy approach of owning AV fleets the wrong way to go about things for Waymo? I think it all remains to be seen. But I also think it's clear that autonomous vehicles have arrived and that urban mobility is changing right now, as we speak.
So I think there's a relatively high probability that everyone who owns a personal vehicle would be better off if they did what I am suggesting in this not-investment-advice-don't-do-what-I-write blog post. In other words, if we freed ourselves of the old ways and made some bets on the future. And that's ultimately the purpose of this post. It's so that you and I can come back to it on August 10th, 2030, and see how I did with my prediction. The reminder has been set.
Cover photo by Artur Aldyrkhanov on Unsplash
The autonomous vehicle narrative has historically gone something like this: remove the labor component of rides (i.e. drivers) and rides will become significantly cheaper. Then, people won't need or want to own a car anymore. They'll just Uber or Waymo or whatever around.
But as Waymo provides in and around 250,000 paid trips per week in the 4 cities in which it operates, the opposite has proven to be true — at least so far. A recent report by Obi (an app that aggregates real-time ride pricing) has just revealed the following for San Francisco during the period of March 25 to April 25, 2025:
In other words, Waymo is more expensive than Uber and Lyft, especially for shorter distances. Is this right? Well, Waymo may not have to pay drivers, but they do own and operate their own cars. Uber and Lyft do not. This represents a very different cost structure.
There's a lot of data/speculation out there about the impact of ride-hailing apps. Many dense urban centers are claiming that they have increased traffic (slowed average speeds) and pulled people away from public transit. The University of Toronto published this study last year. And the WSJ recently published this chart for Chicago:
To be honest, I'm not sure how much of the above is a result of ride-hailing apps, overall urban growth,
They also have a more inelastic supply base, meaning they have cars whether demand is high or not. Whereas in the case of Uber and Lyft, supply can be variable. That's the idea behind "surge pricing" — to induce more drivers onto the road when it's needed the most.
Fewer Waymos also means that wait times are going to be longer and that their cars are probably spending more time driving around without paying passengers. That's a cost.
Whatever the reasons, lots of people seem to be willing to pay the premium. Part of this almost certainly has to do with the novelty of riding in an autonomous vehicle. I'd pay more if they were in Toronto today. But another reason seems to be that people really appreciate being in the car alone. I guess it's akin to driving your own car.
It, of course, remains to be seen how Waymo's cost structure and pricing model will evolve over time, but I have no doubt that privacy will remain a feature people are willing to pay something for. In the modern world, we are all going to have at least two places of solitude: bathrooms and Waymos.
Cover photo by gibblesmash asdf on Unsplash
But all of this feels to me like a bit of a red herring. People will obviously choose what is most convenient and relatively affordable. And congestion was a problem well before people started using these apps (demand > road supply). The only solution I have seen work is to price congestion/roads.
They also have a more inelastic supply base, meaning they have cars whether demand is high or not. Whereas in the case of Uber and Lyft, supply can be variable. That's the idea behind "surge pricing" — to induce more drivers onto the road when it's needed the most.
Fewer Waymos also means that wait times are going to be longer and that their cars are probably spending more time driving around without paying passengers. That's a cost.
Whatever the reasons, lots of people seem to be willing to pay the premium. Part of this almost certainly has to do with the novelty of riding in an autonomous vehicle. I'd pay more if they were in Toronto today. But another reason seems to be that people really appreciate being in the car alone. I guess it's akin to driving your own car.
It, of course, remains to be seen how Waymo's cost structure and pricing model will evolve over time, but I have no doubt that privacy will remain a feature people are willing to pay something for. In the modern world, we are all going to have at least two places of solitude: bathrooms and Waymos.
Cover photo by gibblesmash asdf on Unsplash
But all of this feels to me like a bit of a red herring. People will obviously choose what is most convenient and relatively affordable. And congestion was a problem well before people started using these apps (demand > road supply). The only solution I have seen work is to price congestion/roads.
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