Waymo just launched a new $29.99-per-month "Premier" service in a select few of its cities. The member benefits include priority pickups, 10% cash back (sometimes more during busy times), early access to new Waymo cities, and flexible cancellations (up to five per month). Generally speaking, it feels pretty similar to Uber One, except it's 3x the cost. But if you spend more than $300 per month on Waymo trips, then the 10% cash back does pay for the service. We're now also talking about autonomous vehicles. Will that make a difference?

One of the early promises of Uber was that it was going to disrupt car ownership. People would just ride-hail. But as far as I can tell, that has not happened at scale. In the case of autonomous vehicles, one of the early promises was that if you took out the labour-cost component of ride hailing (i.e., the driver), you could then make rides really cheap and that would induce demand. But that too has not been the case thus far. In fact, riders seem to be willing to pay a premium to be in the car alone. This premium appears to be reflected in the price of Waymo Premier.

Where we got it wrong with Uber is that it ended up replacing taxis, not car ownership. But will autonomy and a nicer car experience change this? I like my car because I picked it, I use it to get where I have to go, and I store some of my stuff in it (including a fancy new car seat). But broadly speaking, I hate driving. If Waymo could fulfill my needs for, say, C$300/month, it would be in my economic interest to switch. I would have a very high willingness to pay if this is what I were replacing.

Changing consumer behaviour is hard, especially when we've built entire cities around a particular mode of transport. But sometimes products and services have seemingly subtle differences that surprise us in the way that the market responds to them. Will that be the case with Waymo? We shall see.