Beyond Robotaxis: Making Self-Driving AI Profitable

can be reached at nwakelin@gmail.com
can be reached at nwakelin@gmail.com
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The artificial intelligence technology required to bring self-driving cars to public roads is expensive to develop. While some companies are focused on creating fleets of robotaxis to become profitable, according to Reuters, Argo AI is taking a different approach with a pay-by-mile model.

  • Argo AI plans to expand beyond self-driving robotaxis.
  • The company is pursuing a pay-by-mile model.
  • Both Ford and Volkswagen have made significant investments in Argo AI.

Waymo is partnered with Chrysler to deploy fleets of self-driving Chrysler Pacifica minivans serving as taxis. According to Engadget, Tesla CEO Elon Musk expects to have self-driving robotaxis on the roads next year. While many companies see self-driving technology as a way to replace taxis in the future, Argo AI CEO Bryan Salesky thinks that’s too limiting.

Argo AI is taking a unique approach to making the development of self-driving AI profitable. (Photo: Argo AI)

Profits through partnerships

Salesky got his start developing automated vehicles 12 years ago in a competition sponsored by the Defense Department. Now, through multi-billion dollar partnerships with Ford and Volkswagen, he hopes to make AI technology profitable by expanding beyond just robotaxis. Those automakers each hold slightly under 40 percent of Argo AI while the Argo AI management team holds just over 20 percent.

Their business plan revolves around a revenue-sharing deal. Argo AI will be paid a fee based on the number of miles traveled in self-driving Ford and Volkswagen vehicles that feature Argo AI’s technology. This way Argo AI isn’t focused on simply getting its tech into a vehicle. It also needs to make sure the applications for vehicle use are more varied than taxis alone.

Possible commercial applications include long-haul trucking, e-commerce deliveries, fixed route transport in cities, and even off-road applications like mining. Hyundai has already demonstrated the first platooning of its autonomous trailer trucks, showing the potential for self-driving technology in the trucking industry.

Ford plans to deploy vehicles with Argo AI technology in late 2021. (Photo: Argo AI)

Self-driving vehicles coming soon

The self-driving technology Argo AI is developing is set to be included in Ford vehicles in late 2021. These vehicles will be launched as shuttle services, likely around the Ford Transit Connect. Initially they will be deployed in only three U.S. cities. From there, Ford plans to investigate applications of Argo AI’s technology beyond robotaxis.

Next up will be Volkswagen in 2022 or 2023 with an all-electric vehicle of their own design. It may be initially launched through Volkswagen’s ride-sharing service, Moia. Volkswagen has also received interest from outside ride-hailing and transportation companies interested in buying its vehicles for use in their fleets.

These multiple partnerships not only have the potential to increase the number of vehicles equipped with Argo AI technologies, but to increase those crucial miles traveled. While the plan for how to make things profitable is there, exactly how much to charge per mile is still being determined.

While Argo AI and its partners have confidence in their plan, other investors aren’t so convinced. The company has a lower valuation than its rivals. Waymo is valued at $105 billion while Cruise is valued at $19 billion. Argo AI is sitting at only $7.25 billion. This puts it at the same valuation as Uber’s self-driving unit.

Salesky plans to bring on more investors to bolster the business. He believes a diverse portfolio will be a benefit to the company as it develops AI technology to manage the future of self-driving cars.

WHY THIS MATTERS

Robotaxis are a great idea, but that’s only one small piece of future mobility. Argo AI’s focus on seeing self-driving AI in multi applications increase the chances that it will become viable and lead to long term profits as the industry comes into its own.


About the Author

can be reached at nwakelin@gmail.com
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