If an autonomous vehicle – with all its sensors and computing – costs way too much for individual drivers to have in their garage just yet, why are they so cheap to hail when they’re part of a robotic taxi fleet?

A Tech Briefs reader asked Chris Heiser, co-founder and CEO of Renovo, a California-based developer of autonomous-vehicle software platforms the following question:

“If autonomous vehicles are too expensive for an individual to own, how is the cost per mile so low to hail one?”

Read Heiser’s edited response below:

Chris Heiser: It has everything to do with utilization. The vehicle that we run with our customers today costs anywhere from $200,000 to $300,000. That’s the cost of the vehicle, all the sensors, and all the computing — and the sensors and computing are really, really expensive.

So, if you could buy such a car yourself, you’re only using it about 4% of the day. And that translates to about 10,000 miles per year. Your utilization of the vehicle is so low that the capital depreciation is just killing you. You’re going to spend $5 to $10 dollars a mile operating the vehicle.

If you take that same vehicle and you operate it 12 hours a day in a robo-taxi fleet — now you’re driving 120,000 miles, or 12 times the mileage. You have the same capital asset. It wears out a little bit faster, but it turns out that the things that wear out are things like the battery, which while not cheap are a small capital slice of the vehicle.

So, immediately you take the exact same quarter-million-dollar asset, you run it at a high utilization, and it costs you under a dollar to run. That is really the power of these fleets — they take a system that is not economically viable in the current automotive world and turn it into a very economically viable and very useful asset to be managed by the fleet. This is why GM Cruise  is thinking about doing their business differently; this is what Volkswagen MOIA  is doing; this is what Ford Smart Mobility  is looking at — these fleet management businesses, because it completely changes the economic picture for individual mileage cost.

What do you think? Do you see robo-fleets as a “very economically viable” asset? Share your comments and questions below.