Autonomous vehicle technology is reshaping the ride-hailing industry, as Uber and Lyft drivers report declining earnings due to competition from Waymo One robotaxis. Jason D., a 50-year-old full-time Uber driver in Phoenix, told Business Insider that driverless taxis are “flooding an already competitive Phoenix market and taking money from human drivers.”
Waymo One, Alphabet’s autonomous taxi service, announced in August that it provides more than 100,000 paid rides weekly across Los Angeles, San Francisco, and Phoenix. The company plans to expand to Atlanta and Austin in early 2024, with services integrated through the Uber app. This expansion represents a significant milestone in the commercialization of autonomous vehicle technology.
Several drivers across different markets shared their concerns about the economic impact of robotaxis. John, a 43-year-old driver in Phoenix, noted that Waymo vehicles compete directly for rides and sometimes offer cheaper fares than traditional ride-hailing services. However, the full extent of robotaxis’ impact remains unclear. Carl Benedikt Frey, a professor of AI and work at the Oxford Internet Institute, stated there’s currently little evidence of significant earnings impact, but warned that “as the technology gets better and cheaper, drivers will feel it in their wallets.”
Frey drew parallels to Uber’s initial market entry, which reduced traditional taxi drivers’ earnings by approximately 10%. He predicts similar effects as robotaxi technology improves and prices decrease.
Geographic and operational restrictions currently provide some protection for human drivers. Brad, a full-time Uber driver in Los Angeles, feels less threatened because Waymo primarily handles shorter, less profitable rides in his market. Airport trips—considered the “bread and butter” for many drivers according to Nicole Moore, president of Rideshare Drivers United—remain largely protected, as robotaxis face airport restrictions in Los Angeles and San Francisco, though they’re available in Phoenix.
Safety concerns persist around autonomous vehicles. Jason reported that robotaxis in Phoenix are sometimes “hazards on the road,” frequently cutting off other drivers and making sudden lane changes. In June, Waymo recalled 672 driverless taxis after one struck a utility pole in Phoenix. Despite these concerns, some passengers express comfort with autonomous vehicles, viewing them as potentially safer than human drivers.
Key Quotes
Driverless taxis are flooding an already competitive Phoenix market and taking money from human drivers.
Jason D., a 50-year-old full-time Uber driver in Phoenix, describes the immediate economic impact of Waymo’s robotaxi expansion on human drivers competing in the same market.
As the technology gets better and cheaper, drivers will feel it in their wallets. We’ve seen this movie before: When Uber first showed up, it reduced traditional taxi drivers’ earnings by about 10%.
Carl Benedikt Frey, professor of AI and work at the Oxford Internet Institute, draws historical parallels to predict how autonomous vehicles will increasingly impact driver earnings as the technology matures and scales.
I am fundamentally opposed to driverless rideshare because I do believe my income is being impacted.
Phoenix driver Jason D. expresses his direct opposition to autonomous vehicles based on personal economic experience, representing the perspective of workers facing AI-driven job displacement.
I stopped picking up local rides a long time ago… the most profitable rides tended to be airport trips — specifically when he picks up passengers from their terminals — and robotaxis aren’t allowed at the airport.
Brad, a full-time Los Angeles Uber driver, explains how regulatory restrictions on robotaxis currently protect the most lucrative segment of ride-hailing work, highlighting the role of policy in managing AI’s workforce impact.
Our Take
This article captures a pivotal moment in AI’s real-world economic impact. What’s particularly significant is the gap between perception and measurable data—drivers report feeling the pressure, yet economists note limited evidence of substantial earnings impact so far. This suggests we’re in the early stages of a transition that will accelerate rapidly.
The strategic partnership between Waymo and Uber is especially noteworthy, as Uber essentially facilitates its own potential obsolescence. This reflects a pragmatic recognition that autonomous vehicles are inevitable, and platform owners may survive the transition even as their driver workforce doesn’t.
Most telling is the role of regulation as a temporary buffer. Airport restrictions and geographic limitations currently protect drivers, but these barriers are unlikely to hold long-term. The technology will improve, costs will decline, and regulatory frameworks will adapt. The question isn’t whether AI will transform ride-hailing, but how quickly and whether society will implement adequate support systems for displaced workers.
Why This Matters
This story marks a critical inflection point in AI’s impact on the workforce, demonstrating how autonomous vehicle technology is moving from experimental phase to real economic disruption. With Waymo providing over 100,000 weekly rides and expanding to new markets, we’re witnessing the first large-scale displacement of workers by AI-powered systems in the transportation sector.
The implications extend beyond ride-hailing drivers. This represents a template for how AI automation will affect other service industries—gradual market entry, initial coexistence with human workers, followed by increasing competitive pressure as technology improves and costs decline. The 10% earnings reduction that traditional taxi drivers experienced when Uber launched foreshadows what could happen as robotaxis scale.
For policymakers and business leaders, this raises urgent questions about workforce transition, safety regulations, and the social contract around automation. The fact that geographic restrictions (like airport access) currently protect some driver income highlights how regulation will play a crucial role in managing AI’s labor market impact. As autonomous vehicle technology becomes more sophisticated and economically viable, millions of professional drivers worldwide could face similar disruptions.
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