I can remember as a kid, being obsessed with Kitt from Knight Rider. This Black Pontiac Firebird instantiated as a super computer deployed to the world to fight crime was simply beyond cool. Lately, it seems that some of the most classic science fiction over the last 50 years has turned out to be a good barometer of the future. Google’s self-driving car project now called Waymo, is an ambitious effort to change the way we look at personal transportation in the future. According to Google, they claim that Waymo is a self-driving technology company instead of just a self-driving car company. The distinction is important as the product is still in its development phase of the product life-cycle. Because of this, pricing for this product will have different strategies deployed over the next 10 to 15 years.
According to Patriot software, one of the attributes of a product that is still in the development phase is uniqueness of a product driven by a lack of instant consumer demand for it. The pricing approach for the driver-less car will absolutely be impacted by this. Although, Google has credibility and is an obvious leader in the technology sector they will need to take unconventional and creative approaches to educate the world on the safety of the driver-less car, the basics on how the technology works and continue to leverage existing and credible coalitions to promote their product. In an article published by Motley Fool, they remind us that Waymo has over 8 years of self-driving experience in 20 U.S. cities and has completed more than 3.5 million miles on public roads and 2.5 billion with a “B” simulated miles in 2016 alone. This significant yet small start, has made Waymo the undisputed leader in this space. With this data and experience, Waymo is partnering with a set of powerful coalitions such as M.A.D.D (Mothers Against Drunk Driving), the Foundation for Blind Children and the National Safety council to launch an aggressive education campaign to inform the public of the potential a self-driving car could have for disadvantage members of the community. In my opinion, because the actual car itself is simply the “hardware” for the bigger technology ecosystem, I think pricing strategies would have to consider the longer term revenue potential of having a service based self-driving economy, where a person pays a Google services subscription and not only gets access to a driverless car, but through the uses of other google services gets a ticket to participate into an interconnected transportation experience powered by Google. My approach would be to try and introduce a penetration pricing strategy for the actual “hardware” which is the car. Sell the car at an extremely low price, or in some cases give it away for almost nothing. Once the market was penetrated and the public was educated and comfortable, the data and services Google could offer which fuels the driverless car ecosystem becomes the value proposition and the product becomes less about car and more about the transportation experience.
An easy example of another industry that has leveraged this pricing strategy are the cable providers. Take AT&T for an example. When you subscribe to U-Verse, they essentially give or lease you the hardware. They also will come out an install the system as part of the package for a low cost. They also will give you an introductory discount for the monthly services. Once you are hooked and it becomes embedded in your day to day life, it becomes extremely hard for you to bail on their services. Now there are lots of problems with cable and internet providers that I won’t get into, but according to Statistica.com, the subscription revenue for cable and internet providers generated over 26.24 billion U.S. dollars selling air time. The costs of the cable boxes which the services cannot be used without is simply the delivery mechanism for the services. The same model and pricing strategy that Google will need to deploy.
References :
https://www.recode.net/2017/1/27/14399770/waymo-google-supplier-self-driving-car
https://www.patriotsoftware.com/accounting/training/blog/what-is-product-life-cycle-management/
https://www.fool.com/investing/2017/10/22/googles-strategy-to-educate-the-public-about-self.aspx
https://medium.com/stellarpeers/how-would-you-launch-googles-driverless-car-service-cf281e9742ac
http://smallbusiness.chron.com/pricing-strategy-theory-1106.html
https://www.statista.com/statistics/185214/revenue-breakdown-of-us-cable-and-pay-tv-providers/
Bluescoder I/O 
My concern with a self-driving car is that it won’t always be reliable! I would be afraid that it would malfunction and crash! But, if ALL people chose to use this type of transportation, maybe the likely hood of a crash is less likely than before. I just don’t know how I would feel about anything less than full control behind the wheel. I think it was in the movie Batman (or Wolverine) where driverless commercial trucks were on the road with standard vehicles. The commercial trucks zoomed by but I wondered about the standard vehicles operated by a human, and how that would affect the safety of the road.
I like your pricing/package ideas for this, but it’s so hard to imagine a world with driverless vehicles!
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