Have you ever heard of overhead? When running a technician type job, a 5x cost multiplier on materials / labour is extremely reasonable. I ran an FTTP ISP, and the minimum cost of a service call started at $250, with labour (at $25/hour) frequently being only $50 of inputs to that cost (1/5th of the cost). Every service call has to cover the cost of the travel time (easily 1+ hour), fuel, vehicle, insurance, tools, and materials. Plus there is dead time when a tech isn't being fully utilized. That means billing 5x to 10x the labour cost
just to break even.
Having AI robots do the work does not materially change or reduce that basic cost structure, as labour is one of the smaller inputs to the cost of the service call.
I get that people on the outside of the service industry looking at 5x or 10x markups see them as being "ridiculous", but that is because they aren't looking behind the scenes to see how the sausage is made. The service industry is nothing like tech where the marginal cost of delivering software drops as the number of the users (and developers) increases. A single truck equipped with the required tools can only be used for so many service calls in a given week, and swapping out the human with a robot isn't going to change that. Moreover, increasing utilization significantly beyond 8-12 hours per day seems unlikely to happen as there probably isn't much appetite in the general population to meet and greet a service robot into their home at 3am then explain and show what the issue is that needs to be resolved. There's no way that a 3am service call can cost 50% less than daytime service call.
In contrast, the marginal cost overhead of spinning up one more software developer for big tech is almost nothing. You might spend $2000 for a computer and another $1000 for a desk and chair for them to sit on, and virtually everything else (data centers, servers, networks...) is shared infrastructure. That's nothing compared to trades where you have to buy a truck and outfit it with tools for $100k to support 1 employee. [The bucket truck I have cost $125k, and equipping it with the bare minimum of tools required was another $25k on top of that.]
Sometimes I wonder if anyone has done the basic napkin math to figure out if pushing AI into certain jobs is going to be even remotely economically viable. Personally I view this as a symptom of the larger problem that there are very few "good" ideas left for VCs to throw piles of otherwise idle money into, which directly leads to a kind of VC slop where unprofitable ideas get subsidized and offered to the general public "for free"... until it isn't. Then we'll be stuck with monopoly AI HVAC firms and their 27B stroke six forms making everything miserable for us.
Having AI robots do the work does not materially change or reduce that basic cost structure, as labour is one of the smaller inputs to the cost of the service call.
I get that people on the outside of the service industry looking at 5x or 10x markups see them as being "ridiculous", but that is because they aren't looking behind the scenes to see how the sausage is made. The service industry is nothing like tech where the marginal cost of delivering software drops as the number of the users (and developers) increases. A single truck equipped with the required tools can only be used for so many service calls in a given week, and swapping out the human with a robot isn't going to change that. Moreover, increasing utilization significantly beyond 8-12 hours per day seems unlikely to happen as there probably isn't much appetite in the general population to meet and greet a service robot into their home at 3am then explain and show what the issue is that needs to be resolved. There's no way that a 3am service call can cost 50% less than daytime service call.
In contrast, the marginal cost overhead of spinning up one more software developer for big tech is almost nothing. You might spend $2000 for a computer and another $1000 for a desk and chair for them to sit on, and virtually everything else (data centers, servers, networks...) is shared infrastructure. That's nothing compared to trades where you have to buy a truck and outfit it with tools for $100k to support 1 employee. [The bucket truck I have cost $125k, and equipping it with the bare minimum of tools required was another $25k on top of that.]
Sometimes I wonder if anyone has done the basic napkin math to figure out if pushing AI into certain jobs is going to be even remotely economically viable. Personally I view this as a symptom of the larger problem that there are very few "good" ideas left for VCs to throw piles of otherwise idle money into, which directly leads to a kind of VC slop where unprofitable ideas get subsidized and offered to the general public "for free"... until it isn't. Then we'll be stuck with monopoly AI HVAC firms and their 27B stroke six forms making everything miserable for us.