I strongly disagree. Car manufacturers would first have to build the entire sharing system and acquire a substantive user base - something Uber, Lyft et al. already have. This just isn’t their line of business. I don’t know of any manufacturers operating their own taxi companies (or bus manufacturers operating bus lines) so I doubt there is any meaningful advantage there. It’s not exactly impossible, once all the complications with human labor are eliminated, but it all depends on the shape the transitional phase will take and I’m quite skeptical GM will want to jump in at all.
Uber and Lyft will be operating autonomous car rides. If it’s more profitable than human drivers (which it will eventually be) why would Uber and Lyft be in a worse position than anyone else to acquire the necessary fleet? If they’re already in the precise same business, with an established customer base and brand recognition?
They can’t afford the debt, and putting more shares out there is betting on speculation going in your favor to not piss off the investors who are burning money in your company.
Well, that’s easy then: If you are convinced of your predictions, you can short the Uber stock, comfortable in the knowledge that they are shortly bound to fail and go bankrupt, and make a lot of money on it.
They’re not car manufacturers with an established revenue model and the ability to sell cars to their own subsidiary at very favourable rates. car2go (a car-share service that’s more likely to be the model for the autonomous future than ride-hailing services) is owned by Daimler and the fleet is made up completely of Smart and Mercedes cars – they don’t have to worry about staffing when it comes to drivers, and Daimler’s R&D department and M&A departments are trying to make sure that drivers of any sort won’t be an issue.
Avis is not a manufacturer, but they are an established company and have a long history of working with them to build their own fleets at a cost-effective price. I mention them because they own the other major car-sharing service, Zipcar, and because they too are taking an interest in autonomous vehicle R&D. Uber is not Avis.
They’re also not Apple or Google or Amazon, who can pay hard cash for fleets if they’re inclined to get into the business instead of just selling the technology. They don’t have to leverage themselves on the back of stock market speculation to get there.
Uber and Lyft have their own automated car R&D efforts and may want to switch away from the ride-hailing model (an interim business model in their own visions of the future) to the automated car share ones, but if they want their own fleets they’ll have to pay substantially more than car2go will.
While I use Lyft sometimes, I wouldn’t go long on it or on the far more problematic Uber. These are companies still operating at a loss, building brands associated with a business model that they themselves expect to be gone. By the time they’re in a position to compete in the new market, the ride-hailing technology aspect will have been easily replicated and adapted to self-driving vehicles by companies like Google, and it will be all over save for the tears, the IP lawsuits, and the Randian overlords of Uber suddenly but too late realising the value of anti-trust regulation.
I live in Munich, ride public transportation, and if needed utilise one of three car sharing services (DriveNow, Car2Go or Flinkster) that I am registered with. Heck, we even have zip scooters and competing zip bicycle services. Owning a car just seems like a hassle.
Theres a whole lot I don’t understand about the technologist promise of autonomous vehicles but thats not quite the point here for me. When I need a taxi (including uber) the issue of how to get from point A to B is often a negotiation with the driver depending on their knowledge of the roads and the fact that most navigation systems do not in fact know the optimal route to point B.
In fact in my wife’s hometown in another part of Japan, the navigation system always proposes a non optimal route compared to my own knowledge of the roadways. This problem may be familiar to anyone who has had the experience of driving in urban or non urban environments.
Since autonomous vehicles rely entirely upon computerized navigation, non optimal routes mean longer ride times and higher costs per trip to the customer. Considering also that I can’t see how this works w/o picking up and dropping off more than one person per trip involving multiple destinations, the route calculation becomes even “worse” to me.
I didn’t know about Daimler and BMW - and it is a relevant point. These companies certainly have a leg up and would be able to make the transition to operating their own fleet rather easily, that is true.
But a lot depends on who and how comes up with the first reliable universal autonomous vehicle, the two extremes being a single manufacturer jumping ahead of the pack and obtaining a temporary monopoly on the tech or everyone finishing more or less neck to neck. In the second case, if the tech is widely available, competition will be tight and margins will be thin (the current gross margin on new vehicles seems to be below 5%) - in that case, the manufacturers don’t have such a tremendous advantage over someone simply purchasing the stock (yeah, the margins will likely be closer to luxury vehicles in this case, but still). If there is an effective monopoly or oligopoly on the tech, then the manufacturer does indeed have a major advantage and will be able to create its own network before anyone can reasonably catch on.
But then again - the two top contenders at the moment are Google (which doesn’t really manufacture cars at all) and Tesla, which doesn’t yet have the production capacity to saturate the market. So the ultimate outcome seems far from certain.
It’s useful for all of us to help Uber and the like disappear. We’re in a transition phase, and auto cars are only the first step. Auto manufacture of auto cars is next, and auto resource gathering for them.
By evaporating the profit out of the system, we may actually get something useful.
Mind you, they’ll all end up being like NYC cabs really, right? But New Yorkers seem reasonably happy with those.
Because I don’t want to take the chance of six puking drunks hiring my autonomous car. And I’d probably run afoul of some Ministry of Non Discrimination against the Alcoholically Challenged if I refused to hire it to them.
Let’s not forget fundamental changes in laws and regulations.
None of which is a problem to their investors. As 8080256256 says if Uber can pull off its aim of killing off enough of the competition in order to achieve a monopoly before its investors decide to pull out, more money is easy to acquire.
Personally I think they will find it impossible but their investors clearly don’t.
Because doubling the mileage, wear and tear, etc. on my car in return for the sort of rates of income that I could achieve by renting it out for use as a taxi sounds like an incredibly stupid deal. Let’s not even mention the staggering increase in insurance premiums, fuel, etc.
Of course, Uber might go through all the private equity cash first while still being unprofitable. With that caveat, I find O’Reilly’s thesis persuasive.
That said, I don’t understand how a company can be so hot when all it does is save snowflakes the effort of calling a phone number of a car service and little more. It’s the kind of business that looks impressive to someone pretty unfamiliar with using car services. Then again, I’m an old guy who remembers when businesses were managed for profitability instead of relying on financial gimmicks to tweak stock prices.
