Why Uber wants to win the driverless car race

Why Uber wants to win the driverless car race

Rewind the clock 10 years.

It’s the end of a night out with friends and time to head home.

“Let’s grab an Uber …” you suggest.

Back then, you’d have been greeted with bewildered looks: “Does he mean a kebab?”

Today, everyone would be reaching for their smartphones to see who can summon the closest Uber driver, and estimate the fare and pick-up time.

In less than a decade, the ridesharing app has gone from standing start to global success: a $1.5 billion business with thousands of drivers on its books in hundreds of cities around the world.

[callout]”Uber is becoming like Hoover – the brand name is interchangeable with the product”[/callout]

Of course, it’s not the only ridesharing app; Lyft is one of several competitors.

But Uber is becoming one of those rare brands whose name is interchangeable with the product or service they offer – like ‘Hoover’ and ‘vacuum cleaner’ a century ago.

You don’t call a rideshare. You grab, summon or catch an Uber.

But wind forward the clock by 10 years, and you’ll find that Uber wants to be different.

Driverless: For The Win

“Driverless in 2030 FTW… :)” tweeted Uber chief executive and co-founder Travis Kalanick in a Twitter chat with American journalist Dan Primack in February 2015.

It might have been dismissed as a throwaway tweet at the time, but Kalanick wasn’t joking.

One year later, Uber announced it was working with researchers at Carnegie Mellon University in the United States on testing a driverless hybrid Ford Fusion on the streets of Pittsburgh.

Why Pittsburgh?

In an interview with the Chicago Tribune about the city’s relationship with Uber, Mayor William Peduto said: “Pittsburgh has challenging topography, different types of weather and bridges. That makes it an interesting place to test. It’s a small city, so you can do things here; it doesn’t get bogged down in red tape.”

If you can get it right in Pittsburgh, you can get it right anywhere – or so Uber’s thinking goes.

[callout]”A driverless Volvo XC90 will roll up with a passive human ‘pilot’ to take control if need be”[/callout]

Today the city is home to Uber’s Advanced Technologies Center, staffed with dozens of roboticists and AI experts recruited from the nearby university.

And today, you’ll also see how far testing has come.

Summon an Uber in Pittsburgh and there’s a good chance one of 100+ driverless Volvo XC90s will roll up to your door with a passive human ‘pilot’ to take control if need be.

And just to be sure you don’t change your mind when you see it’s driverless, the ride will be free.

So what prompted Kalanick’s tweet in 2015? Why is Uber interested in driverless?

To answer that, you need to look at the origins of the business.

The reasons for Uber’s success are also its biggest headache …

Kalanick and Uber’s co-founder Garrett Camp came up with the idea for a rideshare app in late 2008 while at a conference in Paris – and after struggling to hail a cab one snowy night.

Already millionaires from the growth and sale of previous businesses, their original idea was for a limo-sharing, luxury driver service.

But that original idea evolved into the mass market service that now operates in more than 554 cities and major towns around the world.

Uber’s success has depended on two basic things.

Firstly, being able to recruit drivers quickly to offer wide coverage in each city it operates in.

Secondly, being able to persuade customers to download the app.

The pitch to drivers was that you will be working for yourself: no joining the taxi rank to wait in line, no living in hope that the controller in the taxi office will decide to put work your way. You’re connected directly to customers.

The pitch to customers was convenience: no cash, quick arrival and cheaper than an existing black cab service. The benefit to both: reviewing the driver and the passenger so that everyone is on their best behaviour.

Breaking into new cities often started small; targeting clubgoers in London’s West End, for example.

But it’s also come at a cost.

Uber and its drivers

Uber’s relationship with existing taxi firms has been fractious at times; with demonstrations against it in some cities. But its relationship with its own drivers has been controversial too.

In January 2017 Uber agreed to pay drivers in the United States $20 million to settle a legal claim they had been misled over how much they would earn by joining the service.

The settlement came less than six months after a UK employment tribunal ruled that Uber’s 40,000 drivers in Britain were ‘employed’ by the firm rather than independent contractors.

The ruling meant UK drivers were entitled to the national minimum wage, holiday pay and paid rest breaks.

Is it a surprise then, that driverless ridesharing looks like an attractive option to Uber?

Remove the highest cost of Uber travel – what the drivers need to earn – and ridesharing becomes far cheaper than other modes of transport. You’re playing up the benefit to customers while cutting out tricky business relationships or needing to recruit new drivers to launch in a city.

Will driverless ridesharing become so cheap, in fact, as to persuade city dwellers to give up car ownership for good?

Testing times

At times, Uber’s driverless testing programme has hit the headlines for the wrong reasons.

In December 2016, Uber and the state authorities in California were engaged in a public spat about whether the firm’s driverless Volvos had testing permits.

The disagreement was compounded by video footage apparently showing a driverless Uber skipping a red traffic light in San Francisco. As a result, Uber switched its testing to neighbouring Arizona.

In the same month, the company admitted that its driverless cars were having difficulties in handling cycle lanes.

[callout]Uber: “Every day of testing leads to improvements”[/callout]

But Uber seems committed to that long-term goal first tweeted by Kalanick in 2015. According to Uber:

“We believe this technology will mean less congestion, more affordable and accessible transportation, and far fewer lives lost in car accidents. These goals are at the heart of Uber’s mission to make transportation as reliable as running water – everywhere and for everyone.

“While Uber is still in the early days of our self-driving efforts, every day of testing leads to improvements. Right now we’re focused on getting the technology right and ensuring it’s safe for everyone on the road — pedestrians, cyclists and other drivers.”

So will Uber win the driverless race?

There’s little doubt that the auto industry, regulators and major digital players see driverless ridesharing as playing a part in urban transport in the future.

It’s been talked of as a ‘first mile, last mile’ cheap solution for people to connect with other transport hubs – train stations, bus stops or airports – or to simply commute to work or go shopping.

But it’s not entirely clear that this will ease city centre congestion.

And the big unknown is how receptive the public will be to driverless vehicles when the current era of testing attempts to go mainstream?

Could the spanner in Uber’s plans for driverless be something quite simple: people like to drive?

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