
Autonomous Cars Break Uber - kvee
http://techcrunch.com/2015/09/18/autonomous-cars-break-uber/
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jleader
Why wouldn't Uber just switch from being a marketplace bringing together
riders and drivers, to a marketplace bringing together riders and autonomous
cars (and their owners)?

I suppose a well-financed rival could buy huge fleets of vehicles and compete
directly with Uber, but Uber doesn't have to make that capital commitment.
They just continue to be the middle-man between the riders and the cars,
except the cars are no longer managed by their drivers, but by their owners
(whoever they might be, individuals or large corporations).

Uber's big advantage is that they've already created the market. This is Paul
Graham's idea about not automating in the early days of a startup taken to the
extreme.

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toomuchtodo
When I want to go somewhere, why wouldn't I use google maps to hail a ride
instead of Uber?

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stormbrew
Well, it _would_ break Uber if it weren't really clear that Uber is aware of
this and wants to get in on it as soon as they can. Digital cameras broke
Polaroid, but if Polaroid had gotten in on it early they could have been a
dominant force in an emerging market. I don't think Uber is Polaroid here.

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aaronbrethorst
Right. To riff on Clay Christensen, Uber is well-aware that self-driving cars
will disrupt them, and want to be the ones to bring that disruption to market
such that they have the opportunity to survive it and profit from it as
opposed to being Polaroided, or Kodaked.

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curiousjorge
but I find the timing of investing in self driving cars will be the end of
Uber, it's a pivot, one that will ultimately benefit Google and Tesla type of
established, tech giants with tons of data and hardware experience vs. a
mobile app backed by a business that owns neither it's people or drivers.

The article talks about network effect but it is grossly miscalculated.

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aston
The key change for Uber when we have completely autonomous cars is that we
will go from a two-sided marketplace matching drivers to riders to a much
simpler retail model: riders buying rides. Whatever mindshare and network
effects Uber has in the marketplace model will fall in importance, and the new
king in the space will be the company that can deliver rides cheapest and
fastest.

Uber is way behind Google and even Apple when it comes to calculating the best
routes from place to place...

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bpicolo
>Uber is way behind Google and even Apple when it comes to calculating the
best routes from place to place..

If that's really the issue they can pay Google or Apple. But I really doubt
it's that much far behind considering they just bought bing maps tech

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TearsInTheRain
I mean if they are just going to pay someone for the mapping and they are
going to buy their cars from tesla, what do they bring to the table? just an
app?

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bpicolo
Market penetration in 60 countries?

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TearsInTheRain
its an app, it takes 2 minutes to download a different one which most people
would do, especially if it was google or tesla or even honda

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ChicagoBoy11
This is completely wrong. Self-driving cars don't break Uber - self-driving
cars will help Uber reach its full potential. The assertion that Uber is a
service that matches riders with drivers is completely wrong. What Uber does
is match passengers with potential rides. As far as Uber is concerned, today
it is an unfortunate reality of technology that the only way that ride is
fulfilled is with a driver.

Drivers represent a huge cost in Uber's operation, and just a cursory glance
at Uber news reveals that drivers have also been the greatest threat to their
legal legitimacy. Uber is as highly valued as it is because it is one
transportation business whose model is completely safe in the autonomous
vehicle world. Uber will operate in exactly the same way it does today -- we
just won't have anyone up front.

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fraserharris
Ultimately the operating profit of a vehicle has to create a return on the
capital outlay. Uber's current network effect guarantees a high utilization as
autonomous vehicles are introduced.

higher utilization -> higher hourly operating profit -> margin to decrease
prices -> unprofitable for new entrants -> barrier to entry

Without an existing network, the (the considerable! $Bs) capital need to buy a
fleet of autonomous vehicles is prohibitive for even a determined new entrant.

(and so, as expected, the writer is wrong)

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fraserharris
Interesting corollary: a (future autonomous car) company planning on competing
with Uber in the future would be best positioned if they buy Lyft now and
operate it at a loss to grow their network.

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manicdee
"[Uber CEO Travis Kalanick] recently told me that in 2020, if Telsas are
autonomous, he'd want to buy all of them. He said all 500,000 of estimated
2020 production, I'd want them all, but he couldn't get a return call from
Elon." — Steve Jurvetson

Kyle Samani completely ignores the diagram he spent so much time talking
about. He's convincing himself that being able to park his $200k autonomous
car a few miles away in free parking—summoning it to pick him up when he needs
it—means he won't need to use a ride hailing service.

I wonder if he will still feel that way when he's been standing at the curb
for half an hour waiting for his personal car to arrive, while the rest of the
(non-car-owning) dinner party have hailed autonomous vehicles and departed
within three minutes of leaving the restaurant?

Given the choice between buying a $200k car, or paying a few dollars every
time I want to travel somewhere, I think I'd prefer the paid rides. The $200k
could be invested in something productive in the meantime.

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bmh_ca
Uber is a dispatch and marketing system. The vehicle and driver are fungible
parts of their machine.

Autonomous vehicles can enhance Uber's ability to offer travel with lower
pricing than traditional vehicles and dispatch. Especially once they have
goodwill built up.

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xbmcuser
Nothing will change instead of drivers buying a car and joining uber. People
will buy autonomous cars and register with Uber.

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niccaluim
I'm surprised there's no mention of Uber's Advanced Technologies Center. IIRC
this is exactly why they made it.

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samstave
Also the 1B investment in Uber by Google is clearly where this is heading...

