
Self-Driving Cars Could End Uber - prostoalex
https://www.wsj.com/articles/how-self-driving-cars-could-end-uber-1494154805?emailToken=JRryc/B7aXiSgN08bcw800JtdaQMBaqFXFLJLXbFf0PFrmeQquW8w6lwit275H6lSFw/voxVszdiGW2J3Q%3D%3D
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sortaThrowaway
Or Uber will secretly program a few self driving cars that are not Ubers to
crash in to people.

This will stall self driving legislation for 5 more years.

you heard it here first.

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billynomates
Don't give them any ideas

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andy_ppp
I've said this for ages; uber-as-a-service that can be rebranded for people
who want to bring a fleet of cars is a fantastic business and Uber won't be
able to keep that monopoly with the expected returns investors want.

I also think automated buses will basically be free, you could sell this to
government on top.

I do not see how Uber won't die or at the very least struggle once a
Tesla/Apple/Google starts to compete on costs.

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Angostura
Alternatively, surely it could see its business model get a massive boost.

If I'm at work all day and have an autonomous car, why couldn't I "hand the
virtual keys to Uber" and become an Uber "driver" despite the fact that I'm
sitting behind my desk.

Give me a cut of the fare and I'll bed happy - the thing could be driving
around all night too.

Clearly there are nasty issues to solve regarding giving strsngers unfettered
access to my car - who clears up the vomit and pays for the knifed seats etc -
but they are probably surmountable.

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wklauss
Because once self-driving cars are cheap enough -and they will be-, this model
won't make sense. There would to many cars competing for the few clients that
need rides at any given time. The money you'll make will probably amount to
nothing and won't cover the hassle.

But I don't think this will be an option. I think we all know cars are
extremely inefficient, but we fail to see the magnitude of that inefficiency.
They are outrageously, extremely, mind-bogglingly inefficient. To the point
that, once they start to become more efficient thanks to self-driving, owning
your own car will be extremely rare.

The thing with self-driving cars is that it really alters the whole economic
landscape of car transportation. You don't need two cars in your garage
because the same car can take your kids to school and you and your spouse to
work.

But keep that idea scaling. Your whole neighborhood could probably get around
with less that one self driving car per house. So you'll start seeing
neighborhood associations or apartment buildings pooling resources to buy 20
or 30 cars for the whole community to use.

Scale even further. The same could be said for a city. You could just have a
fleet of 1000 cars, paid and maintained by the local government with taxes,
that move people around with maximum efficiency.

It's not that Uber has a tough future ahead. All car companies that rely in
selling cars in volume will also face pressure. There will be a lot of
concentration, a lot of mergers and a lot of bankruptcies, because we are
going to a market that will be 1/10th the size of what it is now.

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TheCondor
Why wouldn't a family have three cars in the garage? One for you, one for you
spouse and the one for the kids to get to school or soccer practice or even
their friend's house to play after school? Sure it's "inefficient" but the
time efficiency of having a car ready to bring them home the instant you call
has a premium value to many. if you take the driving out of the equation, I
expect the average car becomes dramatically less expensive, performance is
purely there for human emotions. Lower the car price and we will simply buy
more

there are lots of places where people don't take public transportation now,
why is that going to change? So long as work schedules are similar and eating
times are similar it seems like there is a queue theory problem with your
community pool.

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wklauss
Real estate prices are one reason. The other is that your waiting time for a
shared self-driving car will be almost nothing (around 5 min?), specially in
suburban areas. Keep in mind that is very likely that your kids will go to
school on a self driving bus, in any case.

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frankc
I hear what your saying but can't you use the same logic with bathrooms? Sure,
we could all get by with 1 bathroom. Hell, we can get by with just communal
bathrooms. But it turns out it's nice to have the luxury of not sharing
things, even with your family. It's nice to be able to customize things the
way you want. I will buy the argument that people will give up personal car
ownership when I start to see people give up having personal bathrooms.

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PinguTS
Fun, that's what I tell since years.

That is the reason, why I believe its more companies like Car2Go have a better
position than Uber. (If that future of self-driving cars and transportation as
a service becomes true.)

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heisenbit
Yeah, posted similar arguments a couple times too. The keys are technology to
build the car, differentiators for the car, capital to own a fleet and ability
to service in the field. The app and customer relationship are not that
sticky. Think about it: Do you care whether you order from Uber or Lyft or do
you care whether it is a BMW 7 Series, a Ford F-150 or a Cadillac?

The money quote is here:

> But even if Uber can keep up in terms of autonomous vehicle technology—or
> find more willing partners in the established auto industry—there’s a much
> larger problem looming ahead.

> The companies that will profit from the transportation-as-a-service
> revolution will depend on an incredibly costly infrastructure—one that
> doesn’t yet exist. Someone has to buy and maintain all the autonomous
> vehicles, enough to replace all of the cars driven (and usually owned) by
> Uber and Lyft drivers, not to mention many of the cars driven by you, me and
> countless others, too.

> To date, Uber’s model has been built on it not owning vehicles. Owning an
> enormous fleet of them, which might be required to make transportation-as-a-
> service work, is in some ways antithetical to the business model that has
> given Uber a nearly $70 billion valuation, more than any other startup. That
> model depends on outsourcing vehicle ownership and maintenance to its
> drivers.

> Uber does own its prototype self-driving vehicles, but declined to comment
> on the extent to which its future would depend on owning vehicles.

> Auto manufacturers have a great deal of experience working with the complex
> web of dealers, financing companies and fleet managers—even car-rental
> agencies—that could potentially be repurposed to manage millions of self-
> driving vehicles.

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skdotdan
Tesla Network?

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bkkssnn
Took the words right out of my mouth, Elon is 3 steps ahed.

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PinguTS
So why do you think Daimler has developed, and now just replicates Car2Go?

Think about.

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bkkssnn
I think if Tesla pulls it off with the Tesla network and T5 they will have all
the advatages Uber has with none of the disadvantages. Meaning they wont own
"their" fleet of cars, it will just be all tesla owners renting out their
cars. This effectivly cuts out all middle men from the equation. Also they
will be early to market, the only competion i see is some other big car
manufacturer developing or buying T5 and make their own network, Ford network
or GM network or whatever, also cutting all the middle men. I.e the customers
own the cars and they themselves rent out the car to some larger network. This
also ultimately makes the T5 "revolution" inherently more democratic since one
private actor will have a hard time to compete with a big network of people
loosely connected by some framework. Which i think was Elons plan all along.

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skdotdan
Right.

By the way, would you mind explaining me what do you mean by "T5"? Excuse my
ignorance.

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bkkssnn
With T5 im just referring to level 5 Autonomous car, I just call it tier
5(T5). This means the car can drive it self where no human intervention is
required.

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skdotdan
Okay, thanks.

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uptown
Owning a car is expensive. But so is operating a fleet of autonomous vehicles,
so I expect the cost charged per ride will be non-negligible. Today Uber and
others are able to avoid the costs of ownership and maintenance and repairs
and cleaning (etc.) because all of those costs fall directly on the owner, but
if they own their own fleet, these costs are now their responsibility. So I
expect the cost per ride will need to increase.

For urban transport this model may work. Owning a car in a city imposes
additional costs not incurred in the suburbs. And taxis have proven pay per
ride is sustainable. Where I cannot yet see it working are suburbs. I think of
the frequency and range of some of the driving in the suburbs and try to
figure what the cost per those rides might be, and I can't see how the
economics work for either party. Car service companies will need to charge
enough to pay for the vehicles and maintenance, and the family carting kids to
three or four places in a day is going to balk at $180 in transport costs on a
random Saturday of activities.

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stult
You're dramatically overestimating the costs. Renting a car only costs $20-40
per day now. Far, far less than $180. It's not going to increase with
driverless cars. It may actually decrease because of reduced insurance and
wear and tear from better driving.

More generally, the cost of ownership per mile is only around 10 cents. So a
driverless car with a utilization of 85% and an average speed of 60mph (high
estimates) would need to charge $120 per day to break even. For 1200 miles of
driving and 20 hours of travel time, which is far more than a single driver
with a rented car would travel. That's $6 per hour. And gas accounts for 95%
of that, so if we go electric the costs are even lower.

With taxis, the overwhelming majority of the cost is the driver's wage. Which
is way more of an issue in rural areas where they aren't getting paid once
they drop the fare off. Without a driver to pay, low density demand is far
less of an issue because you may have to bear the cost of getting the car to
the next fare, but that's going to be a function of distance traveled rather
than time.

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illumin8
Your rental rates are accurate, but the cost of ownership is way more than
$0.10 per mile. For that to be true, you'd have to pay $20K for the average
car (the average is higher), drive it for 200,000 miles, and that doesn't
count maintenance, insurance, or gas. Realistic costs are far closer to the
$0.55 a mile that the IRS uses to calculate the mileage tax deduction.

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skdotdan
Why do Uber investors think that Uber will a) be able to develop all the
necessary technology for managing a fleet of self-driving cars before it
bankrupts and b) be the only one (or one of the few) that achieves a)?

Uber should have the potential to have a monopoly in self-driving technology
in order to justify its current valuation.

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RodoBobJon
The prevailing theory is that Uber currently controls the customer
relationship for ride-hailing, and that inertia will carry them forward.

I personally don't see it. Uber has _already_ begun being disintermediated.
For example, ride-sharing is already an option in Apple Maps on iOS where Uber
sits alongside Lyft and any other ride-hailing apps on your phone, price
comparison and all. You can also hail a ride with Siri. As a rider, why would
I care whether my ride is dispatched by Uber or Lyft? I only care about
availability and price. At some point in the future, I probably won't even
need to install a competitor's app on my phone; I'll ask Apple Maps or Siri to
get me a ride and it will dispatch a car from whichever service is faster
and/or cheaper.

Uber has a plausible route to winner-take-all dominance as long as ride-
hailing remains a two-sided market, where competitors have a chicken-and-egg
problem in recruiting drivers and riders. But self-driving changes the game.

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usrusr
> I only care about availability and price.

If Uber reached the critical mass of creating gridlock almost exclusively
consisting of (idling) Ubers, an idling competitor two blocks away would not
win the availability metric for your next ride. Unlikely to happen, except
maybe in a few particularly overrun city centers, but that's one way they
could do it. (Can't think of a different one, I don't believe that they will
win their bet)

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mattcantstop
I think Uber's proposed advantage here, the relationship with the driver, is
the easiest part of this equation to replace. After the recent Uber debacles I
finally switched to Lyft. The switch took me about 4 minutes and has been
absolutely painless.

If Apple, as an example, suddenly had "Get a ride" from Apple's own self-
driving cars in my Maps app, and it charged me through my already connected
Apple Pay, I would have no problem switching.

I think Apple and Google are best situated to take advantage of this market
change as they own the platform that makes the ordering of a ride happen. And
they can put their own service front-and-center.

Uber's advantage, existing (tenuous) relationships, is the easiest to replace.

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narrowrail
This entire discussion is an exercise in premature optimization. It will
probably take 20 years from the time we have level 5 autonomous cars before
most of this is even relevant. Manufacturers of traffic signals still get sued
to this day for liability in accidents. I'd rather see more effort in making
traffic signals more intelligent; I hate sitting at a signal with nobody
around at 6am.

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janesvilleseo
OT: if the consensus is that self driving will eliminate ownership then what
will people do with their garages? Will there be a market for converting them
into more useful space. Will houses be built without garages? Will we need
driveways? I know self driving will have a big impact on society. Never
thought about how it may impact suburbia.

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stupidcar
Are garages really used for storing cars much, now that they don't need as
much protection from bad weather? I don't know about the US, but in the UK
many (most?) people already keep their cars on the driveway, and use their
garage for other purposes. E.g. as a storage area, a workshop, or a utility
room.

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janesvilleseo
Good point. I'd say a good percentage actually use their garage for thei car.
Others just fill them up with stuff/junk.

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b0rsuk
OT: Has it ever occured to anyone that human-drived cars are the C of human
transport ?

Very many people die in communications accidents. Airplane travel may be safer
per unit of distance, but NOT for unit of time spent in a vehicle.

Human brains are not effective at 3D navigation. I think this is the real
reason we won't see flying cars: because it makes an already dangerous
activity an order of magnitude more dangerous. The only way I can imagine
flying cars working is with software-assisted flight. Software would need to
take over a big fraction or even entirety of the task.

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rco8786
I don't think it's that humans are bad at 3D navigation. It's likely that
they're bad at any navigation without brakes.

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fetbaffe
Starting to loath all headlines with 'could' in them

    
    
      * Flying cars could end Uber
      * Cyborgs could end Uber
      * Nuclear war could end Uber
      * Eating only eel could end Uber
      * Writing too much could end Uber

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neonbat
will _

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Shivetya
self driving cars will impact mass transit the most and probably all taxi
services so worrying about Uber is silly when the real impact will be taxi
services except in very rural areas. I would not doubt that once level 5
actually becomes a thing that regulation would require it for taxi services
and such.

of course buses will get automated but the impact of self driving cars on mass
transit will be the special needs vehicles will transform.

now I can imagine a world where self driving cars come with a chauffeur to
load/unload packages and assist those in need. probably going to be a decent
need there

