I've had chats with a lot of Uber drivers. Some of them use several apps. Competition would need to reward both drivers and customers better than Uber.
For instance, a loyalty scheme for customers (discount on every nth trip) which Uber doesn't do, and for drivers 10% cut of each journey instead of 20% Uber take from the drivers.
yep, tipping could work in some places. I doubt these companies need 20% of the fee to fund the infrastructure and make a decent profit too, so there will probably be some downward pressure on that cut as competition intensifies.
of course autonomous taxis will change the business model somewhat but we are still some way from that - not just the tech but the legislation.
Uber has to survive until they can get a self-driving fleet. The winning strategy in the short term is to choke off Uber's cash flow, so paying drivers more so they drive for you rather than Uber is the winning strategy at this point of the game.
Can someone explain the logic there? That's never made sense to me and yet gets repeated a lot.
Ride-hailing services are a saturated market with major network effects (the more drivers on a service, the faster they can get to you) and thus, expensive barriers to entry.
It just seems like it makes more business sense for Tesla to sell/license as many self-driving cars as they can to any and all services that want them, and concentrate on their core business, rather than branch out into an entirely new market and write a whole new app from scratch and market it.
> Ride-hailing services are a saturated market with major network effects
Not so much. Drivers frequently run Uber and Lyft simultaneously. There is no "stickiness".
> It just seems like it makes more business sense for Tesla to sell/license as many self-driving cars as they can to any and all services that want them, and concentrate on their core business, rather than branch out into an entirely new market and write a whole new app from scratch and market it.
> write a whole new app from scratch and market it.
I think its humorous this is thought of as expensive. How much does it cost to build an iOS/Android app and run the infrastructure to match riders to drivers? $3-5/million/year? Tesla has hundreds of millions of dollars of credit available to it. And you know, the cars receiving software updates constantly.
>Not so much. Drivers frequently run Uber and Lyft simultaneously. There is no "stickiness".
I meant from the perspective of users and providers, not drivers (which are irrelevant in the case of self-driving cars...). You have to get all these users to download another app when their existing one works fine. That's money that Tesla could be further investing in their core specialty rather.
>You'd think so, wouldn't you? But apparently that's the direction Elon is going
Yes, which is why I'm asking; the fact that someone is in fact doing it doesn't resolve this mystery.
>I think its humorous this is thought of as expensive. How much does it cost to build an iOS/Android app and run the infrastructure to match riders to drivers? $3-5/million/year? Tesla has hundreds of millions of dollars of credit available to it. And you know, the cars receiving software updates constantly.
Right, but they haven't trodden the path of scaling up a ride-hailing app and made the numerous optimizations that Uber/Lyft have made based on the unique problems of that domain.
> I meant from the perspective of users and providers, not drivers (which are irrelevant in the case of self-driving cars...). You have to get all these users to download another app when their existing one works fine. That's money that Tesla could be further investing in their core specialty rather.
That isn't what network effects are. That same argument applies to anyone competing against an incumbent.
What's harder, making another Uber or making a self-driving car?
Double-sided networks like Uber are hard to gain critical mass. Uber did it, which is extremely impressive, however, whoever comes up with a self-driving car will eliminate one side of that network, making it substantially easy to compete.
I personally don't see how Uber's infrastructure minus the driver network is that important.
They don't eliminate one side of the network but they do turn it into mostly a Capex problem, which is easier to solve, especially for cash rich companies like Google and Apple.
And Google and Apple can send a software update that puts their ride-request app on phones across the world. Both also have billions of cash on hand and could easily fund capital expenses with debt.
Given how Apple approaches everything, it's logical that they're going to create an end-to-end experience, meaning they make the tech, they make the cars, and they make the equivalent of Uber.
I'm not sure what Google's move is once they have commercially-viable self-driving tech. Would they license it to another automaker or group of automakers? Would their tech plug into whatever request app they make?
I think the strategy for Uber is to connect with a manufacturer like Tesla, who seem to be advancing competitively with Google and Apple on self-driving tech. Tesla has less access to cash and debt than Apple. Still, I see Uber's value being far less to Tesla than Tesla's value to Uber.
I bet you $1000 to a charity of your choice they (Tesla Motors, either itself or through a subsidiary) have a fully autonomous (level 4) vehicle in less than 3 years, and actively provides a ridesharing service with its vehicles.
"Level 4: The vehicle performs all safety-critical functions for the entire trip, with the driver not expected to control the vehicle at any time. As this vehicle would control all functions from start to stop, including all parking functions, it could include unoccupied cars."
I'll take that bet. Even if they produced a working prototype of this tomorrow I doubt the government would be able to pass the necessarily legislation in three years.
Sorry, I'm not really going to bet a thousand dollars on an internet comment. I have bills to pay. That's not say I don't believe what I said, just that I don't have $1000 to throw around to back it up.
"I bet you $1000" is, 98% of the time, not an actual offer to bet a thousand dollars with a person. The numbers are even higher when said person is a stranger you are talking to on an internet message board.
You are lucky to be able to consider such a thing seriously!
I don't really think it's a case of honesty, just a frequently used phrase. When my friend tells me he'll kill me if I drink the last beer I do not take it literally and call the police.
Now I'm curious :) Do you see regulatory hurdles as more pressing than technical hurdles? Because technical hurdles for self driving cars appear to be (mostly) solved.
I don't even believe laser scanners Google is using are required anymore:
Both. In the 2000's, I worked at a startup developing spectrum-sharing radio technology.[1] We ran into a range of problems similar to what I believe will hold up autonomous car development:
1) When you scale from individual autonomous devices to vast networks of them you run into emergent phenomena that you simply could not predict ahead of time.
2) You have to spend enormous engineering effort protecting incumbents. E.g. there has been a ton of work on figuring out how to protect wireless microphones used by churches and stadiums. They are intermittent and have a "dumb receiver" (that never transmits), making them very difficult to handle using a "listen before talk" approach. And that's for fricking church PAs. Imagine the push-back when your technological edge case runs over a kid.
3) You can't deploy commercially until you change the regulatory regime. That can take years to decades if you're asking for seismic shifts in policy.
I would predict another 5-10 years before the technology works correctly at scale, rather than under controlled conditions. Then maybe another 5-10 years after that for limited regulatory approval, and maybe 10-25 years for widespread regulatory approval. I don't expect to be able to catch a self-driving cab in New York or Chicago before 2040.
[1] The end goal was technologies that could obsolete fixed spectrum allocation by letting networks of cognitive radios sort out for themselves what frequencies to use. There are various narrower applications, such as technologies that can take advantage of TV "whitespaces."
Do you see regulatory hurdles as more pressing than technical hurdles?
Not yet.
Based on what I know of Google's efforts, I think your three-year horizon for Tesla is, well, optimistic. As many miles as Google has logged, they're not testing at highway speeds yet -- I don't think their driverless prototypes (as opposed to the modified Lexus SUVs) are even capable of highway speeds. Also, AFAIK, they're only testing cars in Mountain View and Austin, which means there's a lot of weather conditions -- and to some degree terrain -- that they haven't had to accommodate. The most recently-given figures they've supplied that I can find is that they expect to be able to commercialize their technology between 2017 and 2020 -- and they've been working on this project since 2009. Tesla'a engineering is good, to be sure, but I would be really surprised if they beat Google to market in this area.
Now, once somebody really does start offering these for sale to the general public (or just to taxi/rideshare companies or etc.), the answer to your question shifts from "not yet" to "yep."
> As many miles as Google has logged, they're not testing at highway speeds yet -- I don't think their driverless prototypes (as opposed to the modified Lexus SUVs) are even capable of highway speeds.
Tesla's autopilot functions at up to 90mph.
> I think your three-year horizon for Tesla is, well, optimistic.
"Four days later, Reese, Mastracci, and Roy piled into a Model S and took off. They covered 2,994 miles at an average speed of 51.8 mph, a figure that includes the time spent plugged into Supercharger stations along the way. They had autopilot mode engaged 96 percent of the time, Reese says, using it at speeds around 90 mph. It eased the burden on the team, a big deal when you’re in a car for 57 hours straight."
96 percent of the time, at speeds up to 90mph, across 2,994 miles
Speed is not the problem. Highways are going to be the first sections of self-driving roads. Because they are simple predictable environments, which requires less hardware, where accidents have high costs, liability issues are small, trips are long and where computers offers an advantage over the human mind in terms of endurance. This is something we will have in 3-5 years.
To tackle all the other problems to truly have a self-driving cars is going to take much longer. Not at least since there will be decreasing incentive to solve these much harder problems in a cost effective way.
I take that as a very strong piece of evidence that 96% of the time on a very long road trip is spent on roads with near-ideal conditions. It sounds like the trip was mostly on highways. US interstates are wide, straight, and nearly uniformly impeccably painted and signed.
4% of the time there's inclement weather, ambiguously signed construction, heavy traffic in snow that occludes the entirety of the road, cars stopped in their lane, detours into the lane normally dedicated to oncoming traffic, and all sorts of other low-frequency events that are much harder to solve than keeping a car moving forward on an interstate.
I'd argue that 96% autonomous driving time isn't even enough to say we're 50% of the way through the challenges of creating an autonomous vehicle. Think twice before accusing me of not understanding percentages.
(I clearly remember a video demonstrating one of the employees pulling on to the freeway and then giving the car control, I found the above while doing a quick search for that)
The second slide here says 300,000 freeway miles circa 2012:
I was about to jump on that bet too. Regardless of the technical hurdles, I would bet the regulatory hurdles alone are too big for 3 years. 5 year? Maybe not. 10 years? Hail no. But 3 years is a very short amount of time to get everything cleared up, especially with an election year coming up. My guess is that the interest groups who would oppose autonomous cars is a diverse enough coalition across the political spectrum that changing laws will not be super easy.
They also allow tips, unlike Uber. But I've heard from drivers that they don't get tips often, at least not in the Bay- too many passengers are used to Uber's no-tip system.
That's surprising -- most of my friends in the Bay are either firmly in the Uber camp or the Lyft camp; I'm surprised that Uber's no-tips would make much of an impact. I haven't used Uber in years; I didn't even know they didn't allow tips. I almost always tip $1 for Lyft drivers.
I used UberX a few weeks back and I'm sure I remember a setting somewhere where you could specify a % of the fare as a tip. I remember because it defaulted to 20% and I reduced it to 10% - yes, I'm a cheap bastard :)
This is for markets with UberT (Taxi through Uber). They automatically add your set percentage to that fare, but only for that version of Uber. There are no added tips on UberX.
That is certainly the more moral thing to do. But if it is really the most long-term profitable business strategy, then do we suppose that Uber is not only greedy, but imprudent? And that these two mistakes are canceling one another out?
I admit that such a situation is possible, but I'm skeptical.
If they can lobby their way out of being illegal company to being somehow legal, they can use this power against competition. Remember what they did to Lyft year ago using some blackhat booking scheme? Imagine what they will do once they have lobbying power.
It's funny you say that, because this is exactly how Uber itself expands (or used to at least). Lyft does indeed need to offer a promotion to get people to use it, it's almost always like that when cutting into an existing, (somewhat) established market. When Uber started, they had to do the same thing to convince people to use Uber, not only on the customer facing side, but on the driver side too.
Uber still has promotions in new markets, at least as of late 2014. I registered about a year ago when they showed up in New Haven and periodically get emails reminding me that I have a $20 credit for my first ride.
When Lyft launched in NYC about a year ago, they handed me 15 free rides of $25 or less. For the last few weeks, they've been offering 50% off all Lyft and Lyft Line rides M-F.
From what I've seen, Uber offers $25 or so against a single ride when you sign up, not much more.
Lyft does much more aggressive deals though. When I moved to San Diego ~ 3 months back, they gave me 1month of half price rides. Considering I spend > $1000 per month on rides, that was over $500 of savings.
We'll learn a lot more as we get closer to the IPO (estimated) in Q4 '16 or Q1 '17. As an investor and rideshare driver (Uber and Lyft), I'm skeptical.
If more and more intermediates are allowed to enter this meta-market, it should cause all of the intermediates to commodify. Drivers already run multiple ride-sharing apps to get the best price. This deal means that now all of the apps have made it trivial for riders to do the same. So what value are the intermediates (lyft, didi, ect) creating/capturing?
Uber has shown that this is plenty of money to be made. Let the drivers get it. Choke off Uber's resources.