This makes perfect sense, and if I had money to invest in this market, I would. Self-driving cars coupled with such an infrastructure means a very profitable business in the not-too-distant future.
The highest cost for taxis is not the cars, nor the gas, but the drivers. Get rid of them, and it's all gravy.
Something like this is most certainly the "mass" transit of the future. It would be lower cost, more convenient, and would actually pollute less than buses during non-peak times.
It's more than that. Google is interested in the movement of goods and services and how they can make those transactions more efficient. Google can umbrella commerce in general and just take a small google tax. It's like amazon's end game, except a lot more lightweight and uninvested.
Not if you think of both people, their locations, their movements and their desires as information.
However, with Uber, as far as I know, all drivers own their own vehicles. They just subcontract to Uber.
Further, there is a massive black market for drugs and prostitution in every city and every Black Limo market, SF Uber being no exception. I wonder where this will wind up....
Yep, it's immediately what I thought of when we saw the Google Glass Field trip app released earlier this week. Google could offer an invaluable service to businesses and consumers alike if they could orchestrate the relationship between the two.
No one drives a self-driving car. If I ride in one that I own, are you still going to call it a taxi? If I am at work and call the one that I own to drive me on a short door-to-door trip to grab lunch, will you call it a taxi then? What if I share ownership with a neighbor? How about 10,000 neighbors?
I understand that the establishment will always attempt to maintain control, but I think the situation is too different and complicated for the taxi establishment to overcome. I think that Google Ventures agrees.
Your argument makes no sense. You said that "Uber with self-driving cars" should be considered a car rental service, not a taxi service, so why bring up examples like "If I ride in one that I own." Uber is clearly a taxi service. It clearly does taxi service like things, and that's true whether the cars are driven by people or by machine (and from the perspective of the customer, the distinction is mostly irrelevant).
Whether a taxi service with self-driving cars should be subject to taxi regulations is a separate issue. Some of the concerns that led to taxi regulations are no longer relevant to a self-driving taxi (e.g. people picking up tourists and robbing them). Some of the concerns that led to taxi regulations are still relevant to self-driving taxis (e.g. companies focusing coverage on high-demand areas and ignoring poorer areas).
It makes no sense today, but it will make sense in 5 ~ 10 years. I bring up individual ownership of self driving cars because that is the environment in which the debate will happen, not the current one in which no self-driving cars exist. What does a "taxi" service look like when Hertz can deliver a self-driving car to my door? How is it any different from what we call a taxi today? Hence, either every self-driving car will be called a "taxi", or none of them will. Or, there needs to be a clearer differentiator between them.
Whether the current service that Uber provides is a taxi or not is irrelevant to the future debate involving cars with no drivers, unless those cars have a fare printed on the side and a light on the roof. It's likely that the taxi lobby will push for NYC to charge every car in the city a non-linear congestion fee unless you have a medallion.
It's almost self evident. Does a car cost > 30k a year? Does gas? Just like software engineering, the biggest cost in the taxi game is labour.
Edit: Maybe I goofed, mattmcknight accurately points out that in many cities the taxi medallion is the most expensive part of the taxi equation. I'm not intimately familiar with Uber; do drivers still have to obtain medallions in their respective cities?
On the subject of medallions, last I heard that was a point of contention. Uber has been operating without them, and taxi companies don't like that. You play by the rules and pay a huge lump sum to be allowed to operate, and then some guy comes along and undercuts you because HE doesn't have to pay that lump sum? You wouldn't like that either.
Exactly. Uber is following the letter of the law, but the argument can be made (not unconvincingly I might add) that they really aren't following the spirit.
Note I am not criticizing Uber, as they clearly are obeying the law! But to some it looks like they are skirting it, benefiting from a loophole.
Many of the Uber cars are also luxury towncars, for which fuel, upkeep and maintenance can be a large cost. Especially if you consider how much they are driven in a given year.
Gas is ~3.50/gal. Assuming the vehicles get a horrendous 10 miles/gallon (for a fuel cost of $0.35/mile), and the drivers are paid minimum wage (7.25 + employer costs = ~8.00), the cars would have to be driven 22.8 miles in a hour before fuel costs exceed labor costs.
Of course, the vehicles are probably getting twice the MPG, and the drivers are getting paid more, so the number of miles is probably much higher.
No, it's just conjecture, assuming some things. Have you ever taken a road trip? Was the cost of gas between fill-ups more than you were paid per day for your first job?
Assuming you're not driving a Mercedes, is your monthly car payment + insurance more than your monthly income?
The reason I asked it because taxis have very different usage pattern than regular cars -- there might be extra operating costs (like extra gas, oil change, & service costs due to the extra range, and probably taxi operating license fee) that I'm not aware of which might weaken the analogy with the average car a bit.
Yeah, I'd not calculated fees or licensing. But other than that I'd still expect the costs of employment to be the highest, by a very large margin. Even if you replaced the entire car yearly, salary is still a higher cost.
Even before self driving cars, google might be able to offer a shared cab/minivan services that are pretty competitive with cars, if they have enough demand.
Some relevant research is in [1], which i think is implemented in the new finish public transportation service kutsuplus.fi.
And such a service could be great help in rapid transition to self driving cars - capital demands will be smaller, and profitability higher, and much faster to reach critical mass/lockout.
Uber makes absurd amounts of money. I've had many conversations with drivers and they claim to be pulling in $35-$45 per hour after uber's 30% cut. I've talked to drivers who have quit their full time jobs and love it. Some have said that because the service is so convenient that people have started using it as a walking replacement, often opting to catch a cab for 5 blocks. Lastly, many companies have enterprise uber accounts and will happily pay their employee's $200 cab rides to the airport or even 45 minute drive home.
I stopped using Uber in favour of black cabs (using Hailo) in London. For airport trips local cab firms are 1/4-1/3 of the price with a more reliable fulfilment time. (The app basically lies about how timely a driver can be, it says 5 minutes but when you hit book it says 15-20 minutes for me rather often).
The pricing is far too high. Only on one occasion out of a dozen did i get a luxury vehicle.
FYI Uber a base specification Mercedes E class is not a luxury vehicle. They are also usually not particularly clean and often with not a particularly competent driver.
I was having a bad day and needed to go from office->home->office->airport. I had to wait 40 minutes for a car (luckily i had thought of this in advance so that didn't bother me). The driver did the first trip then begged me to let him complete the fare there as he didn't want to go all the way to the airport. So I had to get out and book a new journey from scratch.
Perception of Mercedes is different in Europe than in the US. In Zurich, for example, Mercedes is probably the most common brand among normal taxis - some of them even S-classes with electronically adjustable black leather seats. I think Uber will have a hard time expanding into cities where the normal taxis already have a high standard.
Exactly, the cab company my employer uses here in Edinburgh is great - they have an excellent IVR system (when I phone their number, it knows who I am and asks if I want a taxi from my home address) or an iPhone app.
Cabs are always clean and drivers very polite - I've never had a problem with them for years and I use them for all my personal taxi usage as well.
I'm not sure what advantage Uber would have in this market.
Sounds like Uber is mostly capitalizing on the intense regulatory capture in the US taxi industry that allows cab companies to be horribly complacent about the customer experience. In places where cab companies are already competitive, Uber doesn't look so shiny.
Problems I've noticed with Uber time estimates in the US, add traffic and it really can slow things down.
-Car just passed a turn when I call it.
-Car looks close, but really isn't. For example, its on a highway and you are a block over.
-Misread on the direction the car is traveling, usually from signal interference.
Predictions, I don't know anyone at the company so this is what I expect they are doing. If they don't, a competitor will:
-Within 5 years we will start having driverless Ubers.
-Service can scale and they plan on it, they have taken the start at the top of market and work down.
The thing that has kept me thinking is, by the time cars are driverless, will taxi cab medallions (in NYC and Hong Kong at least) go up in price because you don't need a driver, or will they be worthless?
It looks like Uber does not scale well. We see this all the time when employees are involved. The culture loses it's magic as the biz gets larger and most are just there for the paycheck.
With a premium business like Uber that will be a big problem. Plus those cabs aren't gonna stay shiny and new forever.
I feel really cheap promoting this sort of stuff but try anycabs.co.uk - it's a bidding system and so prices are consistently quite low. Also, I've also gotten decent cars, never had any trouble with people not showing up (even when I've gone for the cheapest bid, expecting crap cars). I've been in brand new Priuses, new BMWs and decent cars altogether (different companies and YMMV obviously but it's cheap). I've also had drivers really impress me by not letting a fully closed-down M25 slow down my transfer to the airport.
As a price point, I've always managed to go Docklands to Luton for under £50.
I live in Montreal, so I"ve never been able to use Uber. What makes it different from a cab?
In Montreal, cab to the airport costs $50. Cab arrives in about 1-2 minutes most locations, and drives you there as fast as taxis go.
I don't doubt that Uber's great - this is a serious question. How much of a premium do people pay, and what are the main benefits in cities that already have developed taxi networks?
The question should be: for how much longer will people be able to pay a premium?
Yes, there is a market for luxury transport, but is this really a high growth market? How many more young and overpaid software engineers can there be?
Look at the real rate of unemployment, the rise of the part-time labor force, record usage of food stamps, record high student debt, national debt, etc.
Lyft and the kool-aiders claim it's a beautiful new sharing economy, but in truth it's a shitty economy, where people are willing to drive a stranger across the city for 10 bucks, or task-rabbit themselves for a fiver.
My opinion is that there simply aren't enough wealthy folk out there to justify the valuation of these companies.
I think that is why they are hedging their bets by offering yellow taxi service and UberX.
Classic strategy... conquer the premium market first (BMW 3,5 and 7 series) then start going more mainstream (1-Series BMW) once the brand is established and is viewed as prestigious.
It's really hard to get a cab in San Francisco and not it's not easy in New York either.
Contrast with Toronto, where it's a no brainer on major streets (and we have Hailo here, which works pretty darn well but uses regular cabs), or in Montreal where I've had cab drivers almost get into accidents fighting over who saw me first.
That makes a lot of sense. I almost missed a train in NYC due to not being able to hail a cab.
In a lot of smaller Canadian cities they take a while to arrive. But I have had ZERO bad experiences in Montreal and Toronto. The system works pretty well.
I think there are two major benefits: first is that you don't have to call or hail a cab. People don't like talking on the phone, so being able to pull up an app and press a button and have a cab pull up in less than five minutes is pretty awesome.
Second, the cars are much nicer. Fairly new black cars and large SUV's vs smelly Ford Crown Vic's.
Also all payment happens on the backend so you never exchange any cards or cash. I expense Uber rides all the time and believe that enterprise sales might end up being one of their largest markets.
In many US cities, you can get UberX for about the price of a cab, Uber about 1.25-1.5 that. However, when you call a cab, it often takes 5-20 minutes, you have no idea who is picking you up, and often times they wont even show up if you aren't at a hotel. Uber you know exactly how long and who will be picking you up, and you can track them.
I live in downtown Atlanta. Cabs are simply horrible here. I don't think I've ever called a cab that's arrived in under 30 minutes. Several times a passing cab has stopped, flat out lied and claim to be my driver, only for me to 5 minutes later get an angry cabbie calling me asking where I am. More than once this has ended up with the driver of the taxi I was in "asking" for my phone and engaging with a shouting match with the other taxi driver on my phone.
I've had cabs refuse to take me to my apartment building, saying they would only go to hotels. Others stating up front 2-3X what the meter rate would be, which of course I refuse. I've had them drive in circles, "miss" the exit to stretch out trip, and not a one seems to know where anything other than major hotels and the airport are in the city, or have GPS. Only half the time will they bother to turn the meter on. Very few will take credit cards without a fight.
Those are just some of my first hand experiences, everyone I know that uses cabs frequently in ATL has the same and/or worse stories. Cabs here basically seem to only want to ferry out of towners to and fro the airport to hotels downtown. Unsurprisingly, Uber has been a huge hit in Atlanta. You can actually get a car in 5 minutes or less some times, that's unheard of.
Mostly their logistical advancements. You can rate drivers, you can ask for a driver in advance, you can track the drivers location. They actively plot what parts of town have high traffic, and at what times. This in general leads to a significantly improved experience over cabs, or other drivers. They seem to be always there when you want them, the drivers are always nice and very knowledgeable, etc..
I was in Montreal for 4 years before moving to SF so maybe I can help a little. I've also been using uber from the moment they started and have used it in multiple cities.
Apart from the basic benefit of not having to get your wallet out, I'd say it's the option of choosing between different type of rides that I like the most. In SF via uber we can get taxis, uberx (basically Lyft, some drivers do both), black cars, and SUVs.
In Montreal I don't remember ever getting a black car, but I was student at ÉTS so maybe that's a moot point :)
For your last question, SF has a developed taxi network but it's really bad. Montréal in that regard is much better, but maybe when leaving the bar at 3AM you'd rather get a black car to take you home rather than a taxi from Hochelag, and uber would make that really easy for you.
It's true that Montreal payment is annoying. Many don't take credit cards. I know how to work the system now, but it took a bit of getting used to. Would be much more awkward for 3 AM cabs.
Uber is 15% cheaper than cabs in the market's their in. So you get your phone charged, a bottle of water, a nicer car, a lower price, no cards/cash or tips and you only wait a couple of minutes. Regardless of your location.
It also stops discrimination of location or profile (They can't say they don't go to X place or not pick you up).
What is your source for the 15% number? In SF, UberX costs the same as taxis per mile, has no tip but a higher minimum, and surges regularly to 1.75x or more every time there is high demand, such as on weekends
Uber drivers still discriminate on location. When I wanted an SUV near Golden Gate Park, the first driver assigned to me cancelled the trip, and the second phoned me to verbally confirm before coming that far.
I live a block from GGP and have never had this happen. (I've taken Uber a couple hundred times.)
I'm not doubting your anecdote, just adding my own. I have definitely had a handful of disappointing Uber experiences; however, 90%+ have been fantastic.
"Given the scale of the cash injection, the company might not have to raise another series round before going public, though a bridge round isn’t inconceivable."
Why does a company need to raise so-much-money before going public? Isn't the whole point of "going public" to raise money?
I'd say that the point of "going public" is to provide liquidity to existing shareholders (e.g. founders, employees, outside investors). There are other ways to raise money, if that's all you want.
Sorry, I don't know anything about finance/business. What you say makes some sense to me, that going public lets initial investors cash out, if they so wish.
But I'm still confused, why not sell public shares from the get-go. Is it that it's easier to make your case (for investment) to a VC than it is to Joe public?
Its the bane of quarterly capitalism - once public, management focus is diverted to managing earnings and increased amount of transparency needs to be provided for the company's internal operations.
Companies would prefer to stay private (and away from the limelight) while they're still figuring out product/market fit etc
The biggest reason for not going public is because you'll get a low valuation. The public markets aren't much for venture investing.
If you don't want to dilute the hell out of existing shareholders, you'll want a high IPO price. You get that by moving the company as far forward on venture cash as you can.
If you take a look at the biotech industry, IPOing too early can result in not raising enough for your cash needs, so you offer more shares, diluting your existing stockholders.
> The public markets aren't much for venture investing.
The public markets definitely are for venture investing that was their origin and still is a main function today.
However it is not rare for founders and early investors to cash out during or shortly after an IPO, typically after a hold-back period called a lock-in.
In my opinion this is a red flag, it shows that founders and early investors would rather sell at the current price than stay in, and they typically have a bit more information (insider trading laws notwithstanding) than the general public.
The stock market is an excellent place for fools and their money to be parted, think of it as a giant casino where the house controls the games and the information available, the SEC controls some of the rules and the public is (usually) clueless.
I wouldn't say founders selling is a red flag. Often the overwhelming majority of their net worth (plus a decent chunk of their future professional earnings) is tied up in their company. At some point they need diversification far more than they need to maximize returns on company stock.
Early investors are another matter, of course. They usually have other ways of diversifying so that's not a plausible motive for sales in most cases.
If I had 10 million dollars worth of stock in my company and was otherwise pretty much poor, you'd see me selling a good 50% regardless of how confident I am in the company.
When people float companies they built and worked at for a long time with little tangible reward it is not unreasonable for them to want to take their money and actually enjoy it.
The public markets definitely are for venture investing that was their origin and still is a main function today.
I guess it all depends on what you call venture investing. I don't think that Sergey and Brin could have IPOed 6 months after founding Google - the public would have found the idea of investing absurd. So instead they went to VCs who can actually realize value in a "idea" and are willing to invest at a reasonable valuation.
Raise enough VC money and you can advance the company forward enough so that the general public see value in your company (usually revenue). At that point you can IPO and actually get a decent valuation.
Sarbanes-Oxley made it much more complicated to sell to public investors than to private ones. You pretty much have to hire staff whose only job is to ensure being compliant.
Public companies always had pretty strict reporting requirements leading to substantial overhead. If you take the public's money they have a right to be informed and to a minimum standard of corporate structure and governance.
Sarbanes-Oxley was instituted in the wake of the Enron and Worldcom (and others beside) scandals (which led to the demise of accounting giant Arthur-Andersen, which - surprisingly - survived in some form because the verdict against them from the Enron debacle was eventually overturned by the supreme court) which severely undermined the public confidence in Wall Street.
As a result the already substantial reporting requirements for public companies were ratcheted up several notches further increasing the overhead. So yes, Sarbanes-Oxley made it more expensive to be listed on the stock market and therefore to be trade publicly but the difference was always there, also before SOX.
One reason is overhead. Being a publicly traded company involves lots of legal filings and paperwork ($$$). Typically, you want to stay private for as long as you can. For example, Facebook only went public when they were legally obligated to because they had reached the limit on private shareholders. (I'm not saying that was the only reason, but it was a factor in the timing)
Going public requires a vast investment in accounting and lawyering, before you can think of how to make your shares seem like a deal. There's a whole new set of laws that suddenly apply when a company is about to go public.
Going public involves giving up a lot more control, since private investments of qualified investors are basically a freely negotiable contract, while offering shares to the public is legally standardized. For example, once public there is very little you can do against some troublemaker acquiring a significant position in your company via the open market and then causing endless trouble via legally required minority shareholder rights...
> I'd say that the point of 'going public' is to provide liquidity to existing shareholders (e.g. founders, employees, outside investors). There are other ways to raise money, if that's all you want.
Actually, the point of an IPO is to raise money, from the public markets. It's an Initial Public Offering, and the company can raise more at a later date by issuing more shares. The liquidity wouldn't exist if people didn't want those shares.
The IPO just happens to be a convenient time for current shareholders to sell their stake (as part of the offering) but even then, there are rules about how they can do that (lock-in periods, etc)
> Isn't the whole point of "going public" to raise money?
It used to be. Regulations introduced in the past decade have made it very expensive to be a public company - there's a lot of accounting and legal overhead. These days it's easier to raise large sums of money privately and only IPO when those investors want to cash out.
Wouldn't the logic instead be that when they wanted to raise money again that it would be at an IPO-level. Not that this round is necessarily driving them towards an IPO, except in the sense that it's leading them to be big enough for one.
Why does a company need to raise so-much-money before going public?
To spend it on a drastically raising revenue before the IPO: "...Our revenue grew by 785% last year so buy shares of our $xx billion company..."
*Isn't the whole point of "going public" to raise money?"
Nope, many times (if not most) it's to get the money back and then some for the early investors.
For those who find this new baffling: Uber operates in the following cities:
1 AMSTERDAM
2 ATLANTA
3 BALTIMORE
4 BERLIN
5 BOSTON
6 CHICAGO
7 DALLAS
8 DENVER
9 DETROIT
10 HAMPTONS
11 HONOLULU
12 INDIANAPOLIS
13 JOHANNESBURG
14 LONDON
15 LOS ANGELES
16 LYON
17 MELBOURNE
18 MEXICO CITY
19 MILAN
20 MINNEAPOLIS
21 MUNICH
22 NEW YORK CITY
23 ORANGE COUNTY
24 PARIS
25 PHILADELPHIA
26 PHOENIX
27 PROVIDENCE
28 ROME
29 SACRAMENTO
30 SAN DIEGO
31 SAN FRANCISCO
32 SEATTLE
33 SEOUL
34 SHANGHAI
35 SINGAPORE
36 STOCKHOLM
37 SYDNEY
38 TAIPEI
39 TORONTO
40 WASHINGTON D.C.
41 ZURICH
> "The $258 million is a 86% chunk of Google Ventures’ $300 million dollar a year fund, and its unclear as to whether the firm will continue to make such sizable investments."
So a towncar hire service, with an app, is worth over $3bn ? Really?!
Maybe there's one or two other metropolitan cities in the US where the taxi service isn't up to scratch, but where is the growth going to come from?
I doubt whether regulators and taxi unions in London, Tokyo or Hong Kong would sit idly by when some Silicon Valley kool-aid types come knocking.
People spend $10B on taxis per year in the United States alone. Smartphone adoption is going to reach 100%. I think if you put those two together, you really can't pigeonhole this type of service as "just another Silicon Valley app."
Combine it with Google's autonomous vehicle technology, and you can begin to envisage a future where the idea of owning your own car with ~5% utilization is viewed as ridiculous, or at least an unnecessary luxury.
That may be true, but we're at least a few years away from Google's autonomous vehicles being on the road, much less mass adoption. Even longer for vehicle ownership patterns in the US to change dramatically enough that an autonomous-car-hire service will eat the world.
It may happen, but there is such an enormous gap of time between then and now that I wouldn't exactly be picking winners just yet.
They might now be at the point where they have to pick a winner to start integrating. Their engineers have already been driving these things around for years. They probably already have a v1.0 release date in mind.
Uber isn't really a tech company, in the same way Amazon isn't really a tech company. The Secret Sauce(tm) behind Uber is logistics - in managing a highly fluid workforce, dispatching, etc.
Not much of which transfers into this post-human-driver world. I like Uber, but I don't think Uber being Uber really confers a large advantage over new entrants when the autonomous cars become reality.
It would seem to me that, when the time comes, any number of companies run by reasonably talented people with capital backing can start a car service. Uber's edge applies to their human-driver business.
Uber has the strongest brand. Uber's job is probably to build trust, push a convenience and affordability message.
If Google want to hit the ground running with a robot taxi service, they need Uber to be growing into something that my parents might use in parallel with the finishing touches being put on their AI cars.
Presumably by 5% utilization you mean by time. But the main depreciation factor on owning your car, aside from driving off the lot, is miles driven. If your car were driven 50% of the time with the kind of street/highway blend of mileage typical of a taxi, it wouldn't last nearly as long and your insurance and maintenance costs would be far higher.
Even when taxis are readily available I still prefer Uber. UberX is cheaper than a cab for many thing and it's much less hassle. I get in, the driver drives, then I get out... no fumbling with cash or swiping cards, signing things, and worrying about tips. In San Francisco I can even get a yellow taxi cab via Uber.
Is it worth $3B? I don't know... but it's certainly not as insane as some other valley companies.
Maybe they are therefore taking this to markets where the taxi business is more open to competition and not so tightly regulated.
I see great opportunities here as they are not limited to traditional taxi services. Once you have the infrastructure in place, you can for example start doing something that is between traditional taxi and tradinaional public transportation (in Finland there are trials running for this kind of system[1]). And once you have self driving cars, it would be interesting to evolve into car sharing scheme style of things [2], where can summon a car to your door with smart phone app.
That is some seriously high valuation given Uber's current (and even projected) numbers. But I understand what Google is trying to do.
I would agree that the self driving car business will take a lot longer than we think even in places like Silicon Valley. Still it is a plausible future although I believe people will still like taking taxis.
Disclaimer: I will be working for Hailo soon, the London start-up which is Uber's competitor. I believe both companies have their strengths and tackle different bands of the same market.
That is the beauty of services that are easy to sell. Everything is fairly clear, it is "just" a matter of execution at scale - i know i am oversimplifying the execution bit, but most startups have trouble figuring out the product-market fit, and even if they do, often have markets that are small.
I guess this has to do with Google self-driving cars. Maybe they are envisaging to replace taxi drivers in the future; and having a seat in Uber will definitively help them.
A lot of people are commenting about Uber + self-driving cars. What's the point of Uber if there are self-driving cars? Doesn't the existence of fully automated, driverless cars kill the value of Uber's driver network while equaling or surpassing Uber's no-hassle experience?
I think what I'm saying is: if Google actually created a fleet of driverless cars, would anyone still use Uber?
I definitely get the appeal and the value of that kind of future. It just feels like "driverless cars + simple Google-made reservation app" would send Uber's value down to zero. So if driverless fleets of cars are the future that Google is aiming for, then why invest in Uber? What does Uber currently have that would still be valuable in that future?
If you add the exclusive technology and you cut out the people, profits go through the roof. Do you think Uber wants to keep paying out 70% of each ride to a driver? They'd rather buy more expensive cars (servers) and have less humans in the mix over time. Humans take things like vacations and make the wrong decisions at a non-miniscule rate.
Probably the operational expertise in efficiently getting cars to pick up and drop off people at arbitrary points throughout a city. They're building that expertise right now with human drivers.
I'm referring to logistics. I have 3 cars available and a set of 5 passengers, their coordinates, and their destination coordinates. How do I efficiently deliver these 5 passengers that minimizes their wait time and travel distance?
Please explain how it makes a difference whether humans are operating the vehicles or whether they are self driving. In either case a larger network is making the pickup, dropoff and navigation decisions, not the driver.
I humbly propose that if you have perfect agents, picking up 5 people with 3 cars is an incredibly simple problem.
It's only difficult because Uber has to deal with humans - will their cell phone be charged? Will they hear the notification on their phones? What if they forgot to indicate that they've taken the rest of the day off? What if they claim to be available but are actually in the restroom at a fast food restaurant? It's supposed to be a 6 minute drive but what if they make a wrong turn? What if they glance quickly at the map of where they're supposed to go but saw it wrong, then muted the turn-by-turn so they could blast some daft punk? Working with human agents is hard.
If you have always-online self-driving cars, then you've already done the hard part. Directing them where to go is trivial.
I'm only using 5 people with 3 cars as an example. In reality it's hundreds upon hundreds of people and proportionally fewer cars. I understand there are challenges with dealing with humans that will disappear when we switch to robots, but I can't see the API changing very much. The concept of a vehicle network, customers, app, doing clever things to anticipate traffic and customer desires on certain days, all of these things take (I would imagine) years to understand and optimize.
Your claim that operating such a network with humans versus robots, on a logistical (API) level, have "almost zero in common" is rather brash.
Also, there will be a long lag time from when driverless cars are introduced into the car-sharing market to the time that everyone is comfortable using them and there are enough to saturate the market. In the meantime, you'll be able to choose between the different options via Uber.
Regulation is the biggest obstacle with Uber. The Taxi services have the city regulators in their pockets. Google, with their influence and money, may help solve Uber's biggest issue.
The federal FTC has also indicated it considers some of the state/local transport regulatory regimes anti-competitive, though it's not clear they have any legal authority to interfere with local determination.
Live in New York, think Uber is both more expensive and less convenient than just hailing a cab and I never use it. They seem to want to skim money from cabbies. I was also particularly appalled by their jacking up their prices during Hurricane Sandy. Their one killer feature - being able to see your car's arrival status on your phone, will be a commodity soon enough. Company won't exist in 5 years.
Love Uber. After using it for over a year, just had my first negative experience this past weekend in SF when the UberX driver had no clue how to get from SOMA to Ocean Beach. I left negative feedback and in a few hours got a response from one of their customer experience folks apologizing for the poor service and refunding my money for the trip. Service like that is why I'll always choose Uber over alternatives like Lyft, Sidecar, etc.
I can't help but wonder if it might have been wise for them to wait until they had widespread approval and adoption of self-driving cars. Completely disrupting mass transit will threaten a very large number of people's bottom lines, and many of those people have the ability to make things difficult for Google. Not least among these are auto manufacturers.
I know this comment is a couple of days old, but neither Uber nor self-driving cars in general will come close to completely disrupting mass transit. It might disrupt suburbia, where you get a bus every 30 minutes with 10 people on it - and transit agencies will probably be delighted to no longer have to offer this non-profitable service. It will do nothing to high-capacity transit that moves tens or hundreds of thousands of people a day - not only because of economies of scale but also because there's no road space for that many cars, self-driving or not.
Even so, I wonder if they might do better not to draw attention to the disaster that "easy car sharing (or similar concepts)" + "self-driving car" could be for car sales. Maybe I'm underestimating car companies in assuming that the haven't already anticipated this (although in that case, why aren't we seeing resistance), or maybe Google holds them in even lower esteem.
My guess is that the car companies haven't figured this out. It takes two steps of reasoning: 1. Figuring out that self-driving cars are practical in the medium term and 2. Figuring out that widespread availability of self-driving cars means that people might not want to own their own.
Here's hoping that they, like many others before them, flinch away from the mental pain of noticing that their business model is about to crumble until it's too late.
So, you do all realize that this was an investment (of less than 10%) and not an acquisition right? Everyone here is talking about how this plays right into Google's plans - no. With their stake, Google does not have enough leverage to direct what direction Uber should be moving in.
You know what, Uber is awesome. Congrats to those guys and gals.
I think Uber will evolve to become a service that even regular people can use, not just a speciality service for the relatively wealthy tech community (though it is necessary to start out as such; ala Tesla). I also think that taxis aren't the only thing that it will offer in the future. There is a wealth of potential for what they can do. They sometimes do fun one-off Ubers like Helecopters or Ice Cream Trucks which don't quite capture this potential but shows us that they realize that there's much more to experiment with and that they're not afraid to experiment.
Imagine when we have self driving vehicles (which, incidentally Google is helping develop).
I'd say that among people who take cabs, not necessarily wealthy, Uber is growing fantastically in some markets. Here in DC - almost everyone I know prefers and uses Uber now.
"DCTC passed a new set of regulations which bans mid-sized, fuel-efficient vehicles from being hired, as well as places color restrictions on those cars."
UberX is under attack in DC. The Limo/livery (black car and SUVs) businesses is now well protected by DC law and the definitions passed earlier this year. The DCTC rules will classify the UberX hybrid vehicles as Sedans and subject to the new rules. However, Uber has secured enough allies in the DC Council, including the DC Transportation CMTE Chair.
I've watched this fight play out a few times now, and I think the worst case scenario is no UberX through the end of 2013 prior to the next set of DCTC rule-making or council intervention. Uber rightly gins everyone up in DC about these issues, but the truth is they've done a great job in this market attracting the right allies and have been consistently winning their battles.
It would be awesome if they next look at Lit Motors or a similar safe 1-2 person pod. Lit Motors + Über + Self-driving cars is total win. Once you get rid of the driver all you really need are 1-2 seats for most black car service and taxi rides
This is interesting because if we think, 100 years from now, on demand transportation could be the most efficient way to go. Now Lyft, Uber's biggest threat, has been winning market share by being the ride for the common man and focusing on community. If that is Lyft's biggest strength, what happens to Lyft when self driving taxis are the most obvious solution to transportation.
The current business models of transportation startups like Uber, Lyft, Sidecar and Car2Go are merely a stepping stone to something much greater. It's only a matter of time before self-driving car technology is developed enough to be deployed widely. It seems clear to me that Google's investment in Uber is their way to guarantee access to a large fleet of vehicles and an established brand. The next 10-15 years are going to be very interesting :)
Anyone else see Google lining up Uber to get bought, so that they can consolidate Uber with their self-driving car to provide an on-demand taxi service?
This is an incredible move on Google's part. Uber can be seen as the physical arm of Google in meatspace; imagine having your flight information come up in Google Now with a button to summon an Uber car.
I look into the future and I primarily see "Google".
I've seen alternate stories about GV which seem to want to have it both ways – some that imply an ability for GV to bring in Google staff/expertise to help investments, and others vaguely implying a more strict separation.
...touts "Uparallelled Access to Google", and supposedly GV won its share in Uber's round with the help of direct lobbying from Larry Page.
So GV may be ostensibly empowered to seek return without regard to Google's other objectives... but it doesn't appear there's a "Chinese Wall". If theoretically the GV partners wanted to do something Larry Page absolutely didn't want, I'm not sure I'd bet on the GV partners having their way.
> “If a company comes in the door and it looks like something important for Google to acquire,” says Maris, “we will defer to Google’s corporate development department to take a look.”
A big piece of google's continued growth is going to be in mobile commerce. Take offers, maps, search and self-driving cars and put them into an amalgamated new product. Google's future is an ecological approach.
I'm surprised not to see anyone mention this but a large taxi service for Google can become a huge competitive advantage if it can be intelligently used to gather real-time traffic/street-view/etc data.
Step one: buy car service
Step two: replace drivers with computers
Step three: profit, optimize traffic patterns from within the swarm, decrease accidents, increase fuel efficiency, etc.
uber + Tesla + driverless = an environment friendly transportation system as convenient as if you have a private car and driver and as cheap as public bus.
This is kind of silly. If Google launched it's own uber with the google brand on it, it would easily trump uber. Developing the the uber software would cost way way less than $250 million. These large companies are throwing a lot of money away on stupid acquisitions. (It makes sense in social networking, but not with something like uber which isn't a network effects company).
The highest cost for taxis is not the cars, nor the gas, but the drivers. Get rid of them, and it's all gravy.
Something like this is most certainly the "mass" transit of the future. It would be lower cost, more convenient, and would actually pollute less than buses during non-peak times.