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How does this benefit Uber? Imagine Daimler can produce 100,000 self-driving cars. They would continue to produce and sell self-driving cars to other people as

How does this benefit Uber? Imagine Daimler can produce 100,000 self-driving cars. They would continue to produce and sell self-driving cars to other people as well. They could sell self-driving cars to Lyft. Individuals could operate their own self-driving car services. They could organize in to cartels and have a single app that competes with Uber or Lyft. Uber is destined to be a commodity in an open marketplace of taxi services as soon as they adopt self-driving cars. Their primary roll right now is as a labor organization. They currently create the economic incentives needed to attract a fleet of drivers. Self-driving cars are not motivated by economic incentives. Uber can't control the sale, distribution and organization of self-driving cars. All that riders care about is being able to reliably get from one side of town to another. They'll know that they can trust Daimler self-driving cars, regardless of the dispatcher. We're going to end up right back to where we started, with a commodity system of private taxi dispatchers and a productive industry of automobile manufacturers, with an emphasis on the automatic nature of this new form of transportation. Daimler is the big winner here if they can bring a self-driving car to market.

sirkneeland 11y ago
I think the other function Uber serves is not just an aggregator of supply (of cars and drivers) but of demand (passengers). It is far from a trivial effort to have a sufficient amount of users know of your app/service, download and install it, trust it enough to add payment details and use it. While not quite as insurmountable an obstacle as, say, making a new smartphone platform (sorry Palm/Nokia/BlackBerry/Microsoft), it is enough of one to make this far from a perfect, liquid market.
- aetherson 11y ago
  Customer acquisition is, I mean, it's not like you literally just snap your fingers, but it's very straightforward. There are hundreds of channels to acquire customers, and services to help you do it. In a hypothetical world in which we have fully autonomous vehicles and someone wants to compete with Uber, anyone who can afford capital investment in a fleet is not going to have much difficulty generating a customer base (and then they can have a mutually destructive price war with Uber).
- username223 11y ago
  > I think the other function Uber serves is not just an aggregator of supply (of cars and drivers) but of demand (passengers). I think you misunderstand Uber. Most of its perceived value is in arbitrage between drivers' perceived and actual costs of car ownership: drivers mostly think in terms of wages minus cost of gas, ignoring all of the other costs. Given that business model, I doubt Uber is actually looking at buying these cars. They will presumably force drivers to buy or lease the cars themselves.
  - williamcotton 11y ago
    So do individuals buy or lease self-driving cars in the future? Would they then set up their self-driving car to take instructions from Uber's central dispatch service in exchange for a cut of the profits? Currently both Uber and Lyft handle the task of vetting drivers and making sure there is a good experience for their customers. They organize and control the labor required for a good experience for the riders. Think about a rider in a world where Lyft and Uber are both dispatching self-driving cars. What's the difference between the services if they're all using Mercedes S-Class SelfDrivers? The rider knows that all Mercedes S-Class SelfDrivers are the same experience. There's no question of if the driver is trustworthy or competent. Uber and Lyft would be providing the exact same commodity experience of sending a self-driving car to your location to then do your bidding in exchange for money.
    - username223 11y ago
      > So do individuals buy or lease self-driving cars in the future? Would they then set up their self-driving car to take instructions from Uber's central dispatch service in exchange for a cut of the profits? In Uber's perfect world, yes. And Uber will do its best to hide the true costs of insurance, depreciation, regular maintenance, etc. from owners and lessors, just like they do today. It's worth understanding that Uber only works as long as it doesn't own any cars, or employ any drivers. If they switch over to owning some self-driving cars, they'll have to maintain and insure them.
jfoster 11y ago
It's possible that Uber & Daimler are no longer completely separate companies, right? One of them could now have a significant stake in the other.
SilasX 11y ago
Uber's (differential) advantage is not so much in labor organization, but rather, in having already built out a customer network and having solved all the logistical and (passenger-side) UX problems that are specific to this kind of application -- how to store, retrieve, and exploit the data, what UX decisions make the app easier to use, how to manage support, etc. Other entrants (Tesla or Mercedes) will have to reinvent this wheel and have to market themselves and get users to download/use yet another app that does the same thing. Personally, I think the right move for Tesla/Mercedes is to just rent out SDCs and focus on their core business rather than expand out into a different one they're new to. (That's not an advantage against Lyft, of course.)

sirkneeland 11y ago

I think the other function Uber serves is not just an aggregator of supply (of cars and drivers) but of demand (passengers). It is far from a trivial effort to have a sufficient amount of users know of your app/service, download and install it, trust it enough to add payment details and use it. While not quite as insurmountable an obstacle as, say, making a new smartphone platform (sorry Palm/Nokia/BlackBerry/Microsoft), it is enough of one to make this far from a perfect, liquid market.

aetherson 11y ago
Customer acquisition is, I mean, it's not like you literally just snap your fingers, but it's very straightforward. There are hundreds of channels to acquire customers, and services to help you do it. In a hypothetical world in which we have fully autonomous vehicles and someone wants to compete with Uber, anyone who can afford capital investment in a fleet is not going to have much difficulty generating a customer base (and then they can have a mutually destructive price war with Uber).
username223 11y ago
> I think the other function Uber serves is not just an aggregator of supply (of cars and drivers) but of demand (passengers). I think you misunderstand Uber. Most of its perceived value is in arbitrage between drivers' perceived and actual costs of car ownership: drivers mostly think in terms of wages minus cost of gas, ignoring all of the other costs. Given that business model, I doubt Uber is actually looking at buying these cars. They will presumably force drivers to buy or lease the cars themselves.
- williamcotton 11y ago
  So do individuals buy or lease self-driving cars in the future? Would they then set up their self-driving car to take instructions from Uber's central dispatch service in exchange for a cut of the profits? Currently both Uber and Lyft handle the task of vetting drivers and making sure there is a good experience for their customers. They organize and control the labor required for a good experience for the riders. Think about a rider in a world where Lyft and Uber are both dispatching self-driving cars. What's the difference between the services if they're all using Mercedes S-Class SelfDrivers? The rider knows that all Mercedes S-Class SelfDrivers are the same experience. There's no question of if the driver is trustworthy or competent. Uber and Lyft would be providing the exact same commodity experience of sending a self-driving car to your location to then do your bidding in exchange for money.
  - username223 11y ago
    > So do individuals buy or lease self-driving cars in the future? Would they then set up their self-driving car to take instructions from Uber's central dispatch service in exchange for a cut of the profits? In Uber's perfect world, yes. And Uber will do its best to hide the true costs of insurance, depreciation, regular maintenance, etc. from owners and lessors, just like they do today. It's worth understanding that Uber only works as long as it doesn't own any cars, or employ any drivers. If they switch over to owning some self-driving cars, they'll have to maintain and insure them.

jfoster 11y ago

It's possible that Uber & Daimler are no longer completely separate companies, right? One of them could now have a significant stake in the other.

SilasX 11y ago

Uber's (differential) advantage is not so much in labor organization, but rather, in having already built out a customer network and having solved all the logistical and (passenger-side) UX problems that are specific to this kind of application -- how to store, retrieve, and exploit the data, what UX decisions make the app easier to use, how to manage support, etc. Other entrants (Tesla or Mercedes) will have to reinvent this wheel and have to market themselves and get users to download/use yet another app that does the same thing. Personally, I think the right move for Tesla/Mercedes is to just rent out SDCs and focus on their core business rather than expand out into a different one they're new to. (That's not an advantage against Lyft, of course.)