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They are scoping the price range of Lyft for other buyers, a clever tactic. However I'd place a big bet that Uber will not be sold self driving cars by car com

They are scoping the price range of Lyft for other buyers, a clever tactic. However I'd place a big bet that Uber will not be sold self driving cars by car companies and they will slaughter them by launching their own services. If you have a self driving car selling them to Uber rather than taking the profit for yourself is just stupid, much like selling bitcoin mining hardware - if it's worthwhile you might as well just let it make you money? It's not like Uber have something special; maybe they'll remain carless and let the car manufacturers run their cars on Uber's network? Still the estimated returns Uber expects won't materialise because the car companies will still be able to dictate a price. Is Uber building their own self driving car?

harryh 10y ago
Lot's of companies sell things to other companies that they make an additional profit. I think it remains to be seen how vertically integrated the self driving taxi industry will look.
- andy_ppp 10y ago
  It depends on the value vs the difficulty of doing something vs the returns. For example selling CPUs to Apple is clearly great because they add so much value over what Intel have done themselves. How hard is it for Tesla to build their own Uber for example - they have said they will allow you to do part of this at least so far right? I'm just trying to think of a world where Uber don't win guaranteed. It's definitely me thinking out loud and I've been wrong before :^)
byebyetech 10y ago
>>Uber will not be sold self driving cars by car companies Car companies can't afford to not sell to consumers, that includes Uber. Market is just too big. They can't exclude Uber specifically either.
- rhino369 10y ago
  If they solve the self driving problem at the same time, competition wouldn't allow it. But let's say Ford cracks the problem 18 months before anyone else. Ford could open up its own uber clone--or buy lyft. If I were ford that is what I'd do, since self driving cars may drastically reduce automanifacturing revenue.
saurik 10y ago
My understanding is that Uber has all the self-driving software here and they are just using car manufactures to obtain cars with the kinds of on-board sensors and computer-control required to run their self-driving solution.
majani 10y ago
Clever? No credible investor would put any weight in what a rival has to say about valuation
- swsieber 10y ago
  While you are correct, throwing out a number none-the-less does have an impact - the concept is known as anchoring: https://wikipedia.org/wiki/Anchoring https://wikipedia.org/wiki/Anchoring
kovek 10y ago
If autonomous cars will be on the uber platform, the autonomous rides will be very cheap. There is even more incentive for people to not own a car and instead use Uber. This means that there will be less customers demanding to own an autonomous car. The autonomous car manufacturers will have to sell to Uber.
- melvinmt 10y ago
  > There is even more incentive for people to not own a car and instead use Uber Sure, but if every company (think Tesla/Google/Apple/Amazon etc) eventually can build/buy autonomous cars and offer the same service, what competitive advantage would Uber still have? Their current network effect of matching drivers with customers is where most of their value is imho. If that disappears, then I really don't know why we still need Uber. If I speak into my wearable iEarplug in 2020 and say "Hey Siri, get me a car", would I really care about it being an Uber car?
- diego 10y ago
  That is offset by the convenience of owning an autonomous car which can drive you anywhere on the spot, with all your stuff already in it. If I owned an autonomous car that acted as my personal chauffeur, I'd only consider services like Uber or Lyft when flying out of town.
  - matznerd 10y ago
    Your car would be able to drive home by itself after dropping you off... Or, if you removed your person belongings, it could log into a ride service pool and generate revenue while you are out of town.
- AJ007 10y ago
  It will be interesting to see how this ends up playing out. During stage 1, uber was able to win by scaling up driver and rider supply with enough balance to keep everyone happy enough to continue use. Stage 2, the transition to the self driving vehicle, can be won by whoever is able to supply self driving vehicles at scale. It is plausible that Google and Apple could create a ride marketplace for vehicle manufacturers. You press a button on your phone and a car shows up. This would provide a survival path for car manufacturers. Another plausible scenario is cities converting to self driving "platforms" exclusively run by single companies such as Uber or Google. In the shorter term this could be a winning play because it makes the self driving automation part a little easier. Longer term this doesn't scale so well. However, if a larger company is able to get big cities to sell transportation rights there could be long term lock in. There will be big opportunities here in the next 5 years as municipalities continue to become more strapped for cash. Google, Apple, Uber, Tesla, and BMW are the companies I'm watching closest right now. The big question may be what was more important -- have the rider/driver network first, actually manufacturing self driving electric vehicles (electric is important because emissions and air quality will win cities), or having the platform users use to hail vehicles (Apple and Google.) Uber could have a big IPO and buy a car manufacturer outright but I don't know if that makes much sense. Buying up assets of a bankrupt or bleeding car manufacturer seems more opportune.
flylib 10y ago
except Uber already has a partnership with Volvo http://www.theverge.com/2016/8/18/12541672/uber-volvo-partnership-autonomous-self-driving-car http://www.theverge.com/2016/8/18/12541672/uber-volvo-partne... Investment from Toyota https://techcrunch.com/2016/05/24/uber-and-toyota-confirm-strategic-deal/ https://techcrunch.com/2016/05/24/uber-and-toyota-confirm-st... and they can retrofit existing cars with their autonomous technology which they are doing today/planning to do in the future, they aren't using any of the autonomous technology created by the manufacturers with no plans to and there is plenty of cars they can buy today
- andy_ppp 10y ago
  Fair enough, looks like they agree with my assessment and have planned for it. Still like I say no guarantee of uber being on top - it'll be a race to build the cheapest cars that wins maybe. Is someone doing uber buses to replace public transport?
n00b101 10y ago
If you have a self driving car selling them to Uber rather than taking the profit for yourself is just stupid, much like selling bitcoin mining hardware - if it's worthwhile you might as well just let it make you money? Counter-example: High-Frequency Trading equipment manufacturers, like Metamako[1] and Arista Networks[2]. Their hardware enables HFT firms to make money, but they stay in the network equipment business instead of becoming HFT investment firms. This seems to have worked out well for both sides. [1] https://www.technologyreview.com/s/602135/high-frequency-trading-is-nearing-the-ultimate-speed-limit/ https://www.technologyreview.com/s/602135/high-frequency-tra... [2] https://www.arista.com/en/solutions/high-frequency-trading https://www.arista.com/en/solutions/high-frequency-trading

harryh 10y ago

Lot's of companies sell things to other companies that they make an additional profit. I think it remains to be seen how vertically integrated the self driving taxi industry will look.

andy_ppp 10y ago
It depends on the value vs the difficulty of doing something vs the returns. For example selling CPUs to Apple is clearly great because they add so much value over what Intel have done themselves. How hard is it for Tesla to build their own Uber for example - they have said they will allow you to do part of this at least so far right? I'm just trying to think of a world where Uber don't win guaranteed. It's definitely me thinking out loud and I've been wrong before :^)

byebyetech 10y ago

>>Uber will not be sold self driving cars by car companies Car companies can't afford to not sell to consumers, that includes Uber. Market is just too big. They can't exclude Uber specifically either.

rhino369 10y ago
If they solve the self driving problem at the same time, competition wouldn't allow it. But let's say Ford cracks the problem 18 months before anyone else. Ford could open up its own uber clone--or buy lyft. If I were ford that is what I'd do, since self driving cars may drastically reduce automanifacturing revenue.

saurik 10y ago

My understanding is that Uber has all the self-driving software here and they are just using car manufactures to obtain cars with the kinds of on-board sensors and computer-control required to run their self-driving solution.

majani 10y ago

Clever? No credible investor would put any weight in what a rival has to say about valuation

swsieber 10y ago
While you are correct, throwing out a number none-the-less does have an impact - the concept is known as anchoring: https://wikipedia.org/wiki/Anchoring https://wikipedia.org/wiki/Anchoring

kovek 10y ago

If autonomous cars will be on the uber platform, the autonomous rides will be very cheap. There is even more incentive for people to not own a car and instead use Uber. This means that there will be less customers demanding to own an autonomous car. The autonomous car manufacturers will have to sell to Uber.

melvinmt 10y ago
> There is even more incentive for people to not own a car and instead use Uber Sure, but if every company (think Tesla/Google/Apple/Amazon etc) eventually can build/buy autonomous cars and offer the same service, what competitive advantage would Uber still have? Their current network effect of matching drivers with customers is where most of their value is imho. If that disappears, then I really don't know why we still need Uber. If I speak into my wearable iEarplug in 2020 and say "Hey Siri, get me a car", would I really care about it being an Uber car?
diego 10y ago
That is offset by the convenience of owning an autonomous car which can drive you anywhere on the spot, with all your stuff already in it. If I owned an autonomous car that acted as my personal chauffeur, I'd only consider services like Uber or Lyft when flying out of town.
- matznerd 10y ago
  Your car would be able to drive home by itself after dropping you off... Or, if you removed your person belongings, it could log into a ride service pool and generate revenue while you are out of town.
AJ007 10y ago
It will be interesting to see how this ends up playing out. During stage 1, uber was able to win by scaling up driver and rider supply with enough balance to keep everyone happy enough to continue use. Stage 2, the transition to the self driving vehicle, can be won by whoever is able to supply self driving vehicles at scale. It is plausible that Google and Apple could create a ride marketplace for vehicle manufacturers. You press a button on your phone and a car shows up. This would provide a survival path for car manufacturers. Another plausible scenario is cities converting to self driving "platforms" exclusively run by single companies such as Uber or Google. In the shorter term this could be a winning play because it makes the self driving automation part a little easier. Longer term this doesn't scale so well. However, if a larger company is able to get big cities to sell transportation rights there could be long term lock in. There will be big opportunities here in the next 5 years as municipalities continue to become more strapped for cash. Google, Apple, Uber, Tesla, and BMW are the companies I'm watching closest right now. The big question may be what was more important -- have the rider/driver network first, actually manufacturing self driving electric vehicles (electric is important because emissions and air quality will win cities), or having the platform users use to hail vehicles (Apple and Google.) Uber could have a big IPO and buy a car manufacturer outright but I don't know if that makes much sense. Buying up assets of a bankrupt or bleeding car manufacturer seems more opportune.

flylib 10y ago

except Uber already has a partnership with Volvo http://www.theverge.com/2016/8/18/12541672/uber-volvo-partnership-autonomous-self-driving-car http://www.theverge.com/2016/8/18/12541672/uber-volvo-partne... Investment from Toyota https://techcrunch.com/2016/05/24/uber-and-toyota-confirm-strategic-deal/ https://techcrunch.com/2016/05/24/uber-and-toyota-confirm-st... and they can retrofit existing cars with their autonomous technology which they are doing today/planning to do in the future, they aren't using any of the autonomous technology created by the manufacturers with no plans to and there is plenty of cars they can buy today

andy_ppp 10y ago
Fair enough, looks like they agree with my assessment and have planned for it. Still like I say no guarantee of uber being on top - it'll be a race to build the cheapest cars that wins maybe. Is someone doing uber buses to replace public transport?

n00b101 10y ago

If you have a self driving car selling them to Uber rather than taking the profit for yourself is just stupid, much like selling bitcoin mining hardware - if it's worthwhile you might as well just let it make you money? Counter-example: High-Frequency Trading equipment manufacturers, like Metamako[1] and Arista Networks[2]. Their hardware enables HFT firms to make money, but they stay in the network equipment business instead of becoming HFT investment firms. This seems to have worked out well for both sides. [1] https://www.technologyreview.com/s/602135/high-frequency-trading-is-nearing-the-ultimate-speed-limit/ https://www.technologyreview.com/s/602135/high-frequency-tra... [2] https://www.arista.com/en/solutions/high-frequency-trading https://www.arista.com/en/solutions/high-frequency-trading