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The self driving car idea won't help Uber or Lyft for two reasons. First, neither company has the tech experience to build one. Second, and more importantly, bo

The self driving car idea won't help Uber or Lyft for two reasons. First, neither company has the tech experience to build one. Second, and more importantly, both companies would have to buy and maintain the cars which isn't financially viable.

bduerst 7y ago
They're hoping you'll buy a self-driving car and then let them pay you a minimal fee to use it when you're not. The problem is that self-driving cars will change car ownership needs, and that there could be entirely different companies in the space when it does finally come around.
- SilasX 7y ago
  It's not unrealistic to roll that out as a profitable service. It is unrealistic to expect that to be a moat-profitable income source for Uber, when you can rent that same SDC to Lyft -- or Tesla, for that matter [1] -- who will offer competitive terms. [1] If they offer it for their own cars, they could probably extend the platform to allow outside cars, perhaps with different branding.
  - bduerst 7y ago
    Yep, the landscape will probably be entirely different and we'll be talking about the next ridesharing unicorn that managed to corner the self-driving rideshare market.
- erikpukinskis 7y ago
  I'm not sure I buy that scenario... Is there any other market where random consumers are basically acting as financiers for a commercial fleet of equipment? What's the reason for the fleet operator to involve those customer-owners at all? In terms of immediate cost, it will be cheaper as a customer just to use the ride sharing service yourself, since you won't have to pay car payments you'll just pay the rideshare fee. Especially if the self driving software gets priced in the $10,000+ range as Tesla has suggested it will end up. So anyone in the "budget" category will just be buying rides not vehicles. They'll have to wait 5 minutes for a vehicle, and they won't get to have their vehicle of choice, but they also won't have to deal with the hassle of running a mini carshare business, whatever that will entail. Most people in the "premium" category isn't going to want random drunk people fingerblasting each other in the back seat of their nice car, so that cuts out the top of the market. That leaves what... people who want to save some money but also really want to own their own car, but also are comfortable sharing it with random people? Seems like a weird segment. Why wouldn't the fleet operator just buy cars and own them? They're going to be burning through these vehicles every 5 years anyway, what's the point of parking them in a random owner-operator's garage and having them taking it out of the fleet when they feel like it?
  - mimixco 7y ago
    Indeed. And surprisingly, no one[#] has brought up that there is no such thing as as a national (or even regional) taxi service. And why is that? It's because the economics of fleet ownership don't scale to that size. If they did, we'd have a single nationwide taxi service already. In 100 years of taxis, no one has done that. [#] Except Hubert Horan who destroyed all their BS with his series, "Can Uber Ever Deliver?"
    - bduerst 7y ago
      The reason there isn't a national chain is because municipal laws fragment the market. You can typically schedule a cab for pickup in rural America (I've done it before), it is just expensive because you're also paying for a person's time to drive out there and back.
    - SilasX 7y ago
      Yeah, but arguably smartphone technology reduced admin costs and raised the size of the economically optimal taxi provider. That has been around for less than a hundred years. Edit: Dangit, I thought my reply got eaten, but I was looking at a different branch. See the rephrasing here: https://news.ycombinator.com/item?id=19880565 https://news.ycombinator.com/item?id=19880565
      - mimixco 7y ago
        Smartphones didn't reduce the cost of dispatch. Look what Uber spends on app development! The big costs in taxis are maintaining the fleet, a cost which Uber externalizes to its drivers, some of whom now have to sleep in their cars.
        SilasX 7y ago
        They most certainly did. As expensive as that software is, it’s very little when amortized over the rides. It eliminates the overhead of finding a location and transmitting the info, and delivers higher value in that it gives real time data about where the car is, and lets you pay more conveniently. Also: while the drivers have physically taken over maintenance, Uber can’t push the economic cost on to them, because they have to pay enough that drivers want to continue to work even given those costs. If anything, maintenance is cheaper when handled by a big org. To the extent they realize a savings, it’s because they’re using the spare hours of existing vehicles and don’t have to take on all the dead ours they’d have from owning the cars not because they’re getting maintenance free in any meaningful sense.
- mimixco 7y ago
  I doubt that people who have to sleep in their cars will be able to afford an autonomous vehicle.
kmonsen 7y ago
And maintain includes very regular things like cleaning etc. I can't imagine this is things they want to do so it will probably stay a network Tesla style, but with lower (hopefully) costs.
notahacker 7y ago
And in the (imho unlikely) scenario that fully autonomous taxis are a viable mass market opportunity in the foreseeable future, both companies would find that rivals who actually do make the cars and have networks of maintenance centres are in a much better competitive position. Making the pricing and matching app isn't the difficult part, and Uber's existing driver base ceases to have value
kevin_b_er 7y ago
Indeed, part of the ability for the driving "gig economy" is the masking of risk and liability from the corporation onto the individual driving humans for car expenses and depreciation. The myriad of humans thinking Uber/Lyft are job have yet to get caught up the the expense of the car itself. Uber/Lyft both hope they can get to self driving cars before the drivers figure out the true cost after the car they provided to Uber for free is involved.
erikpukinskis 7y ago
> neither company has the tech experience to build one They have the experience to distribute software to millions of devices on a regular basis and run a logistics platform and a consumer app. That's something automakers will struggle to do. Automakers can build cars. That's something Über will struggle to do. Seems like a fairly straightforward partnership to me. There are many automakers and most of them (anything vaguely in the budget category) will be struggling mightily if robotaxis ever work. Mightily struggling automakers like to make deals where they get to make autos.
- mimixco 7y ago
  The tech to distribute an app? You mean Google Play, lol? A teenager can get an app in there. Uber can't afford to run a national taxi service at scale for the same reasons no one else has ever done so. The economics of a taxi fleet don't scale to that size. Owning their own autonomous vehicles would only further erode their non-existent business model.
  - erikpukinskis 7y ago
    No, I mean built the app, maintain it, build a relationship with users, get people to download it and tell their friends, all of that. > The economics of a [self driving] taxi fleet don't scale to that size. I'd be interested in hearing your analysis! I haven't heard that one. Tesla claims these vehicles will pay themselves off within two to three years once they can operate fully autonomously.
    - mimixco 7y ago
      Hubert Horan has done an amazing teardown with his series, "Can Uber Ever Deliver?" But you don't need to be a transportation logistics expert (as he is) to see that there are no national or even regional cab companies. The reason is that, after a certain size, the business simply doesn't scale.
      - SilasX 7y ago
mimixco 7y ago
Downvoting this doesn't make it any less true. Sorry, Uber shills on HN. You can be in denial as long as you like and it doesn't change anything.
- dang 7y ago
  This comment breaks the site guidelines. Would you please review them and follow them when posting here? https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

bduerst 7y ago

They're hoping you'll buy a self-driving car and then let them pay you a minimal fee to use it when you're not. The problem is that self-driving cars will change car ownership needs, and that there could be entirely different companies in the space when it does finally come around.

SilasX 7y ago
It's not unrealistic to roll that out as a profitable service. It is unrealistic to expect that to be a moat-profitable income source for Uber, when you can rent that same SDC to Lyft -- or Tesla, for that matter [1] -- who will offer competitive terms. [1] If they offer it for their own cars, they could probably extend the platform to allow outside cars, perhaps with different branding.
- bduerst 7y ago
  Yep, the landscape will probably be entirely different and we'll be talking about the next ridesharing unicorn that managed to corner the self-driving rideshare market.
erikpukinskis 7y ago
I'm not sure I buy that scenario... Is there any other market where random consumers are basically acting as financiers for a commercial fleet of equipment? What's the reason for the fleet operator to involve those customer-owners at all? In terms of immediate cost, it will be cheaper as a customer just to use the ride sharing service yourself, since you won't have to pay car payments you'll just pay the rideshare fee. Especially if the self driving software gets priced in the $10,000+ range as Tesla has suggested it will end up. So anyone in the "budget" category will just be buying rides not vehicles. They'll have to wait 5 minutes for a vehicle, and they won't get to have their vehicle of choice, but they also won't have to deal with the hassle of running a mini carshare business, whatever that will entail. Most people in the "premium" category isn't going to want random drunk people fingerblasting each other in the back seat of their nice car, so that cuts out the top of the market. That leaves what... people who want to save some money but also really want to own their own car, but also are comfortable sharing it with random people? Seems like a weird segment. Why wouldn't the fleet operator just buy cars and own them? They're going to be burning through these vehicles every 5 years anyway, what's the point of parking them in a random owner-operator's garage and having them taking it out of the fleet when they feel like it?
- mimixco 7y ago
  Indeed. And surprisingly, no one[#] has brought up that there is no such thing as as a national (or even regional) taxi service. And why is that? It's because the economics of fleet ownership don't scale to that size. If they did, we'd have a single nationwide taxi service already. In 100 years of taxis, no one has done that. [#] Except Hubert Horan who destroyed all their BS with his series, "Can Uber Ever Deliver?"
  - bduerst 7y ago
    The reason there isn't a national chain is because municipal laws fragment the market. You can typically schedule a cab for pickup in rural America (I've done it before), it is just expensive because you're also paying for a person's time to drive out there and back.
  - SilasX 7y ago
    Yeah, but arguably smartphone technology reduced admin costs and raised the size of the economically optimal taxi provider. That has been around for less than a hundred years. Edit: Dangit, I thought my reply got eaten, but I was looking at a different branch. See the rephrasing here: https://news.ycombinator.com/item?id=19880565 https://news.ycombinator.com/item?id=19880565
    - mimixco 7y ago
      Smartphones didn't reduce the cost of dispatch. Look what Uber spends on app development! The big costs in taxis are maintaining the fleet, a cost which Uber externalizes to its drivers, some of whom now have to sleep in their cars.
      - SilasX 7y ago
        They most certainly did. As expensive as that software is, it’s very little when amortized over the rides. It eliminates the overhead of finding a location and transmitting the info, and delivers higher value in that it gives real time data about where the car is, and lets you pay more conveniently. Also: while the drivers have physically taken over maintenance, Uber can’t push the economic cost on to them, because they have to pay enough that drivers want to continue to work even given those costs. If anything, maintenance is cheaper when handled by a big org. To the extent they realize a savings, it’s because they’re using the spare hours of existing vehicles and don’t have to take on all the dead ours they’d have from owning the cars not because they’re getting maintenance free in any meaningful sense.
mimixco 7y ago
I doubt that people who have to sleep in their cars will be able to afford an autonomous vehicle.

kmonsen 7y ago

And maintain includes very regular things like cleaning etc. I can't imagine this is things they want to do so it will probably stay a network Tesla style, but with lower (hopefully) costs.

notahacker 7y ago

And in the (imho unlikely) scenario that fully autonomous taxis are a viable mass market opportunity in the foreseeable future, both companies would find that rivals who actually do make the cars and have networks of maintenance centres are in a much better competitive position. Making the pricing and matching app isn't the difficult part, and Uber's existing driver base ceases to have value

kevin_b_er 7y ago

Indeed, part of the ability for the driving "gig economy" is the masking of risk and liability from the corporation onto the individual driving humans for car expenses and depreciation. The myriad of humans thinking Uber/Lyft are job have yet to get caught up the the expense of the car itself. Uber/Lyft both hope they can get to self driving cars before the drivers figure out the true cost after the car they provided to Uber for free is involved.

erikpukinskis 7y ago

> neither company has the tech experience to build one They have the experience to distribute software to millions of devices on a regular basis and run a logistics platform and a consumer app. That's something automakers will struggle to do. Automakers can build cars. That's something Über will struggle to do. Seems like a fairly straightforward partnership to me. There are many automakers and most of them (anything vaguely in the budget category) will be struggling mightily if robotaxis ever work. Mightily struggling automakers like to make deals where they get to make autos.

mimixco 7y ago
The tech to distribute an app? You mean Google Play, lol? A teenager can get an app in there. Uber can't afford to run a national taxi service at scale for the same reasons no one else has ever done so. The economics of a taxi fleet don't scale to that size. Owning their own autonomous vehicles would only further erode their non-existent business model.
- erikpukinskis 7y ago
  No, I mean built the app, maintain it, build a relationship with users, get people to download it and tell their friends, all of that. > The economics of a [self driving] taxi fleet don't scale to that size. I'd be interested in hearing your analysis! I haven't heard that one. Tesla claims these vehicles will pay themselves off within two to three years once they can operate fully autonomously.
  - mimixco 7y ago
    Hubert Horan has done an amazing teardown with his series, "Can Uber Ever Deliver?" But you don't need to be a transportation logistics expert (as he is) to see that there are no national or even regional cab companies. The reason is that, after a certain size, the business simply doesn't scale.
    - SilasX 7y ago

mimixco 7y ago

Downvoting this doesn't make it any less true. Sorry, Uber shills on HN. You can be in denial as long as you like and it doesn't change anything.

dang 7y ago
This comment breaks the site guidelines. Would you please review them and follow them when posting here? https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html