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This is fascinating, obviously it makes a tonne of sense for uber as a platform to offer waymo's autonomous vehicles. The first question I had though was "who
by SilverBirch 3y ago
This is fascinating, obviously it makes a tonne of sense for uber as a platform to offer waymo's autonomous vehicles. The first question I had though was "who extracts value here". Does Waymo get to demand human-driver level prices and therefore capture loads of value or does Uber actually capture the value because they're where the customers are. But then I realised... it doesn't matter. Waymo is part of Alphabet, and Uber is sitting at around a $70Bn market cap, surely if this is starting to show signs of success Alphabet just swoops in and buys up Uber, vertically integrates, gets a great platform, great customer base, has all the customer service infra that google sucks at and they just slowly phase out the human drivers by rolling out autonomous vehicles as they're legalized in each jurisdiction.
- deleted 3y ago[deleted]
- DSingularity 3y agoAlphabet has a large stake in Uber. They don’t need to own it outright to realize huge returns.
- SilverBirch 3y agoSure, but there's massive advantages to bringing it in house. The only reason I could see for them not doing it is that as autonomous vehicles are deployed widely there's going to be a massive backlash from current uber drivers and strategically it might be good for Alphabet to be able to use Uber as a heat shield.
- mytailorisrich 3y agoUber have always wanting to go autonomous cars. They poured a lot of money to try to develop them in-house and I think that they were too optimistic on how easy and quick that would be. But if/when fully autonomous vehicles become a reality they will shed their drivers, same as everyone else.
- lotsofpulp 3y agoHow much of Uber does Alphabet own? They do not show up in the top 10 list here, so presumably 1% at most? https://money.cnn.com/quote/quote.html?symb=UBER https://money.cnn.com/quote/quote.html?symb=UBER https://finance.yahoo.com/quote/uber/holders/ https://finance.yahoo.com/quote/uber/holders/ Seems like pocket change compared to Alphabet’s other investments.
- avrionov 3y agoAccording to this they own part of it: https://www.gv.com/portfolio https://www.gv.com/portfolio
- lotsofpulp 3y agoThat is not surprising, or in question. The claim I am questioning is: > Alphabet has a large stake in Uber. Since Uber is a publicly listed company, its top owners are public information. Which show Alphabet to not have a significant portion of ownership in Uber.
- htrp 3y agoI think google offloaded most of that stake when Uber went public
- jefftk 3y agoThey owned 5% from 2013 to at least 2019: https://www.cnbc.com/2019/04/11/alphabet-uber-investment-stake-has-gone-up-20x-since-2013.html https://www.cnbc.com/2019/04/11/alphabet-uber-investment-sta... I think they sold it in 2019 when their lockup expired, but I can only find "they're thinking of doing it" news (https://techcrunch.com/2019/10/03/ceo-david-krane-suggests-gv-could-sell-the-rest-of-its-uber-stake-at-the-end-of-its-lockup-period-next-month/ https://techcrunch.com/2019/10/03/ceo-david-krane-suggests-g...) and not an announcement.
- riskable 3y agoI just want to chime in to say that it is ridiculous that such information is not so easy to come by. Billion-dollar corporations should not be allowed to keep their external investments so opaque! Especially businesses that are publicly-traded. Also: I don't give a damn if the business isn't publicly traded either. If they're that big they have enough influence over any given market that the public should have the right to know what they're up to.
- mbesto 3y ago> The first question I had though was "who extracts value here". Uber can't be profitable without autonomous vehicles, so the answer IMHO here is simple. For Alphabet, the answer is similarly simple - they'll partner with literally anyone to get distribution.
- ramraj07 3y agoJust because uber is not profitable with human drivers doesn't mean it'll be the opposite without them.
- onlyrealcuzzo 3y agoThis is a win-win for Google. If the self-driving and/or roll-out is a disaster - blame Uber. Uber has a terrible reputation. I don't think too many people will think twice about Uber taking the blame.
- jonas21 3y agoYou say the answer is simple, but I can't tell what your answer is. The first half of your comment implies that Uber has a really bad negotiating position, so Waymo must be extracting most of the value. The second half says that Alphabet (the majority owner of Waymo) will "partner with literally anyone" which would presumably mean Uber is extracting most of the value. So which is it?
- bryanlarsen 3y agoNo contradiction. The second half said that Alphabet had choices on who to partner with, so they could play them against each other, so Waymo had the upper hand in negotiations.
- jonas21 3y agoGot it. Maybe I was reading too much into the tone. I read "they'll partner with literally anyone to get distribution" as them being desperate to get distribution and therefore willing to take a bad deal.
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- osigurdson 3y agoTo me, the HTR (hard to replicate) tech is FSD. Google could bang out a ride booking app in a weekend.
- toddmorey 3y agoSeems like but then why the interest from Waymo in an Uber partnership? They already have the Waymo One app. I think it’s because getting users to switch or use multiple apps proves difficult.
- msoad 3y agoOr multiple on various places. Google Rides, Google Play Hail, Youtube Taxi and so on...
- usrusr 3y agoAnd a betting platform about shutdown order?
- htrp 3y agoJust like Google can bang out a messaging app in a weekend?
- vsskanth 3y agoThey have been. A new one every weekend.
- nickfromseattle 3y ago>Google could bang out a ride booking app in a weekend. Google's culture isn't really built around providing human support to users. I believe there is also lots of onboarding involved for restaurants so Google may struggle there. With that said, I am constantly hit up by outsourced Google reps for Adwords + Firebase but I think the average customer has a much higher transaction volume with much better margins than a restaurant would.
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- makestuff 3y agoI am pretty confident google could spin up an org to replicate the uber app in a few months/maybe a year. However, Uber obviously cannot spin up an org to replicate self driving vehicles in a few months. By that logic I would say Waymo has all of the power since they could develop their own app and undercut uber on pricing. The customers would instantly leave as it is a race to the bottom with ride share.
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- bartwr 3y agoSpinning up the Uber App is most likely trivial. Spinning up the legal structure, figuring out all the local regulations and getting permits (it's not 2010 anymore! Many countries and cities regulate ride sharing pretty heavily) in a sane timeline is close to impossible. And it might be not something that an Alphabet company wants to do risk/ reputation-wise. Better to offload bad press (both related to ride sharing in general, and autonomous vehicles) onto an entity which is already "hated".
- vasilipupkin 3y agogive me 3 good software developers and I can give you an Uber app maybe in 3-6 months? but what I can't give you is uber app being on every iPhone in the country.
- Mistletoe 3y ago> Alphabet just swoops in and buys up Uber Please no. We don’t need the ultimate “startup that was unprofitable and never could be profitable that was just trying to get bought by big tech” example to fuel more nonsense.
- nashashmi 3y agoUber is a very different market player. Waymo only does autonomous car rides. People pick one over the other for a variety of reasons. It’s why local taxi dispatches are still in business. It would be ignorance to think they are the same. Uber opened up people to the freedom of going anywhere and getting a taxi. This took market from a lot of players. But there was always a market it could not take. Waymo will have to do the same. Carve out a specific market share for itself, from a lot of transportation options.
- krebby 3y agoIf no one steps up to challenge Waymo in this space in a reasonable timeframe, Waymo wins. If they do, Uber wins. Uber's play is as a platform. They win if there are several SDC providers (with working autonomy). As an analogy, they're Android; they want to own the network and have multiple operators plug into the Uber app, while the hardware makers don't want to do the work to spin up an expensive 2-way marketplace. Waymo is playing at the iPhone game. They want to be the biggest market operator, and can get away with not owning the top of the funnel for the time being. If other operators fall far behind in progress, Waymo will spin up the investment to vertically integrate and try to siphon Uber customers off that way.
- deegles 3y agoWhat does it mean for a SDC platform to "win"? They either drive safely or they don't. We're setting up for the biggest "winner take all" product-market fit in history. Besides, ~99.9% of people won't have the expertise to make an informed decision on which provider to use (if they even have a choice). The only losing scenario is if one is particularly bad, leading to a ton of regulation (like a FAA for SDCs).
- repsilat 3y agoThe game theory isn't really winner take all. In a two-sided market like Uber (drivers and passengers) it's nearly impossible to bootstrap competition, but with autonomous fleets it's just a matter of capital. You can dump 100 vehicles into a market and be a local player pretty quickly, and the between-city efficiencies aren't super important. Developing the tech is getting cheaper too (sensing hardware improvements, ML improvements) so the first-mover advantage likely won't lead to stable moats. Competition will be more like Apple/Android where constant improvement (probably on cost) is necessary to maintain a lead.
- Tepix 3y agoIf another company solves self driving after Waymo, they can still enter the market. I would usually give new, cheaper competitors a try. Who wouldn't? Uber is kind of an exception, i don't use their services because i consider them scum.
- lhorie 3y agoThe backstory that seems to have been forgotten here is that self driving cars are still a money bleeding endeavor. It's why Uber sold its own self driving division and it's something Cruise has said in the past still needs to be figured out. Uber has pivoted to doing partnerships with any self driving player that is looking for a customer base. Waymo doesn't have the tech nor the desire to figure out logistics to compete with Motional or Cartken in the delivery space, for example. None of these players can instantaneously ramp up to millions of vehicles on the road; they physically don't have enough hardware and the age of money burning for growth at all costs is behind us. I can't imagine Waymo has bigger utilization than Bolt, or even Alto. The way I see it, Uber is more like McDonalds: "easy" to copy from conceptual perspective but also a globally recognizable brand with an undeniably strong customer acquisition arm. Waymo still has a lot to prove to themselves in terms of ROI. Customer acquisition would be even more expenses on top of the already expensive tech, partnering with Uber to offload these costs to a proven customer acquisition player makes sense for them.
- ra7 3y ago> The backstory that seems to have been forgotten here is that self driving cars are still a money bleeding endeavor. It's why Uber sold its own self driving division and it's something Cruise has said in the past still needs to be figured out. Uber sold their self driving division because they killed someone in Arizona due to negligence. And then Anthony Lewandowski happened. Those two incidents complete deflated Uber's hopes to have autonomous vehicle technology. I'm pretty sure they would still be pursuing self driving if not for those incidents.
- id00 3y agoI think the more likely here is that Uber sold self-driving group (alongside other "big bets" like flying taxi research group) because of existential threat to the business during the start of COVID-19 which made them focusing on the main business (+eats) and sell parts that have no profitability in sight.
- lhorie 3y ago
- chaostheory 3y agoFor me the question is who is liable in an accident
- mrguyorama 3y agoThis is America. When a "self driving" car kills someone, we blame the someone for daring to not pay due respect to the magic machine. They shouldn't have crossed the road in the dark! They should have been more visible! They should have been in their own big self driving box!
- BurningFrog 3y agoIf it's the fault of the car, it has to be Waymo.
- 35997279 3y ago>surely if this is starting to show signs of success Alphabet just swoops in and buys up Uber It's too late for that. The regulatory pendulum for mergers like this is swinging the other way. The public was indifferent to big tech gobbling up the competition when times were good. Now that money costs money again, people with normal (i.e., not overpaid tech) salaries are feeling the squeeze, which means politicians need a cause that makes their voters feel like they're fighting for them. The giants must be punished.
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- freejazz 3y ago> has all the customer service infra Have you used Uber? It's impossible to speak to someone
- wmf 3y agoDoes Waymo get to demand human-driver level prices and therefore capture loads of value I'm pretty sure the Waymo Driver costs more than a human driver at this point. Obviously they want to make it cheaper eventually but who knows when that will happen.
- tialaramex 3y agoThis is an R&D cost thing and the right analogy is to the telephone operator. It obviously cost a lot more to build even the first electromechanical last mile exchanges (with Strowager / SXS switches) than to hire some young women to work as operators, let alone to design something like System X (a computerised telephone exchange used in most of the UK from the 1980s) but you don't have to keep paying for the R&D on an ongoing basis. The girls married, or got less boring jobs, or just left work, each time you must recruit and train replacements - but you design System X once and use it for forty years no problem. There are still System X exchanges in the UK to this day, it works fine, so why not. Eventually as copper last miles are discontinued these exchanges will be virtualised, and in some sense System X is then banished to museums like the Strowager electro-mechanical systems I saw as a child.
- wmf 3y agoNo, I think the BOM cost of Waymo is higher.
- fairity 3y agoBy public accounts, the total hardware costs for one SDC is around $300k. If you amortize that over a 5 year lifespan & 50 rides a day, you get $3.28 of variable costs per ride. $3.28 variable cost per ride is less than what Uber is paying its drivers (median pay is ~$10.88 per ride). I imagine it nets out significantly in SDC's favor after adding back in cost of gas, insurance, and maintenance. And, the $300k should decrease over time.
- ghaff 3y agoAn SDC has many of the same operational costs (and maybe more) than a human-driven car. (Also garaging, cleaning, etc. As well as the support staff if a car gets in trouble somehow.) You can admittedly assume electric and assume operational costs may be lower than say a Prius today. But I don't consider it a given that a company which purchases and operates an SDC fleet from Waymo can operate profitably while undercutting rideshare as it exists today.