- Business Insider/Corey Protin
Uber just edged ahead in the driverless car arms race.
The company made a huge move Wednesday when it released its self-driving car to the public for the first time. As part of its pilot program, select Uber users in Pittsburgh will be able to hail and ride in a driverless car. At first, the trips will be for free, but an Uber spokesperson said that may change in time.
A number of car companies are aiming to do this, but Uber is beating them all to the punch.
Ford, for example, plans to roll out its first fully autonomous cars for ride-sharing by 2021. Google is aiming for 2020, and Tesla is planning to make its vehicles part of car-sharing network once its cars are fully autonomous.
Why do all of these companies want to get into some sort of ride-hailing service?
Because automakers and tech companies alike predict that the traditional car ownership model will dwindle with the rise of self-driving cars. The theory goes, as cars become more autonomous, it will become cheaper for consumers to hail a driverless car than to own a personal vehicle.
Merill Lynch predicted in a 2015 report that driverless taxis like Ubers will make up 43% of new car sales by 2040. The Boston Consulting Group also wrote in a 2015 report that driverless taxi sales are bound to incline. The BCG predicts that 23% of global new car sales will come from driverless taxis by 2040, which will result in a decline in vehicle ownership in cities.
Car companies are prepping for the decline of personal car ownership by investing in autonomous vehicles that can be used in a fleet setting to transport people wherever they want to go. They know that whoever has the relationship with the customer will ultimately win the ride-sharing market.
But automakers and tech firms will have to play catch-up with Uber in building out a ride-sharing network.
- Business Insider/Corey Protin
Uber has built up one of the largest ride-sharing networks in the world. After all, it’s the most popular taxi app in 108 countries. That means Uber needs to focus on getting the driverless tech part figured out, while other companies have to build a ride-sharing network and get their tech up to snuff.
Uber isn’t building its own self-driving car, but is instead partnering with automakers to build the base vehicle for their autonomous cars. For example, Uber has a $300 million partnership with Volvo to develop a fully autonomous car by 2021. But Uber isn’t exclusively partnering with Volvo, it also has plans to work with other automakers.
Currently, Uber is using Ford Fusions retrofitted with its technology for its pilot program in Pittsburgh.
I took a ride in Uber’s driverless Ford Fusion on Monday and its technology is pretty impressive. Yes, there are times it fails. But having been in Uber’s self-driving car, it manages a difficult city like Pittsburgh extraordinarily well. It can also recognize traffic lights, which isn’t something we can say for Tesla yet, unless the latest software update Version 8.0 introduces that new feature.
Uber introducing the public to its driverless tech, even if it isn’t fully ready and still needs a driver and engineer present, is a genius way to expose people to the concept of getting picked up in a driverless Uber.
Like most driverless car companies, there are still ways to go before an Uber can be fully autonomous. But it competes soundly with Tesla, which is really the only competitor the public can interact with right now.
Overall, a lot can happen in the next few years. But my advice: don’t sleep on Uber.