1 day Ago By Brad Templeton, Senior Contributor
Drivers today feel they work for Uber and Lyft, but big companies will want Uber to work for them Today, if you summon a ride with Uber in Austin, you may get offered a ride in a Waymo robotaxi. That’s also true in Phoenix, but in Austin, it’s the only way to get a Waymo. It’s not assured you will get one.
In other cities, such as LA, San Francisco and Silicon Valley, and soon Atlanta and Miami, which were announced after Austin, you can only summon a Waymo through the official Waymo One app. That app works a lot like the Uber app. At the recent Curbivore conference in Los Angeles, Richard Wilder of Uber outlined their strategy to provide the ride-hail ecosystem for robotaxi providers.
After all, Uber is by far the leading brand in summoning rides with a mobile phone outside of Asia. Uber would love for users to come to them, as they do today, seeking a ride, and match them up with a suitable robotaxi from a variety of fleets. Waymo’s happy to experiment with Uber today, and Uber with Waymo.
Waymo’s not aiming for profit at present, and Uber sends them as many riders as they can take--reportedly 20% of the Uber rides in Austin--and while Uber gets a share of the money, Waymo doesn’t have to do the work of marketing or attracting riders or billing. It’s a win-win. For now.
About 8 milion people in the USA “drive for Uber.” Uber likes to pretend it’s just a marketplace that connects independent contractors with rider/customers, but the reality is those drivers are tiny fish in Uber’s big pond, and they all view it as working for Uber, though they find it a very flexible employer. Uber is in control, sets the prices, decides the rules, decides who gets rides and just about everything else.
The drivers just decide when to be available, and sometimes to reject rides, but they must not reject too many. Uber originally wanted to make its own robotaxi system, a project that ended in tragedy and was trade off for a piece of Aurora. (Lyft sold its project to Toyota, where it may also not come to fruition .
) Waymo is a unit of Alphabet, one of the world’s largest companies and in Google, one of the top brands on the planet. Alphabet dwarfs Uber in every way except number of current ride-hail customers. Waymo probably would be happy to work with Uber, but it won’t allow Uber to be in charge of the relationship, controlling prices or how many rides it gets, or even defining user experience.
And it’s doubtful they would let Uber keep the brand exposure. Waymo hasn’t spent billions to build a robotic Uber driver. It won’t be Waymo working for Uber .
At most it will be Uber working for Waymo . It should be noted that today’s Uber drivers are not thrilled about Uber’s enthusiasm to replace them, though they know not to expect Uber to be loyal to them and don’t treat gig-work as a long-term career. It is dubious how strong the role for drivers is in the “hybrid” model where Uber offers both robotaxis and human rides.
Waymo is way ahead, but there are several other companies hoping to enter this space. They include Zoox, a unit of Amazon, Tesla, Hyundai’s Motional, May Mobility and companies who hope to use self-driving systems made by Nuro and MobilEye. Aurora also plans to go beyond trucking.
Amazon/Zoox is also one of the world’s biggest companies, dwarfing Uber. On top of that, Amazon has a billing relationship with around 240 million people in the USA. (Uber is “tiny” with about 60 million.
) So many already have Amazon’s and Google’s apps on their phones. I expect Zoox, when it starts, to offer better prices and perks to the 180 million members of Amazon Prime in the USA. You might download a new app, but otherwise everything is already set up for your first ride.
(At first Zoox will be regulating demand so it won’t start this way. Zoox says they will launch this year in Las Vegas, but they also said that last year.) Apple dropped out of making a robotaxi.
Had they stayed, they also have super-giant status. Indeed, all rides on Uber are hailed through either Apple or Alphabet’s phone operating systems. The most popular app for getting around is Alphabet’s Google Maps , and you can indeed find a Waymo with it already.
(You can also find an Uber and others when they pay, and due to antitrust concerns, that will probably continue.) Tesla is its own entity. Tesla plans to build its own ridehail network, it says, if they should eventually get a working robotaxi.
More, they say they will let Tesla private car owners hire out their cars through that network, and they expect private owners and fleets to buy dedicated Cybercabs just to hire them out. (Analysis of that is for another article, but Tesla’s own team doesn’t think that is practical.) Tesla is only a little bigger than Uber in sales, but dwarfs it in resources and market cap.
Tesla won’t work for Uber. While Hyundai is bigger than Uber, it’s not out of the question that Motional, its startup subsidiary, might act more like a small player and work with Uber in a less dominant position. (Hyundai wants to be more neutral, and is supplying cars to Waymo and others, as well as Motional.
) You might see other smaller players like May and Aurora willing to “drive for Uber,” but even they won’t be in the completely subordinate relationship of an Uber driver. When they start, they will be hungry for rides and be willing to give up something to have Uber source them. Nuro and MobilEye hope to sell white label self-driving to big automakers as well as up-and-comers like Verne.
Most automakers also dwarf Uber but have limited abilities and experience in ride-hail. Indeed, They need Uber more, but they don’t need it like a human Uber driver does. A Waymo comes to pick up the author at the Curbivore conference in Los Angeles April 11.
In LA, ...
More Waymo can only be summoned with the Waymo One app. Riders, on the other hand, may not care much about robotaxi brand. Many of them will say “I want the closest one" or “I want the cheapest.
” Uber tries to give you the first, but today all Ubers of the same quality level are the same price. Sidecar, which predated Uber, let drivers set prices, but riders didn’t actually like this complexity. Indeed, if not for the conflict of interest due to Waymo, Google Maps is a natural place to go shopping, since that’s a lot of what Google does.
Waymo does have something else it wants from Uber, though. Robotaxi services (even from Tesla) will have service areas, and limited fleets. There will be times when they can’t take you to or from a destination, and to serve you they will want to get you a human driver.
They might eat the extra cost to keep you happy, or offer it as an alternative to be a one-stop-shop. For that it makes sense to just pay Uber to do it. (Indeed, robotaxi providers may frequently subcontract rides they can’t deliver on to a competitor.
) It’s too important in the robotaxi business to own the customer. If you own the customer you control the whole ride value chain. It’s like being every different transportation company at once .
It’s $5 trillion globally and it’s much too tempting to give up unless you have to. Long term, the robotaxi companies don’t plan to price like Uber does. Don’t be fooled by the fact they have begun this way.
They certainly plan to be cheaper per mile, but they also want to offer more radically different pricing options, like flat-rate subscriptions and loyalty incentives. That doesn’t really fit with just being a service available within Uber. As noted, they will be happy to take business from Uber when it suits them, but on the robotaxi company’s terms, not Ubers.
When Uber has a surge, it might offer Waymo a higher price that’s very attractive, and Waymo would be happy to serve that ride. Indeed, they’ll be happy to serve any ride at the Uber human-driver price, which will be a fair bit higher than the price in their own app. But riders will know that and avoid the app with the higher price.
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