Self-Driving Cars – The Elephant In The Room

General , Rideshare Mar 04, 2016 No Comments

There’s an elephant in the room when it comes to ridesharing that needs to be addressed and that elephant is the emergence of the self-driving car.  

We know it’s coming.  

Google, who seems to be leading the way when it comes to self-driving innovation, has been very open with it’s plans and it’s progress to make these cars available to consumers by 2017.  Tesla CEO, Elon Musk, says that by 2020 “true autonomous driving [will be available] where you could literally get in the car, go to sleep and wake up at your destination.”  And by 2030, Uber CEO, Travis Kalanick, says that the company’s entire fleet would be comprised of driverless cars.  

All this innovation is very exciting for the consumer.  Imagine not having to be at the wheel during that morning commute and all time that would free up.  Also, car ownership is a huge cost to consumers — about $9,000 per year.  With an affordable, self-driving car system, there would be little need to actually own a car.   

The cost for an Uber ride would go down because the company’s biggest expense (it’s drivers) would entirely disappear.  Today, 75% of the fees Uber takes in goes directly to drivers.  Without having to pay their drivers, the cost of rides would drop significantly for passengers.  A study by Columbia University found that the introduction of 9,000 driverless cars in New York City could replace the entire fleet of Yellow Cabs and drive prices down to $0.50 per mile from the $4.00 per mile we see today.  

So what does this mean for rideshare drivers today?  

The short answer — nothing.  

Uber doesn’t plan to move its fleet to self-driving cars until 2030.  That’s 15 years away!  And even then, with releases this big, there will likely be delays.  

Also, the introduction of a technology that disrupts an existing industry is not a new concept.  The disruption of the traditional taxi industry is what allowed for ridesharing jobs (from companies like Uber and Lyft) to be created in the first place.

Though, being concerned about the emergence of self-driving technology is completely valid.  Between all driving related jobs, including truck, bus, delivery, taxi, and ridesharing, an estimated 10 million jobs will be eliminated in America.  That’s a huge number of lost jobs that should not be taken lightly.  

To make up for these jobs, we will need to get creative and new industries will need to develop.  Many are hopeful that the $1 trillion of disposable income consumers will save from having to own cars will stimulate innovation that helps replace lost jobs.  And others point to examples where lost opportunities open the door for new ones.  Take parking lots.  Without car ownership, the need for parking lots will essentially be eliminated.  This, however, will open up prime real estate within cities across the country where developments can be created and businesses can be built.  

Rideshare drivers should be aware of the technological landscape, but shouldn’t let the future of self-driving cars discourage them from driving today.  We are in the boom of the on-demand economy where good wages can be earned, hours are totally flexible, and everyone can be their own boss.  We live in a time where companies are spending tons of money and running crazy promotions (like $500 referrals bonuses in Boston) to win out and become the ubiquitous choice in the on-demand world.  And we should take advantage of those opportunities.

Will Uber drivers picket outside of Uber headquarters when self-driving cars are implemented?  Some probably will.  Others will be early adopters for the next, big opportunity, making more money, and paving the way for an entirely new industry.  

Until then, drive on!


Also published on Medium.

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