Self driving cars are inevitable and yet I’m surprised by how aggressive Uber is in contributing to the space. Uber is winning right now due to massive network effects. For most drivers and passengers Uber is the primary option and they only switch when Uber is either in surge if you’re a passenger or if you’re a driver when no passengers are available. Self driving cars eliminate half of the market. They won’t need to balance multiple apps on their phones and won’t need to go back and forth trying to find a passenger. It will all happen behind the scenes and do a much better job than any human would. They’d be as likely to work with Uber as any of their competitors. In fact, the entire protocol may evolve to be open with owners setting up their cars to start picking up and dropping off passengers when they’re not in use. The equivalent of how you can sell electricity back into the grid without having to do a ton of extra work. Imagine being able to own a car and just let it roam so it starts earning.

It’s unclear why Uber is driving this change - self driving pose a risk and diminish their competitive advantage. Maybe the outcome will eliminate individual car ownership and Uber wants to own a fleet of these cars. In that case pushing for this result makes sense but carries a world of risks - why wouldn’t car manufacturers both produce the car and have it part of a fleet? The other option is that they accept it’s not ideal but feel as if they have no choice since if others achieve it first they’ll be in an even worse position. Or maybe Uber does think they’ll own the market by the time self driving cars are a reality and at that point no one else will even bother to compete.


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