Uber, Lyft Gear Up For the Revolution In Driverless Taxis

"Uber Technologies and Lyft gave up on big plans to develop their own driverless taxis years ago. Now, they are revamping their businesses to accommodate competitors that might have figured it out.

The ride-hailing leaders are preparing to bring driverless taxis to your door with new app features that allow customers to use their phones to open trunks and honk horns. They are building infrastructure to maintain the high-tech taxis and training human support staff to handle riders without drivers.

Both companies will have driverless cars -- from Alphabet's Waymo and others -- on their apps this year. In the coming months, riders in Atlanta and Austin, Texas, will be able to hail a Waymo through the Uber app. Lyft plans to offer May Mobility's driverless taxis in Atlanta.

Uber and Lyft have agreed to maintain these driverless fleets. They are finding locations to store the cars, equipping them with chargers and high-speed internet and training workers to maintain the cameras, lidar and other gadgets that driverless vehicles depend on.

"This level of nitty-gritty, it takes years to build," said Andrew Macdonald, Uber's senior vice president of mobility. "It's not something you can do by flipping a switch."

The ride-hailing giants are reacting to growing signs that driverless technology might finally be ready to spread beyond a few experimental markets.

Waymo, which made its own app available to the general public in San Francisco last year, is challenging Uber's and Lyft's stronghold in parts of the city, according to market-research firm YipitData. 

And the swift adoption of driverless cars has some gig drivers worried.

Uber and Lyft once invested billions of dollars in developing their own self-driving cars. Uber co-founder Travis Kalanick used to say the company needed to lead the pivot to driverless technology or risk becoming irrelevant.

Both companies gave up on the costly endeavor during the Covid-19 pandemic, selling their self-driving units. Now they are competing to be the platforms on which the robotaxi technology developed by others will operate.

Uber announced more than five U.S. robotaxi partnerships in the past five months, covering Los Angeles, Dallas and other cities.

Uber struck a deal with Waymo that will allow customers in Austin and Atlanta to hail the company's driverless taxis only through the Uber app, a move that will prevent the maker of driverless cars from taking market share in those cities. Waymo will continue to operate its own app in other cities.

Uber and Lyft will get a cut of the driverless-taxi bookings. The robotaxi companies get access to the ride-sharing giants' tens of millions of customers without having to advertise or build the expensive technology needed to efficiently connect cars to customers.

Human-driven cabs aren't going away soon. The future will be a combination of regular taxis and driverless cars. Uber Chief Executive Dara Khosrowshahi has said it might take a decade before half of Uber's U.S. trips are in self-driving cars.

Even then, the technology might not work in densely populated cities like New York or under some weather conditions, said Robert Mollins, analyst at Gordon Haskett Research Advisors.

"No one's saying 'let's go send some of these cars to Boston in the middle of winter,'" he said. "What happens when all of these sensors get covered in snow?"

General Motors recently pulled the plug on developing its Cruise self-driving cars. 

Tesla plans to start producing its Cybercab before 2027. Amazon.com is testing its Zoox autonomous vehicles.

Still, customers seem to be warming up to the technology. In August, Waymo vehicles picked up close to 500,000 passengers in California, up from fewer than 20,000 a year earlier.

Consumer receipts analyzed by YipitData within Waymo's operating zone in San Francisco found that the company had taken a 22% share in November. Lyft's share in the area fell to 22% the same month, from 34% in August 2023. Uber's share in the area slipped 10 percentage points to 55% over the same period.

Uber and Lyft said they haven't lost riders to Waymo, and their bookings continue to grow in the city.

Lyft CEO David Risher said self-driving cars have expanded the overall ride-hailing market by giving people new reasons to ride.

He said tourists in San Francisco are ordering driverless taxis for their novelty and because Waymo uses high-end Jaguars -- a luxury that won't be the norm as automated-vehicle technology gets installed in less-luxurious cars.

"Tomorrow's AV experience will be quite different," he said on an earnings call.

Daniel Garcia was among a small group of San Franciscans who tested Waymo free of charge from 2023. He loved that he could avoid small talk with another human while controlling the temperature and music. He stopped using Uber and Lyft.

After Waymo started charging and allowing everyone on the app, the wait times started getting longer and fares climbed.

"It really was a dream until it was harder to get it," Garcia said.

He has started using Uber and Lyft again, but not as much as he used to because he will still wait for a Waymo when he has time.

Uber declined to say how much it is investing in driverless-taxi infrastructure. It is still a small amount, said Mollins. "All they are doing right now is learning -- everything is in test and learn mode."

Uber created a feature on its app that will allow customers to remotely honk the horn of a driverless taxi to help them locate their ride. It is scouting for locations for autonomous-vehicle depots that will store and service the cars in areas that aren't too far from rider traffic.

The company is working with existing fleet partners -- the ones that operate the premium Uber Black service -- to transform their facilities into hubs for autonomous vehicles. That means equipping them with hundreds of electric charging stations and raising the internet speed to 10 times that of a typical office to handle all the data the driverless taxis need.

Lyft is transforming its Flexdrive car-rental locations into depots for driverless taxis and adding new features to its app. Riders will be able to adjust the temperature inside a driverless car through their phones.

The company has trained artificial intelligence on its app to answer riders' basic questions about unlocking cars and starting rides. It is teaching staff "to do some of the more thornier things" like helping customers retrieve lost items from driverless cars, said Jeremy Bird, an executive vice president at Lyft.

The company also is building technology to let individuals list their personal autonomous vehicles on its app. "You can have your own fleet of 10 AVs, which you can put on our platform and manage," Bird said." [1]

 

 Uber CEO Dara Khosrowshahi, who is originally from Iran, is deliberately lying that this transition will take ten years. He doesn't want to face protests from the drivers he currently depends on. As soon as the new technology is cheaper than exploiting people, everyone will switch to the new one.

 

1. Uber, Lyft Gear Up For the Revolution In Driverless Taxis. Rana, Preetika.  Wall Street Journal, Eastern edition; New York, N.Y.. 06 Jan 2025: A1.