Race is on for driverless cars

Race is on for driverless cars
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The race to get driverless cars in ride-hailing fleets has gone from a marathon to a sprint.

So-called autonomous vehicles have long been viewed as the future of transportation services, since the technology cuts out the costs of drivers, can lower fares for customers and has the potential to reduce traffic and pollution.

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This week, Ford Motor Co. unveiled new plans to build a fully driverless car for commercial purposes by 2021, while Uber just announced that passengers in Pittsburgh will be able to summon semi-autonomous cars with their phones beginning this month.

The moves could raise pressure on competitors like Google, which has been a pioneer in testing self-driving cars on public roads.

Each company brings something different to the table: Ford has actual experience building cars; Google has Silicon Valley technology expertise; and Uber already has a tight grip on the ride-hailing industry.

But all of them could face the same regulatory hurdles, meaning the companies may need to work together to encourage laws favorable to deploying driverless cars.

Here is a look at some of the leading players as the battle to get these cars on the road heats up:

 

Tech giants

Google’s self-driving car project has a major head start in the game, though the gap may be narrowing.

The heavyweight has been working for years on autonomous technology and suggested it may begin testing fully driverless cars without pedals or steering wheels in the next several years.

Having the backing of a tech giant has allowed the project to operate without the financial pressures or constraints other companies face.

But the program, which just lost its chief technical officer, Chris Urmson, last week, is spinning off to form its own company under Google’s parent Alphabet.

The project has kept business plans close to the vest, though Bloomberg reported that Google is preparing to launch its own driverless ride-hailing service to rival Uber.

Google’s venture arm invested in Uber three years ago, and the company also purchased Israeli map app Waze.

Since it may be a decade before autonomous cars are sold on the market, a ride-hailing service may be a prime opportunity for Google to begin reaping the financial rewards of its cutting-edge technology.

“We're thinking a lot about how in the long-term, this might become useful in people's lives, and there are a lot of ways we can imagine this going,” Urmson said in a press call earlier this year, according to Bloomberg.

“One is in the direction of the shared vehicle. The technology would be such that you can call up the vehicle and tell it where to go and then have it take you there.”

Apple is also invested in ride-hailing in China, through a stake in local powerhouse Didi Chuxing, while reportedly exploring its own autonomous car business.

Other investors in Didi include Chinese giants Alibaba Group Holding and Tencent Holdings.

Chinese search firm Baidu, which is developing its own self-driving car technology, is an investor in Uber — which just announced that it intends to merge its Chinese subsidiary with Didi Chuxing.

 

Ride-hailing Firms

Autonomous vehicles are also the latest battleground in the ongoing brawl between Uber and U.S. rival Lyft.

Both companies already have platforms that allow users to hail rides from drivers. Autonomous vehicles, though, could let the companies take drivers out of their business model almost entirely.

“This is going to be the world,” said Uber CEO Travis Kalanick last year about driverless cars. “And so the question for a tech company is, do you want to be part of the future or do you want to resist the future?"

Those efforts got a jolt this week when Uber announced that it had acquired Otto, a small company that has been working on automation for trucks. Uber is also joining forces with Volvo for a $300 million effort to develop a fully driverless vehicle by 2021. And Uber will roll out autonomous vehicles to its users this month in downtown Pittsburgh, albeit with a driver behind the wheel for safety reasons.

As for Lyft, the Wall Street Journal reported earlier this year that it be testing autonomous vehicles with passengers by next year through its partnership with General Motors.

“We remain focused on our work with GM to develop an on-demand network of autonomous vehicles,” said Lyft spokesperson Adrian Durbin. “We are confident in our approach and continue to make progress in this area.”

The involvement of Uber and Lyft in the driverless car industry raises questions about the future of their drivers.

Drivers take a large percentage of a rider’s fare, so removing them from the equation could raise revenues for the companies and allow them to lower prices, moving them closer to their stated goals of cutting into car ownership.

Kalanick told Business Insider this week that drivers likely won’t be replaced entirely and argued the company’s efforts will create more jobs in the long run.

“In fact, I think, in an autonomous world, it goes up,” he said in the interview. “In absolute figures. Of course, in percentage, it's down. But then you also think, what about the tens of thousands of jobs that are necessary to maintain that fleet?”

 

Automakers

Not wanting to be left in the dust by Silicon Valley, more automakers are jumping into the driverless car race.

But car companies are prioritizing their efforts on designing fully autonomous vehicles for commercial purposes before making them available for personal consumers.

Ford announced this week that it plans to build a completely driverless car – with no steering wheel or pedals – in the next five years.

The vehicle is being specifically created for ride-hailing fleets and on-demand taxi services.

Ford has not indicated whether it plans to start its own ride-hailing service or partner with a firm like Uber or Lyft.

For now, the automaker is just focused on investing and collaborating with several autonomous technology startups; expanding its Silicon Valley team; and more than doubling its research and innovation center in Palo Alto.

“We don’t expect to see fully autonomous vehicles used for personal ownership for several years after their first introduction because the economics don’t make sense,” said Raj Nair, chief technical officer of Ford, during a press conference.

After investing $500 million in Lyft earlier this year, GM announced plans to begin testing a fleet of self-driving Chevrolet Bolt electric taxis within a year. The automaker has also purchased Cruise Automation Inc., a San-Francisco-based developer of driverless technology.

Meanwhile, Volvo will be a key partner in Uber’s mission to begin offering semi-autonomous rides to passengers this month.

Tesla Motors, which recently came under fire for crashes involving its semi-autonomous “Autopilot” feature, also outlined a vision in which customers could share and rent out Tesla vehicles that are equipped with fully self-driving technology.

“You will also be able to add your car to the Tesla shared fleet just by tapping a button on the Tesla phone app and have it generate income for you while you're at work or on vacation,” Elon Musk, chief executive officer of Tesla, wrote in his latest blueprint for the company.