How Rideshares Will Blend Into OEMs When Autonomous Cars Go Mainstream

No doubt, 2017 is the year of autonomous. Major carmakers are not only testing driverless cars, but are beginning to deploy shuttle-like autonomous ridesharing services in closed environments.

Ford Motor Co., for example, vowed to have its first batch of autonomous shared shuttles available on Ford factory campuses next year. It will also launch a high-volume commercial rideshare service in 2021.

Nowhere in that announcement, however, did Ford mention anything about partnering with existing rideshares.

“Ford didn’t say specifically if they are going to use Uber or Lyft, or develop their own software,” Sam Abuelsamid, senior research analyst at Navigant Research’s transportation efficiencies program, told Mobility Finance.

This raises a question: What will be the role of rideshare giants, when autonomous cars begin roaming the public roads?

“I am not sure that the ride-hailing companies will necessarily exist as standalone entities a decade from now,” Abuelsamid said. Rideshares spend most of their capital paying drivers, but when they transition to autonomous, there will be a much higher cost to cover.

“They will need to either buy or build vehicles, which is going to be a lot of capital expense, so it’s not clear that transitioning that way is going to be a viable option for those companies,” he said.

It is more likely that each one of the rideshare companies will get absorbed by an OEM.

“Whether it’s Didi Chuxing in China, Uber and Lyft here, or Gett in Europe, you’ll have a vertical integration, where you’ll have a [single] company that develops the tech, manufactures the vehicle, and then provides the service,” he said. That will allow OEMs to keep revenue streams in-house, while rideshares will be able to leverage their software with higher efficiencies. “It also gives OEMs the advantage of controlling the hardware through the life of the vehicle, making sure it’s properly maintained and serviced,” he said.

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One thought on “How Rideshares Will Blend Into OEMs When Autonomous Cars Go Mainstream

  1. I agree with the insight that auto OEMs will be the ones to power their own services. They will differentiate them with the vehicles and through different service value propositions in the same way airlines are different and we can support multiple brands of airlines even though essentially they all offer the same thing. A seat from one city to another. Where I disagree, is Annabel Chang’s statement that these autonomous platforms are easy to built. I work at Ridecell, who make an intelligent platform for carsharing and ridesharing and I can assure you that these are complex beasts. We have been refining ours since 2009!