Uber’s robotaxi push may be the next step in a sinister pattern

If you ask the likes of ARK Investment’s Cathy Wood and Tesla’s Elon Musk what the future of mobility would look like, they’d probably say one word: robotaxis.

It’s very easy to see why.

Companies like Google (GOOGLE) Waymo and General Motors (GM) Cruise gave ordinary people a glimpse of a future that would only have been a reality in the best science fiction movies and TV shows: one where humans don’t have to drive.

Simply put, an app allows them to call a self-driving car to take their passengers to their destination.

A new landmark partnership would make this easier, but it also raises concerns about the people it leaves behind.

A cruising driverless robot taxi is seen in operation in San Francisco, California, USA

Anadolu/Getty Images

Uber’s robotaxi pivot

Uber (UBER) unveiled on Aug. 22 a “multi-year strategic partnership” with Cruise to offer rides in its self-driving vehicles through ride-sharing app Uber.

Starting in 2025, Uber users will be able to ride in one of Cruise’s self-driving Chevrolet Bolt vehicles for “qualifying trips.”

The Cruise adventure isn’t Uber’s first foray into the world of autonomous vehicles. The multinational tech and transportation company is also partnering with Google’s Waymo to offer self-driving rides and even took a ride on its own Uber-branded robotaxi in 2022.

The reason behind this partnership, according to both Uber and Cruise executives, is to extend the reach of autonomous vehicles to as many people as possible. By partnering with Uber, Cruise can cast the widest net for potential customers.

“Cruise is on a mission to leverage driverless technology to create safer streets and redefine urban life,” said Marc Whitten, CEO of Cruise. “We are excited to partner with Uber to bring the benefits of safe, reliable and autonomous driving even further. people, unlocking a new era of urban mobility”.

In a statement to Gizmodo, a spokesperson for Cruise said that the first city with robotaxis that can be hailed through the Uber app will be either Phoenix, Dallas, or Houston.

Uber vs Taxi vs Robotaxi: the evolution of commuting

Cruise and Uber’s partnership comes as the GM-backed robotaxi business is making a comeback.

Cruise’s license was previously suspended in California following an October 2023 incident in which a self-driving vehicle hit and dragged a pedestrian walking in San Francisco. As a result, the firm has temporarily shut down its robotaxi operations, restarting with supervised rides in Phoenix, Houston and Dallas in June 2024.

Uber’s partnership with the two biggest names in robotaxis presents an interesting dilemma in the grand scheme of the future of transportation.

Uber and other ride-sharing services like Lyft have inadvertently replaced the taxi in big cities like New York, where its 13,000 medallion drivers compete in a sea of ​​more than 100,000 drivers for ride-sharing apps .

Throughout its existence, Uber has fought with its drivers in several cities due to its business model of misclassifying its drivers as independent contractors rather than employees.

But with robotaxis, drivers are cut out of the equation.

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In the summer of 2023, taxi drivers and ride-hailing app drivers in Uber’s hometown of San Francisco spoke out against Waymo and Cruise’s expansion into the city, saying they add competition and cut into their earnings at a time when costs of being a taxi driver or rideshare driver are on the rise.

Jose Gazo, an Uber driver of seven years, told the San Francisco Standard in June 2023 that he finds himself driving more hours and making less money.

“We’re already seeing it,” Gazo said. “If business goes this way, we’re going to be homeless.”

The California Public Utilities Commission on August 10, 2023 granted Waymo and Cruise the ability to operate 24/7 with an unlimited fleet of vehicles in all areas of the city.

Before the measure passed on a 3-1 vote, CPUC officials listened to six hours of public comments, including from Rosine, an Uber driver in San Francisco.

“If you allow self-driving taxis to expand, it will take jobs out of families. I’m a single mother,” Rosine told the BBC.

However, experts believe that this concern is overblown.

“These things are expensive. Waymo’s cost of the entire vehicle … is about $300,000. That’s not going to financially replace a driver any time soon,” he says @emilmichael about robotaxis. pic.twitter.com/vuKGsoorsD

— Last Call (@LastCallCNBC) June 24, 2024

In a June 2024 appearance on CNBC’s “Last Call,” former Uber chief business officer Emil Michael argued that there are practical and financial barriers before robotaxis from Waymo and Cruise can effectively emulate something like Uber.

Federal regulations limit manufacturers to 2,500 driverless cars per year, which may limit the number of vehicles that can hit the streets.

“It’s always around the corner, but it takes longer than people think, Bryan, because of the regulations, the cost of vehicles that do it well, and also enough density of driverless cars in any city to make a ride of 10. minutes or less to your door when you order one,” said Michael.

“And these things are expensive. Waymo’s cost of the entire vehicle, with everything spinning on top of the car, is about $300,000. That’s not going to replace a driver financially any time soon.”

Uber Technologies, Inc., which trades on the New York Stock Exchange as UBER, was up 1.35% at the closing bell, trading at $74.30 per share at the time of writing.

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