Ride-hailing companies will grow eightfold by 2030, dwarfing the taxi industry: Goldman Sachs

CNBC ^ | 24 May 2017 | Anita Balakrishnan

[Lorianne]

Ride-hailing will grow eightfold by then and could be five times the size of the taxi market, justifying the giant valuations, the report said. At $68 billion and $50 billion, respectively, Uber and Didi are the two most highly valued venture-backed companies, according to data firm CB Insights.

Central to the growth of this industry, according to Goldman Sachs, is the proliferation of self-driving cars.

[Lorianne]

Maybe this is so and I just don't have the foresight to see it ... I'm probably permanently stuck in self-drive.

[gaijin]

Gummint records of:

Everything you bought
Everyone you texted, called, emailed or chatted with
Everywhere you went

A digital PARADISE for a socialist busybody.

“THIS time we’ll get it right.!!!!”

SURE.

[GnuThere]

I was kind of out of the loop on this and thought it seemed like something for younger people, but used Lyft for the first time on a trip to Denver when my friends said it would be about 30% less than cabs.
It worked out fine, with all of the drivers arriving pretty quickly - the only driver that worried me was one who had to rely on GPS to go a few blocks down the street, ha.
So I’m a late adopter for sure, but will probably use it in the future.

[kvanbrunt2]

well not the self drive stuff. but my brother laid off — now drives for uber. i use them for various transports. the most is when i leave my truck in the burbs to get worked on and get a drive home for 25 bucks. cab would be 50-75. i think bro was flashing $200 plus for a day and he leases the car from uber. and he does work at it. my drives have always been super.

[kvanbrunt2]

your complaint is based on your use of your cell phone?

[kvanbrunt2]

your complaint is based on your use of your cell phone?

[socialism_stinX]

As a former software developer, I think it will take much longer than some people expect to develop autonomous vehicles that can drive on all kinds of roads in all weather conditions. Assuming that the rapid adoption of PCs, internet, and smart phones will also happen with autonomous vehicles seems to be false logic. That is because autonomous vehicles will need to have essentially perfect driving performance to avoid class-action lawsuits by accident victims, which could easily bankrupt the manufacturers of these vehicles. While for example, if 0.1% of smart phone calls fail because they’re dropped or the sound is unintelligible, that is acceptable performance in many areas. But if even 0.01% of trips by autonomous vehicles result in a collision, that would be disastrous for the vehicle manufacturers (not to mention the passengers of the vehicles). So I think this is a very rare case where financial people are actually over-estimating the capabilities of scientists and engineers. I would bet quite a lot that fully autonomous vehicles won’t have more than a 5% market share in 20 years, and that will be mostly in controlled environments in inner cities where they may replace most taxis.

[adorno]

"We model a scenario in which a fleet manager could generate profit of $14,000 per car over three years, nine times what [a manufacturer] currently makes from selling a car,"

Problem for the current ride-hailing services, such as Uber and Lyft, is that, they won't even be in the loop in the future.

Once ride-hailing becomes serviced by autonomous vehicles, a large part of the consumers who purchase cars won't be purchasing them anymore, and will be hailing those autonomous vehicles as the need arises.

So, if the automakers end up not selling cars or their sales volume decreases to the point of their near extinction, THEN, those automakers will have no choice but to become ride-hailing services themselves, which could mean that, once they become the fleet operators themselves, they might decide that they can cut out selling vehicles to Lyft and Uber and the other ride-hailing services, which would then cause those companies to close shop. IOW, we could end up with the automakers becoming the flee-operators with their own vehicles doing the servicing.

I wouldn't put my money on Lyft or Uber or any other "non-manufacturer" ride-hailing service. In the long term, they might not be there.

[central_va]

Another problem is that rob cars will feedback themselves into gridlock trying to maintain separation.

[socialism_stinX]

But if your ride home is long enough that it costs 50 bucks in a cab, then how can ride-hailing drivers make any money by only charging 25 bucks? I’m wondering if these companies are relying to some extent on faulty cost accounting by vehicle owners, who may not be adding in the entire cost of ownership including depreciation, maintenance, and insurance costs. I haven’t looked at this in any detail but I’m wondering how these companies can beat cab prices by such a large amount.

[adorno]

I think you're being a bit too pessimistic about autonomous vehicles. There already are a bunch of vehicles on the road with self-driving capabilities, and once fully-capable self-driving comes about (in about 3-4 years), we will be seeing a quick trend by drivers/owners and taxi fleets and truck fleets and ride-sharing services and government fleets, towards adoption of those autonomous vehicles, where the totality of self-driving vehicles could then easily surpass 10% of vehicles on the road. After that, it would be like toppling dominoes, where the movement towards 50% or more of vehicles on the road would be of the self-driven type, in less than 10 years.

And then, with those vehicles being a lot safer than people driven types, and accident occurrence dropping to a tiny fraction of current incidents, insurance rates would come down dramatically, which would mean that, autonomous vehicle manufacturers could afford to insure those vehicles themselves, with no external insurance companies involved. IOW, there will be no chance at all of those vehicles bankrupting the automakers.

[socialism_stinX]

Good point, and another really tough technical challenge is passing slow vehicles on 2-lane highways. That’s a challenge even for humans with good eyesight. I wonder if some of these venture capital people have actually driven a motor vehicles on a 2-lane highway in the country in the last 10 years.
;-)

[bankwalker]

That’s why they need to constantly advertise for new drivers.

[Mears]

My older grandkids routinely use Uber——even overseas.

.

[Mr Rogers]

If an Uber driver accounts for all their costs, then they make almost nothing. At least, that is what I saw doing volunteer work on taxes...

[central_va]

Unfortunately those of us in the more rural areas will have to buy really expensive cars with sensors like a modern fighter jet. No thanks. This is a city thing.

[bigmak007]

Then I envision bipedal robot carriers that can transverse any terrain.....

[socialism_stinX]

I don’t think fully capable self-driving cars will exist in 3 to 5 years. It will be more like 25 years or more. The engineers are going to hit a wall in the next few years when they try to solve tough technical challenges like passing slower vehicles on 2 lanes roads in the country. That’s a very tough software development challenge and there’s zero room for error because any mistake can result in a fatal head-on collision. We might see fully autonomous vehicles in controlled environments in cities, where wifi beacons can tell the vehicles where they are at all times. Something like that might work, but there’s an astonishing number of situations that can occur out in the suburbs and in the country—things like frontage roads running right next to 2-lane highways with vehicles driving in the opposite direction on those frontage roads. That’s just one example; there’s so many situations and different kinds of road markings and weather conditions.

The litigation issue is complex. Autonomous vehicles could end up being safer drivers than humans overall, but when a human causes an accident, the victims can only sue that person and then his insurance company pays for damages. Those individual drivers generally don’t have very deep pockets so the damage payouts are generally quite limited. But auto manufacturers have deep pockets and the trial lawyers will go after them for billions of dollars if those autonomous vehicles cause numerous accidents, even if the accident rate per 1000 miles is much lower than the rate for human drivers. It’s a complex subject, but I think VC people are getting way ahead of themselves about fully autonomous fleets of vehicles.

[Persevero]

“If an Uber driver accounts for all their costs, then they make almost nothing. At least, that is what I saw doing volunteer work on taxes...”

100% correct.

Uber at their current rates is not sustainable.

They do not charge enough for their rides.

They are merely grabbing market share by burning through venture capital and subsidizing rides - heavily.

[socialism_stinX]

Did you tell those drivers that they were making almost nothing, and if so how did they react? I just find this subject interesting.