Driverless cars will be reality over time. This will take decades to happen though. My question is will uber be able to make it work? And if so will it result in better prices for the consumer? Ubers current buisness model is as a software technology company. They make an app and are responsible for marketing thats it. Uber does not own fleets of cars, and or the support staff like engineers and mechanics to maintain them. Uber does not need to worry about fuel/electricity or employee drivers. Uber also has a much smaller insurance liability since they only need to cover their passengers. They do not have to worry about vehicle or the drivers insurance liabilities. The driver is responsible for providing the primary physical and labor capital for this whole enterprise to work not to mention the risks. Ubers surge model of pricing also helps create equilibrium in the market making sure there is adequate supply to meet demand.
In a world of driverless cars Uber would need to pony up the capital for millions of driverless cars each probably costing 100k or so. Uber would be 100% responsible for the mainatanenece, fueling, repairs, and insurance. Thousands of engineers, mechanics and other service personnel would need to be hired to maintain these company owned vehicles. Uber would also be exposing itself to much greater risks in terms of liabilities and market fluctuations. Ubers buisness model works so well because it is their driver partners who assume capital costs, risks and liabilities. Uber as of now makes money regardless of what happens just as long as someone uses their service.
In a world of driverless cars Uber would need to pony up the capital for millions of driverless cars each probably costing 100k or so. Uber would be 100% responsible for the mainatanenece, fueling, repairs, and insurance. Thousands of engineers, mechanics and other service personnel would need to be hired to maintain these company owned vehicles. Uber would also be exposing itself to much greater risks in terms of liabilities and market fluctuations. Ubers buisness model works so well because it is their driver partners who assume capital costs, risks and liabilities. Uber as of now makes money regardless of what happens just as long as someone uses their service.