But Andy Grove made a strategic shift to stop losing money, he didn't continue with the same business.
Just the other day I talked to the owner of a taxi company, going through their cost structure. We concluded that, if taxes are included, 90% of their costs can be reduced on a per-trip basis.
It was his opinion that it would make the most sense that the future is some sort of public-private partnership model where the cars are owned by the city, but operated by some SaaS company, in order to get rid of taxes and further reduce costs. Without that tax reduction, he said we would see a similar situation as airplane ticket costs in the EU vs US (3-10x price difference due to taxes). Cities with 5-10x lower individual transport costs would actually have a competitive advantage. In the US this problem should be compounded as cities aren't as much cities as big villages with people thinly spread out. Thos cost reductions become even more important.
It feels like Uber & Lyft are spending money on the wrong problem atm. This is just a transitionary stage in the transportation world.
Yes, and, like you, I think Uber & Lyft are wasting money in the wrong problem while the innovation landscape is quickly changing towards self-driving things.
This is a common misconception. Uber poached several engineers from NREC, which technically belongs to CMU, but for all practical purposes is an independent entity. And of their original ~40 engineers, not many had any real previous experience on self-driving cars. Almost all of the engineers from the DARPA Grand/Urban Challenges had already left (many went to Google). NREC had nothing to do with any of those competitions.
So what happened to CMU's self-driving car research department? Well, initially it was funded by GM. But it spun off into a company called Ottomatika which was later acquired by Delphi.
Uber hired a bunch of great roboticists. They didn't hire a team that had any real experience with self-driving cars.
Self-driving things are being built everywhere, so I don't see the competitive advantage they have in AI because they built an app to get a car! Two very different things.