For now they delay this reality by subsidizing rides in order to generate business. In some cities like San Francisco, most incentives were removed and among my friends we all stopped using Uber (unless we really have to). It simply became way too expensive.
It will work, but the market cap is much lower than everyone thinks, and competition will be fierce once the subsidies go away.
edit: typo /s/extend/extent
It's difficult to put real numbers on it, but I'd say a good guess is Uber could drop its ride prices 10% or more from current levels and still turn a profit with driverless cars. Raising enough capital to purchase the vehicles initially would be pretty easy.
AVs are not coming soon, in any case. The consensus finally seems to e waking up about this.
1) Totally agree that Uber will not be the manufacturer of the first wave of true AVs. That's likely to be whichever manufacturer Waymo is partnered with in a few years.
2) The value you assign to AV-enabled Uber is going to be related to whatever value you assign their brand name, gathered data, platform maturity, mindshare, marketing ability, and cash pile. It's technically not all that difficult to spin up a competing dispatch service to Uber, but it is difficult enough and capital intensive enough that there are very few competitors in most markets. Notably absent are the potential AV manufacturers who would basically be starting from scratch unless they grabbed Lyft at a discount or something.
3) It's important to define what "soon" means and what scope you're talking about when making predictions about AVs. Waymo is legitimately looking like they will be ready to launch true driverless vehicles for taxi service in select markets and conditions in under 5 years.
Given the above, the question is can Uber last long enough burning cash every quarter and still remain a market force by the time it's in a position to leverage AVs? I don't think so, but I'm also not shorting the stock.
Many of us would probably like daily housekeepers, drivers on call, people to do home maintenance, assistants to handle travel and random appointments (e.g. taking car in for service), etc. (Child care of course if needed.) Sure, we might be fine doing some of those things ourselves just for variety or because they're essentially as easy to do ourselves. However, help on call would be great a lot of the time.
But most of us can't actually afford to employ the equivalent of one or two people full-time even at rates significantly less than we're paid. Some things can work out because of economies of scale--e.g. eating out frequently in dense cities--but mostly people can't afford to have every "menial task" done for them on a day-to-day basis.
Making things even less optimistic for Uber, IMHO.
In London, cabs are so expensive, even just looking at one is more expensive than 30mins Uber trip... In addition, unless you're in a very touristy area, your wait time for a black cab will be inversely proportional to how urgently you need it; in contrast, I can just magically summon an Uber with the magic wand in my pocket.
I'm usually in London a few times a year and I very rarely take a cab (whether black or minicabs); don't think I've ever taken an Uber there. Usually only if I need a very early run to the airport or if I have luggage to transport between two locations where transit isn't super-convenient.
London has a huge sprawl so walking doesn't really make sense. A few biking lanes but not really relevant for most commutes. Public transport is great if you can use it, which generally means if you want to go to/from Central London. Buses are notoriously unreliable and will "change destination" at a moments notice. Yeah, the tube map looks "dense" on the map but see above for sprawl. Good luck commuting in any direction other than radially (unless you happen to be near an Overground line, which is a big if). In addition, most tube lines are closed at night and many have repairs done over the weekend. On top of that, late hours attract drunk / rowdy people, so I often prefer to avoid them.
I'm fortunate to be able to use public transport for my normal daily commute, but I also often use other modes of transport (my favorite is bike, which public bikes make easy... again if you happen to find yourself near a station) over the weekend if I want to get anywhere "interesting".
I see Uber as an expensive convenience - my 'local' minicab company is usually cheaper but odds are I will wait 10 minutes instead of 3-4 for a car, and if I'm in another part of town I have to resort to Uber or finding another minicab company anyway.
Maybe split their focus in two: one on luxury (Uber Black already exists, after all) and on shared rides at the other end. I think Via has an interesting model here, using minivans to transport many more riders at once. Of course, the more passengers the longer your ride, but with enough demand and intelligent routing it could be worthwhile.
Minivan/microbus routes are pretty common in some places outside the US. It seems as if it would be possible with existing tech to have some sort of hybrid between bus routes and a door-to-door Pool model. Obviously you need some level of density and predictability but it seems like something that could be made to work, including in areas that don't really support conventional bus routes.
This model is far from new. It just has a nice mobile app frontend.
Does Uber publish data about SF? That could remove the speculation.
The typical American owns a car that is probably a number of years old and drives to the grocery store to buy food which they cook at home.
Yes, people in those cities are mainly rich Yuppies that don't mind throwing away money. Everywhere else I always try to remember that most people (70% I think) wouldn't be able to cover a 400$ unexpected expense.
Please be respectful while engaging.
So yes, taking muni for 2.50$ or using an electrical scooter for 3-4$ makes sense to me. Or even walking. If it's 2 miles that is about 20-30 minutes which ends up being the same time as a Uber.
When I did the math, if I lived in the city it would be cheaper to use rideshare everywhere and rent cars when needed, than to own a car.