Hacker News Reader

Comment by yumraj | Hacker News Reader

This.

Basically while there are network effects in the sense that any provider (Uber, Lyft etc.) will need to have some critical mass before there are enough drivers and enough riders, both can subscribe to multiple providers and there is no long-term stickiness at the moment.

In other words, this is not a winner take all market with FB/LinkedIn/Twitter type network stickiness and the overall market is still fair game. The driver's rating is the only sticky data, and it is unclear in this context as to how valuable that is as riders are not going to wait an extra 30mins to get a 5-star driver vs. a 4-star driver.

This should not come as a surprise to anyone since right now most metros have multiple competing taxi service providers, so it makes sense that that may be replaced by a similar multiple mobile-app taxi providers.

Also, it is difficult to re-paint your taxi when you move from one traditional provider to another, in the Uber/Lyft/etc. world, that is no longer required, so provider switching or aligning with multiple providers is trivial which will imply that in future the providers' margins will be squeezed out and riders and drivers will keep the most benefit.

View on HN

I don't see how there's any network effect to be had. Consider food delivery. I use both seamless and delivery.com. Seamless is a little better and has a wider network of restaurants. But I have 0 lockin and will frequently switch to delivery.com for any exclusive restaurants they have. I have an account on grubhub too although I use it rarely. There's nothing tying to me to any of them. No friend list, no thousands of photos. Just my recent orders which are of limited value. Taxi service is the same. The second that Lyft has lower rates or a close car, everyone will switch in a second. Or flock to option 3 the second it has any advantage.

How would you say self-driving vehicles fit into this? Supposedly they're rolling out in ~3-5 years, and with self-driving vehicles, you no longer need the middle man managing a fleet of contractors.

EDIT: I'm willing to me a Long Bet [1] with anyone regarding fully autonomous self driving vehicles in regular use in 6 years.

[1] http://longbets.org/ ; http://longbets.org/rules/

Self-driving vehicles are the final commoditization of the rides-for-hire business. Personally, I'd be very skeptical about the 3-5 year time frame, but clearly they're coming at some point. When they do, I can't see any rides-for-hire business having gross margins higher than 5% (though the size of the rides-for-hire market may well expand greatly). Barrier for entry is basically nonexistent.

Scale and perks will drive that 5% up, I imagine. Sure, Joe Average can buy a Tesla Model A (for automatic, obviously) and have it operate as a AI-Uber Driver, but Uber can buy a fleet of thousands, allowing them better pricing, better access to charging stations, better data about which rides are most valuable and where to position their cars. With a bit better margins comes things like bottled water in the cars. This differentiates them further, etc.

I used to think otherwise when Uber first hit the scene, but now I'm willing to pay the premium to own my self-driving vehicle to control my mobility.

and then they will add "driving attendants" attractive people to serve you the drinks etc on your trip

Someone will still need to manage the fleet of self driving cars. Who is going to fill them with gas, do routine maintenance, clean them after some drunk dude puked all over the back seat, etc?

If they're electric vehicles, they'll charge on their own based on closest charging station and the cost of electricity at the time they need their charge. Also, the only maintenance you'd require would be tire rotations/changes every ~5K miles, and a new battery every 150K-200K miles (Tesla automated the battery pack swap, I'm sure they could automate pulling four wheels off and bolting four new ones back on).

I agree someone is going to need to clean them out though.

Heck, they won't even need to plug in once we get wireless, inductive charging stations or inductive roads. Both are coming.

You could outsource the car cleaning with an agreement at any full service car wash.

One doesn't even need a physical presence anywhere to make the business work.

They already have wireless charging for electric vehicles:

http://www.pluglesspower.com/

While high-capacity electric vehicles like a Tesla wouldn't be able to wirelessly charge, it should be trivial to build a physical dock they can connect to with no human intervention (similar to how SpaceX designed the DragonEye mating connector for autonomous mating to the ISS).

I'm well aware. I was referring to public charging infrastructure using wireless charging. This is almost non-existent due to the lack of compatible vehicles today. I understand that some electric buses are already using wireless charging in major trials.

Reliable wireless inductive charging for cell phones doesn't even exist. I imagine an inductive charger for a car would function very well as a harddrive eraser as well, especially in 'inductive road' form.

There will be significant power losses (10-20%) and alignment issues.

One thing I really like about the whole inductive road concept is that it totally removes the need for a battery, one of the most expensive parts of an electric car.

You'd basically have a full-size slot car (if you remember those) track (but without sliding contacts).

We have self-cleaning public toilets, and automated car washes. I can certainly see an down-market option where the cars are cleaned automatically.

Autonomous vehicles that can navigate city roads and do not require any driver behind the wheel are most certainly not 3-5 years away.

Tesla is indicating they're prepared to offer full auto-pilot (Level 4) self-driving cars in 3-6 years.

http://www.greencarreports.com/news/1094329_self-driving-car...

By which you mean they already exist today? My parents got a demo ride in one at a google event earlier this year. As long as the city involved is Mountain View, the vehicles already exist.

(Google's current effort relies on extremely detailed mapping of all the roads involved, but given the continued existence of the StreetView program that approach probably scales tolerably well.)

Mountain View doesn't really qualify as a "city" in the sense of city traffic. The roads are wide and not particularly densely packed. Not to downplay the accomplishment, but it's probably a long way from being able to handle San Francisco let alone New York or London.

~3-5 years is way too soon. The technology might be ready but the governments (think regulations, traffic laws, car insurance companies, car manufacturers, etc etc etc ) in addition to the public (which is not ready either). Is going to take at least 10+ years for it to resemble something like you imagine it.

The technology is not nearly ready. Not in a city. It's like flying drone delivery. Easy to demonstrate in a single controlled setting, but nearly impossible to actually implement in the real world.

It's hard for me to even imagine how a self-driving car could manage somewhere like large swaths of Manhattan where a certain amount of, umm, aggression is needed to make any forward progress. Though it will likely happen some day (probably multiple decades from now).

As it is, I'd even settle for voice control on my phone that could reliably understand me.

> a certain amount of, umm, aggression is needed to make any forward progress

They added a slight "aggression" back in 2011, if other cars aren't letting it out it starts pushing forwards a bit:

> Sometimes, however, the car has to be more "aggressive." When going through a four-way intersection, for example, it yields to other vehicles based on road rules; but if other cars don't reciprocate, it advances a bit to show to the other drivers its intention. Without programming that kind of behavior, Urmson said, it would be impossible for the robot car to drive in the real world.

http://spectrum.ieee.org/automaton/robotics/artificial-intel...

I really don't understand why people think small behavioural differences like that require decades of work. Things that humans find difficult and stressful are likely to be the things that are significantly easier when you have a reaction time measured in milliseconds and full 360 degree vision.

I hope you're right but the very uneven progress of AI generally--especially when it involves real world interfaces--makes me skeptical. As I wrote elsewhere, even voice recognition is very much still a mixed bag.

But voice recognition is something we take many years to learn, even when are brains are highly plastic. I find it hard to understand people when they speak often. We disambiguate heavily based on context and expectation, very complex issues.

Oh, I fully agree. The fact that it's been the subject of so much research and remains only very incompletely solved demonstrates just how difficult a problem it is. I'm just saying that navigating a potentially dangerous machine through a physical world populated with erratic human beings is also very complex and difficult--albeit probably far less so in some contexts (limited access highways in good weather) than others (Manhattan, Boston).

It's not really like flying drone delivery. Flying drone delivery is far simpler and far closer than general use self-driving automobiles.

Actually landing UAVs is far harder than automatically parking a car. The driving vs flying after take off is what is easier. Landing and take off.. nope.

Note that drone could mean a car in this case. UAV being an unmanned aerial vehicule.

With a modest infrastructure of marked landing pads on roofs, I think UAV landings are easier than automated car parking. If you're expecting delivery UAVs to fly under the tree line along sidewalks and yards to land directly on a residential porch, then yes, that's extremely difficult. But I highly doubt that this is a remotely feasible plan within a decade or so.

I agree that 3-5 years is a bit optimistic but I also bet that when it does happen it will transition far faster than we can imagine. You have a really nice set of aligned incentives here:

- As a 'driver' I get a car that let's me free up large chunks of my time - As a company like Uber the driver 'input' to my model is now far more consistent, predictable, and inexpensive - As an insurance company I can start undercutting my competition by charging less to insure this substantially safer means of transportation while still pocketing a nice margin - As a car manufacturer I now have an extremely compelling reason to sell cars to people that would otherwise wait between 4-6 years in between car purchases - As a government I can (if I'm smart) try and pass laws that will result in drastic reductions in accidents, deaths, etc... I'll also likely be bringing in a lot of business and money by being on the leading edge of this (less traffic and congestion, new opportunities for businesses that leverage these cars, etc...). Whatever revenue I lose in traffic tickets I can make up for in other ways (like a reduced need for traffic enforcement).

As soon as any of the above are able to make/save money this is going to snowball.

The lobbying power and influence of the teamsters and taxi unions is probably the single largest hurdle but if self driving cars are as safe and cheap as it appears they will be this will be a speed bump, not a roadblock.

I'm not so sure the future is as bright as you make it out for all those groups. At the very least this change is going to bring with it a mountain of uncertainty.

As a driver, you probably lose your job. Not with the 3-5 year out model, but the one that comes 10 years after that. Even with the 3-5 year model, suddenly the competition for your job becomes extremely tight and starts to focus on things like people skills and entertaining, since the automated car will be doing most of the "heavy lifting" most of the time in a way that is automated into a commodity.

As Uber, you save a lot of money but you also lose a lot of moat, it becomes much easier/cheaper for other companies to suddenly field a fleet of cars.

As a car insurance company things look really iffy for you, again not so much in the 3-5 year timeframe but a bit further out when the human is completely unnecessary since at that point the insurance will be more about insuring the companies making the cars and car software and less about personal insurance, which means there is still significant money to be made, but probably far less than now (if the safety of automated cars turns out to be as great as it should) and by far fewer players.

As a car manufacturer, you'll do well at the beginning but the eventual model of a networked driverless transportation system should require far fewer people to own fewer cars and still live as if they do own cars, which is a long term problem for you when you've built a business optimized to sell cars to broad market consumers on a 5-ish year cycle.

As a government you should, in an ideal world, be in pretty good shape for the reasons you outlined, but good luck dealing with the lobbyists from industries this may "disrupt".

I do think driverless cars are quite a bit closer than most people think, for a lot of reasons, I just think they are going to upset a lot of applecarts on the way in, which isn't necessarily a bad thing unless you're an applecart vendor.

Self-driving cars in a city environment are like flying cars. Sounds kinda plausible, but the tech is always going to be 20 years away.

Google is closing in on over a million miles with no accidents, and have decided to focus on refining their intelligence for city driving. 6 years tops.

In 2004 the first drive less car race was held. The best car made 11km. I thought that was an amazing effort, and in 20 years one might finish.

It took one year before the race was finished.

It's clearly Uber's plan to replace all their drivers with self-driving cars in the future - I think they've even said so themselves. But even six years is a long time for a VC-funded business.

And what does "regular use" mean? That seems like the critical component of a bet like this.

"Regular use" is defined as you being able to hail one to take you at least 30 miles for ~$50, from either a mobile or webapp.

If anyone can buy a self-driving vehicle, Uber and Lyft are aberrations, as anyone (even FedEx and UPS) could provide self-driving vehicle livery services. Its no longer a marketplace business; its a fleet management business (and both UPS and FedEx are extremely capable at managing capital expenditures, fleet operations, and system capacity).

In how many metro areas, though? Surely also a huge factor in "regular use".

Excellent question. Let me noodle on that over a beer after work. I want to say 5 (SF, LA, CHI, NY, ATL), but its a very subjective metric.

I think we'll see at least two main car providers in major cities plus some niche operators, then one major network that allows you to buy your own car to be committed to a pool as an investment.

Do you think we'll see public transit orgs (for example, PACE/CTA in Chicago and its suburbs) purchase their own self-driving vehicles to provide transit services?

This isn't just a city issue, but a country issue too. Vulnerability to both economic sanctions and espionage should be real concerns. You can take a look at the companies operating in Israel for an example of a market this would be an immediate concern. Likewise for companies operating in Washington DC. There are politicians and lobbyists regularly using Uber. Would this DC audience want to use Yongche, Kuaidi, or another Chinese service?

Another interesting consideration is who is building and selling these automated vehicles. Hypothetically a future Google building vehicles could acquire Uber and now they own the entire value chain.

A company such as Google could earn a substantial piece of the rider's revenue from advertising which would make it hard for competitors much like Yahoo & Bing under earned Google on search inventory. At that point it becomes very hard for competitors. Does ad based earnings sound unreasonable? Consider that companies, such as Delta, already are bidding their organic listings down on Google. They rank #1 for their name yet still buy the inventory. You could jump in the car and say KFC -- and KFC pays Google for the ride. Or you say "fried chicken" and Google gets even more money to take you to the nearest KFC (or may be Popeyes in that case.)

Secondly, consider additional activities in the vehicle. A car build to drive itself is going to be configured differently than a manned vehicle. May be a Facebook car arrives and you strap on the complimentary Oculus headset.

I don't know what it is, but don't discount the ability of a self driving car service to substantially differentiate itself beyond competitors in the future.

Any of these options will make it extremely difficult for public transit to compete. Certainly cabs are done without gifted monopolies. (Also worth considering if a self-driving cab company can retain any political power without having a fleet of human drivers)

Whether or not Uber is overvalued, they are taking the money. Probably the better choice. The US stock market keeps hitting highs, at some point there will be a drop, or may be a crises with junk debt (very low yields just like 07) and it is going to be a lot more difficult to raise money over night.

I think the 'self-driving' feature of the car will be more like an autopilot - you'd still need a human at the wheel to occasionally override the system.

Hence, I see the self-driving car to be more of a competition to short-term rentals like Zipcar. In situations where you don't want to drive (have to work/talk on phone; after a you've had a few drinks etc), you'd still need a driver.

That may be the case at first, but I can guarantee you will not still need a driver forever.

Of course, but that kind of shift isn't going to happen within 6 years (as parent comment suggests)

I think we will see self driving cars in regular use that do not require an attentive driver on the freeway within 6 years. I think self driving cars will put Uber drivers out of business in 10 to 20 years.

Even if the technology becomes publicly usable (stretching it), there are bigger obstacles - government regulation and fear mongering - that make me think it will not happen in this timeframe.

I'm super excited for self-driving cars - they're literally going to change the world in dramatic ways. It's sort of mind boggling once you start really thinking about the implications of it.

You may as well pose it as "what if we invented teleportation?" Many of the end results are going to be similar.

Consequently, the cost of a ride will approach the level of direct costs like fuel and maintenance. There won't be much left for driver compensation or vehicle depreciation, much less a durable surplus for the network operator.

Paradoxically for the disruptors, the way out of this trap is for Uber and Lyft to lobby for greater regulation, stringent requirements for insurance and liability, background checks, safety inspections and government licenses. They need higher barriers to entry.

They need to carve out a space safe from competition, or it will rapidly devolve into a lowest-common-denominator market.

Not that there's anything wrong with that.

Companies like Uber and Lyft operating without as stringent regulation as regular taxi companies is their main competitive advantage (AirBnB is in the same group).

Taxi drivers have lobbied for years to build up the kind of economic protections they have from disappearing margins in a competitive marketplace, and consequently being a taxi driver meant you could make a middle class living without tortuous hours.

Uber comes along and operates without the limitations of those protections and drivers earn less. Ultimately without intervention it puts a whole industry of people on a trajectory towards poverty, and this is before we even get to self driving cars.

What are we going to do with everyone who gets forced out of their middle class jobs?

I would argue that it has been a long time in the USA since a taxi driver could earn a middle class income driving. Medallion fees basically make them indentured servants.

If that's the case, why would anyone do this by choice? You could just work for McDonalds and make just as much money for less effort.

Taxi drivers are usually contractors, so it's easier to get a job (sometimes as a sub) and its easy to avoid taxes. Think of it as a waiter job without the need to communicate well. Also, because of the off/hours nature, it's a good second job.

Because you have networks of contractors, you can lever social ties to get a job... This is especially important for immigrant communities.

Please spend an hour in traffic, and then an hour In your kitchen -- cooking for a hundred people -- and tell me what is less work.

Surely they want to take the money now and use that to fund being first to market with the self-driving vehicles. Then they retain the customers but drop the drivers and build a new lake in which to swim in their money.

They can ride the transition period then at least before any serious challenger can take the market.

In theory .. I don't see them lasting long enough to meet the new tech before they implode.

You know what would be interesting is that municipalities should see this as an opportunity. What if the city were to start their own modern municipal taxi services, and compete directly with Lyft/Uber....

Then they get revenues.

I'm not optimistic about municipalities running anything efficiently. However, this would provide great opportunities to get rid of public transit as we know it. Private sector rides could simply be subsidized for low income users. How much more convenient would this be vs taking the bus?

Sure, but maybe some scrappy startup could go to municipalities and try to offer it as a service to them under contract.

Then use that to grow out and manage it for other cities a well.

A municipality can't write a check every year to a white label service that sits between its citizens and the self-driving vehicles, maintenance facilities, and charging stations built to provide automated mobility?

My city provides roads, fire, police, and other services in a pretty efficient manner. If yours doesn't, I suggest you campaign for more transparency.

> My city provides roads, fire, police, and other services in a pretty efficient manner.

Mine doesn't. I saw a ladder truck, a fire engine, and multiple other vehicles show up when one guy passed out and need medical care.

That's not inefficiency. That's precautionary, and SOP in most first-responder units. Rarely do first-responders know the extent of what the situation on the scene is going to be before they get there. Diesel and miles on the truck are cheap, and peoples' time is a sunk cost.

Don't take my word for it though, the Mayor of Provo answered the question much better:

http://provomayor.com/2011/03/04/why-do-we-send-a-fire-truck...

"I’m often asked why we send a fire truck on every medical call. Does it really require an ambulance and a fire truck for many of the minor injuries? It seems a waste to drive a very fuel-inefficient fire engine to something where the additional personnel are not needed.

While there are some calls for emergency medical assistance that can easily be handled with just the two personnel on the ambulance, there are many that require additional help. Nearly every EMS system sends a unit to “back” the ambulance for a number of reasons. First, nearly every life threatening emergency incident is best handled with at least two paramedics in addition to the driver. Second, there is not always enough reliable information on the patient condition to determine if additional help is needed. Valuable time may be lost if additional personnel are not dispatched until the ambulance arrives and makes an assessment. Finally, even so called “routine” medical calls often require the patient to be lifted into the back of the ambulance. Even if the patient is not obese, it is safer for the patient and for the backs of the medics to have additional help to lift.

When the fire truck is not needed on an incident, it is released to go back into service as soon as possible. The cost of the fuel to have the extra help immediately available when it is needed is a small cost when compared to the loss of precious minutes when a life is on the line."

That explains 2 of the vehicles. It still does not explain the ladder truck or the fire engine.

> Diesel and miles on the truck are cheap, and peoples' time is a sunk cost.

Is a fair point. That ladder truck exists just in case an earthquake breaks the water lines and sprinklers stop working. I still do not see my city (or many others) as shining examples of efficiency. This does not mean I want to privatize things like fire departments and police as that would has its own issues, but neither do I think cities are so efficient that we should have them handle more things.

The people and equipment have to be ready in case of a large emergency. In the absence of one, sending them along on an easy call is practically free.

> My city provides roads

My city (or well my old city) Chicago takes 12 years to resurface a road. That's not efficient.

I too lived in Chicago for most of my life (recent transplant to Tampa). Not all cities are inefficient, and those that are require more citizen activism and transparency.

This.

Reply on news.ycombinator.com