Robotaxi services are growing widely. They’ve had some issues in San Francisco, as I have when driving in San Francisco. But these challenges are improving. Both Uber and Lyft are now taking steps to replace their drivers with AI.
We could be witnessing one of the largest AI job replacements ever. This will solve a major problem with ride-sharing, by aligning the revenue with users. It won’t solve a bigger problem ride-sharing shares with social media – namely, a business model that is decoupled from the users.
Let’s talk decoupled revenues. We’ll end with my Product Of The Week, a notebook that is both new and amazing from Lenovo. It features a brand new processor from Intel.
The Problem with Decoupled Revenue
Both social media and ride sharing have the same problem: the people who pay for the services aren’t treated like the primary customers.
Social media platforms are funded by advertisers, but the users interact with the content as though they were their primary customers. The platform allows car owners to make money from their vehicles through ride-sharing. However, this is a cost associated with the service. The platform should not be the customer of drivers since riders pay.
The platform treats those who generate revenue – advertisers for social media, and riders for ride sharing – as valued participants, while those who are the backbone of the service, like content creators and driver, are treated more as cost centers.
The decoupling of the two services means that people who are responsible for making it possible, like Uber/Lyft users and social media users, are often forgotten. They are often subordinated by the entities that provide the funding. This includes advertisers on social media, and Uber/Lyft riders. Social media content creators, like ride-share drivers, are often treated as problems that need to be managed instead of as assets.
Both conditions must be true. Advertising revenue is driven by users because ads are useless without users. If there are no drivers, then there’s nothing for riders.
This distinction is often missed by managers. I knew a general manger who claimed that his plant would be much more efficient without the sales reps messing up things — forgetting that they were the ones responsible for the plant’s business. This general manager was promptly fired for being an idiot. But this was not a one-off situation. As an internal auditor, I found it surprising that many senior executives did not seem to understand how things worked.
Businesses function better when both the users and the funders of a service are the same. Platforms risk alienating their users when revenue and usage are separated, such as in ride-sharing and social media. Don’t mess around with your revenue source.
Will robotaxis disrupt or fix ride-sharing?
Robotaxis could either fix ride-share, or break it. Uber and Lyft will be forced to offer robotaxi services. This means that people who use the service to monetize cars may have to accept a job for free or work almost as much. This would eliminate the issue of drivers being treated as a cost centre rather than customers. Uber and Lyft will be able to focus solely on their riders, who become their customers.
These services are now considering allowing car-sharing owners to remain with them, but purchase and maintain their autonomous vehicles, which would allow them to recoup a large portion of revenue. This could be similar to a B&B, but the added hurdles of maintenance, liability, and insurance are more difficult with cars and trucks.
We don’t yet have any automated charging stations that these cars can use. The charging infrastructure is crucial if autonomous cars are to operate independently. Solutions like robotic battery swaps or robotic charging are still being developed.
Uber and Lyft are likely to choose to install their own fleets, unique charging ports, automatic charging stations, as well as stand-by parking to accommodate the typical fluctuations of demand during the day.
At First, There Would be a Blend
Robotaxi technology is currently only suitable for urban areas. If the rider is going to be traveling a distance, a driver will still be required until autonomous driving technology can operate between and within cities.
We may even see some integration of autonomous cars with airplanes to provide service in a particular state. Some of the aircraft that are being considered have VTOL capabilities (vertical takeoff and landing), allowing for the possibility of more localized landing pad locations where passengers could switch from an autonomous car to a plane.
concepts have also included the attachment of an autonomous lifting body to a car to allow it to travel further or bypass traffic. It would be neat, but safety concerns may prevent people from using it. Many years ago, I remember a Flying Car based on the Ford Pinto. The wings and the car fell apart while in the air, killing the founders of the company.
Wrapping up
What happens to Uber and Lyft’s drivers who are displaced by robotaxis? Tesla is looking into this possibility. In some cases, some drivers may be able to work remotely and guide a robotaxi to safety or repair stations when it gets stuck. This would mean fewer drivers, and only a few would have jobs. The rest would be unemployed.
The problem of what to do about the workers who lose their jobs as AIs take over these tasks will become more complex. What will happen to drivers or pilots when vehicles are able to drive themselves or fly themselves? You can’t just switch them all to robot trainers. There are now more pilots and drivers than we need.
We users will be able to enjoy a more convenient experience with lower prices and better service. There will also be less worry about your driver being a serial murderer. (I watch too many police TV shows!) The conversations will be less interesting. Although, since generative AI is conversational you may be able talk to your car while driving. It will also be less likely for it to abuse drugs or read messages rather than focus on the road.
This will solve the revenue decoupling problem.
