Juggling Dynamite

Took a taxi out and an Uber back from an event last night.  Asked both drivers how they were finding business.  The Uber driver said business has been ok, but hopes volumes will pick up.  Taxi driver said slow, but still making enough to keep going.  He added: “Uber drivers are just slave labor, they don’t get it.”

The price for both ride types ended up being nearly identical, less than $9 for each trip (before tip).  The difference of course is that taxi companies have to self-sustain operations on their cash flow, Uber and the other ride-hailing start-ups are, so far, operating at a loss funded by their investors.

In the meantime, consumers are winning in the form of lower travel costs per kilometer than operating their own vehicles.  And that’s good, because transportation has been a big line item right next to shelter and food.  Consumers need to spend less and save more in every way possible today, and transport savings are ripe for the taking.

Rider volumes will no doubt grow, but so too are competitors in the space.  See:  Lyft Grows on Uber’s public stumbles. Profits will only materialize from monetizing the eyeballs and interests of passengers, while slashing operational costs like moving from ICE (internal combustion engine) driver-operated vehicles to electric and eventually driver-less.  (FYI:  the CEO of Shell just said his next new car will be electric).  The race is on.

See more on timelines, winners and losers in the race here in Rethinking Transportation 2020-2030:

The approval of autonomous vehicles will unleash a highly competitive market-share grab among existing and new Pre-TaaS [transport as a service] (ride-hailing)companies in expectation of the outsized rewards of trillions of dollars of market opportunities and network effects. Pre-TaaS platform providers like Uber, Lyft and Didi are already engaged, and others will join this high-speed race. Winners-take-all dynamics will force them to make large upfront investments to provide the highest possible level of service, ensuring supply matches demand in each geographic market they enter.

In this intensely competitive environment, businesses will offer services at a price trending toward cost. As a result, their fleets will quickly transition from human-driven, internal combustion engine (ICE) vehicles to autonomous electric vehicles (A-EV) because of key cost factors, including ten times higher vehicle-utilization rates, 500,000-mile vehicle lifetimes (potentially improving to 1 million miles by 2030), and far lower
maintenance, energy, finance and insurance costs.

The shared autonomous, electric vehicle revolution is a game changer for the world economy.

There will be big wins like less accidents and injury, less air pollution and congestion, higher efficiency and productivity as well as an estimated 70%+ reduction in transportation expenditures for consumers. More cash in the pockets of families is greatly needed to help reduce debt and increase household savings.

But there will also be some major disruptions to presently dominant business models in sectors like fossil fuels, vehicle manufacturing, gas stations, repair shops, parts, dealers, finance, insurance, road and garage construction and much more.

This changes everything.  Those who aren’t paying attention are likely to be broadsided.  See:  Why (and when) we”ll go from drivers to passengers.

The first fully autonomous vehicles are expected to go on sale by 2020, and completely driverless models may follow by as early as 2022, according to plans laid out by both Ford and Daimler.

The convergence of self-driving vehicles and ride-sharing services will do more than make commuting easier, according to a new study by computer tech giant Intel. It envisions these emerging technologies will transform the nation as radically as the arrival of the original automobile did early in the 20th Century — in the process creating a “passenger economy” that will generate revenues of as much as $7 trillion by 2050.

Also see:  As Self-Driving cars near, Washington plays catch-up and  Laws must be updated as driverless cars steer us into complex insurance minefield.

3D printing is another wave of innovation that is now evolving rapidly to dramatically increase efficiency in the supply chain by reducing the cost of production including labor, packaging, warehousing, transportation, fuel and more.  All good for spending less and saving more, reducing the need for debt and related finance costs.  But also hugely disruptive of many existing business models.  Creative destruction is a key theme.

Size is no obstacle for this 3D printer pic.twitter.com/RgTudFmKZI

— Business Insider (@businessinsider) July 27, 2017