Toyota said this week it is making an investment in Uber. It is the latest auto manufacturer to put money into a ride sharing service. Earlier this year, General Motors invested a half billion dollars in Lyft, the ride sharing competitor to Uber. On Tuesday, Volkswagen announced it will make a $300 million investment in Gett, a small ride sharing service. Also this week, Ford chairman Bill Ford said his company is looking at opportunities in the marketplace that go beyond merely selling cars. “You’ll hear more from us,” later this year, he promised.
If you are out and about in San Francisco these days, you may see one or more Chevy Bolt test cars fitted with roof mounted sensors and cameras. They are pre-production prototypes that are undergoing testing by Cruise Automation, the west coast start-up that General Motors just purchased for $1 billion. The homepage of Cruise Automation features a photo of a while Chevy Bolt outfitted with an array of sensors and bears the caption, “We are testing our autonomous technology on the all new Chevrolet Bolt EV in San Francisco.”
When Chevrolet invested half a billion dollars in Lyft earlier this year, people wondered how it would use the ridesharing app in its business. This week, the company gave us the answer. It says it will introduce a taxi service using autonomous-driving Chevy Bolt electric cars in undisclosed US cities in 2017. The Chevy Bolt is expected to go into production before the end of this year. Lyft users will be able to opt out of the autonomous trial if they wish. Sitting in the back seat while the car drives itself may be a little too close to science fiction for some.
A consortium of automakers, ride sharing services, and Google will work together to convince federal regulators to create national standards for self driving cars. The group is comprised of Ford, Volvo, Uber, Lyft, and Google. It is called The Self Driving Coalition for Safer Streets. Its stated mission is “to work with lawmakers, regulators, and the public to realize the safety and societal benefits of self-driving vehicles.”
Reuters.com recently reported that Altamonte Springs, Florida, will be the first U.S. city to subsidize Uber services in an attempt to reduce traffic and increase transit ridership. The Orlando suburb has currently allocated $500,000 to cover 20% of Uber trips within city limits and 25% of trips to or from a SunRail station.
The program, which launched March 21st, received local, national, and international coverage. Altamonte Springs city manager Frank Martz said,“It’s infinitely cheaper than the alternatives. A mile of road costs tens of millions of dollars. You can operate this for decades on $10 million.” Martz said that suburban sprawl in Florida has made bus service inefficient and unaffordable. He hopes Uber service will help those in need of public transit to reach bus and rail stations.
“We’ve really worked with the city of Altamonte Springs to figure out how they can increase mobility,” said Central Florida Uber General Manager Christine Mitchell.
The city recently tried a similar measure with what is described as “Uber for public transit,” Lynx Flexbus, that was unsuccessful. Leftover funds from this attempt, along with additional funding from private local businesses, will be used for the new partnership with Uber.
“We’re disappointed that working with public agencies didn’t work out,” continued Martz,”but the fact of the matter is people still need to move. So, we kept looking for opportunities and Uber was an excellent opportunity.”
Not everyone is as optimistic. Joann Weiner, director of the master’s program in applied economics at George Washington University remarked, “I see this plan as blowing (the city’s) budget out of the water.” She added that subsidies often drive up the price of service and that the city may be underestimating the potential demand.
After the year-long trial concludes, the city will analyze the results and look for another partnership, possibly with Lyft, to drive prices down.
San Diego must qualify as the greenest city in the nation’s greenest state. So it’s a bit of a shock when its largest car sharing service, Car2Go, decides to give up on electric cars and go back to using cars with internal combustion engines. The problem, Car2Go says, is there are not enough EV charging stations in the San Diego area to make its business model viable. It currently has about 400 electric cars in its car sharing fleet.
This is bad news for a city that prides itself on its plan to slash carbon emissions by 50% by the year 2035 — one of the most ambitious programs of any US city. According to the San Diego Union-Tribune, electric cars are vital to that plan , as is car sharing because it can fill small gaps in commutes that rely on mass transit or bicycling.
City and environmental leaders said on Wednesday that the decision by Car2Go should be a call to action.”It’s a lesson to all of us that we have to work harder to build the infrastructure necessary to support electric vehicles and other transportation modes,” City Councilman Todd Gloria said.
Nicole Capretz, a consultant who was the primary author of the city’s climate plan, said the Car2Go decision is a frustrating step in the wrong direction. “It’s disappointing because we as a city are on a pathway to a 100 percent clean energy future and we can’t do it without converting our vehicles to electric,” she said. “This is a step backward, so we have to regroup and figure out some new solutions,” Capretz said.
The infrastructure to support plug-in cars is a critical issue all across America. Of all the major car manufacturers, only Tesla is aggressively pursuing a strategy to build fast charging stations all across America for its customers. Everyone else is hoping the government or private industry are going to supply the chargers their EV customers will need. What is happening in San Diego illustrates the problem with that approach.
On Monday, Jason Dalton, age 45, shot and killed 6 people and wounded two others in Kalamazoo, Michigan. On the surface of things, that hardly rates as a news story in America, where people shooting other people is a daily occurrence. Most of the time, such things don’t even make the news, anymore. Just same old, same old. Nothing to see here. Move along.
What makes this story different is that Jason Dalton is a driver for Uber. It is not entirely clear at this moment whether he was on duty with Uber while he was making his murderous rounds. Uber security chief Joe Sullivan tells Automotive News that Dalton was hired on January 25 of this year. He had an average customer rating of 4.73 stars out of five after giving about 100 total rides ,according to Sullivan.
Dalton successfully completed all required background checks with no reports of any prior criminal record found. “There were no red flags, if you will, that we could anticipate something like this,” Sullivan said. Uber uses the investigation service Chckr and databases including the National Sex Offender Public website to screen candidates. It also prohibits drivers and riders from carrying firearms.
Dalton has admitted “that he took people’s lives” while taking Uber fares, according to prosecutors investigating the shooting spree. He is accused of killing six people and injuring two others on Saturday at a Kalamazoo Kia dealership, an apartment building and a Cracker Barrel restaurant.
Concerns over Uber’s background check process have intensified in the wake of the incident. Critics say the company does not do enough to ensure riders are safe. For instance, it does not collect driver fingerprints or meet with drivers in person. Just like the Uber experience itself, all hiring is done online. Uber has agreed to pay $28.5 million to settle federal litigation brought by customers who say the company misrepresents the quality of its safety practices and fees.
Critics charge the shootings could have been prevented had a “panic button” feature been included on the U.S. version of Uber’s smartphone app. The feature, which was added in India following an attack by an Uber driver there, allows riders to tap a button alerting Uber and police.
The “panic button” feature could have been used by passenger Matt Mellen, who rode with Dalton roughly an hour before the first shooting. Mellen told CBS TV affiliate WWMT that Dalton sped through medians, ran stop signs and sideswiped a car before he was able to jump out at a stop. He said he tried to alert the company after the ride but was unsuccessful.
Ed Davis, a former Boston police commissioner who serves on Uber’s safety advisory board, said such a feature would not work in the U.S. Uber cannot compete with the resources of the 911 system, Davis said. He thinks the feature might actually confuse riders. Precious time could be lost while the try to figure out whether to call 911 or hit the panic button first. “In the U.S., 911 is the panic button,” Davis said.
How Uber responds to this incident could have a major impact on its business model, both here and abroad. The company’s preferred modus operandi is pugnacious push back toward anyone it perceives as a threat. Margaret Richardson is a former chief of staff under U.S. Attorney General Eric Holder. She now serves on Uber’s safety advisory board along with Ed Davis. She said during a conference call that all the attention on Uber following this incident incident serves only to distract from more relevant issues.
“The focus on Uber is a distraction from the availability of guns in the hands of people who perhaps shouldn’t have such easy access to them,” Richardson said. She went on to say there is nothing Uber could have done to prevent the shootings. Good call, Margaret. Let’s make this about the Second Amendment, not Uber. Let me ask you a question, Margaret. When was the last time you heard of a regular taxi driver going on a killing spree? OK, other than in that Robert De Niro movie?
This incident involves other ride sharing services such as Lyft, as well. A Kelley Blue Book study scheduled to be released soon found that only 33% of respondents considered ride-sharing “safe,” while 48% said they would be uncomfortable riding alone with a ride-sharing driver. Karl Brauer,an analyst at KBB thinks the shootings won’t have that much impact on Uber. “It raises the question [about safety] in the average person’s mind, though,” he said. Changes in ridership habits are unlikely unless more such incidents occur or the investigation of the Kalamazoo shootings exposes potential holes in Uber’s screening process, Brauer said.
Brauer did say that incidents like this make the case for autonomous driving cars stronger. He said Uber is investing in autonomous technology partly to mitigate safety risks. Getting rid of human drivers would eliminate a major cost, as well as risks related to driver behavior. “There’s more incentive” for Uber to invest in autonomous technology in the wake of the Kalamazoo incident, Brauer said.
Brauer is apparently too young to remember Michael Crichton’s apocalyptic movie WestWorld.
Tesla has been hogging all the headlines about autonomous driving systems lately, but now General Motors is causing some headlines of its own. In an internal announcement last week, it said it has reassigned several top engineers to a new team that will be fully responsible for developing autonomous driving systems for all GM cars. It began work on February 1.
Last month, GM invested a half billion dollars in Lyft, an on-demand ride sharing service similar to Uber. GM president Dan Ammann said, “We think our business and personal mobility will change more in the next five years than the last 50.” GM expects public use of autonomous cars will take place before private owners come to fully embrace the new self driving paradigm.
The new team will help accelerate the company’s technical capabilities and create the future direction of GM vehicle programs, according to Fortune. It will be solely responsible for all electrical design, controls, software, and safety integration.
The team will be led by Doug Parks, who was vice president of the company’s global products programs. He has held several engineering and finance positions at GM since 1984. He became vice president for global product programs in August 2012. He will now oversee the development of new electrical and battery systems and software for the vehicles. As team head, he will report directly to Mark Reuss, chief of all global product development.
Pam Fletcher, the executive chief engineer of the company’s global electric vehicles, will be responsible for the fleet of autonomous Chevrolet Volts being tested on GM’s campus. She will also be in charge of strategic planning for autonomous and electric vehicles. Sheri Hickok, a chief engineer for an upcoming light duty pick-up truck, will now lead the team creating autonomous vehicle fleets. She will also be in charge of developing autonomous vehicle partnerships and joint ventures, according to Reuters.
The all new Chevy Bolt electric car has been expressly engineered with the connectivity needed to make ride sharing ventures possible. It is expected in showrooms by the end of this year.
The new Chevy Bolt will not have autonomous driving capability when it arrives in showrooms, but it will have 4G LTE connectivity. Why it that important? Because General Motors intends to position itself at the front of the coming car sharing revolution and the Bolt is a big part of that plan. Last month, the General said it is investing $500 million in Lyft, the ride hailing service that competes with Uber. Now it is introducing Maven, a service designed to compete with ZipCar.
Those who pretend to know the future see a world where urban residents no longer own private cars. Instead, they arrange for a ride whenever they need one using apps on their cell phones. GM says there are about 5,000,000 people who use Uber and Lyft today. It expects that number to double and then double again over the next five years.
A private car in the city sits idle 95% of the time. But the expenses associated with owning that car go on every minute of every day. Loan payments, insurance, and local registration fees don’t stop while a car is parked. Maintenance and repairs still have to be paid for, as do expenditures for parking and fuel. The idea is, a city dweller could save a ton of money each month by using a car only when needed. On the other side of the equation, corporations can make a ton of money by turning cars into 24 hour a day income producing machines.
Fewer cars on the road mean less congestion. Urban space dedicated to parking can be repurposed for recreation, bike paths and green space. People will walk more, making the society healthier and lowering medical care costs. In other words, by helping people share cars rather than own cars, General Motors and others can tap into a new revenue stream while benefiting society as a whole. What’s not to like?
“What this is all about… is making sure that we can provide a service that’s completely seamless, completely connected, very easy to use, highly personalized, and a very efficient way to get around from A to B, from a car utilization perspective,” said GM President Dan Ammann in a conference call with reporters Wednesday evening.
The cars will be compatible with Apple CarPlay, Android Auto, and SiriusXM, allowing users to teleport their digital existence into any vehicle they happen to be in. Julia Steyn, GM’s vice president for urban mobility, said the key is to make “the passenger and customer to feel like it’s your own vehicle.” According to The Verge, Maven signals GM’s intention to embrace car sharing rather than fighting it. “Car-share [and] ride-share, in general, is much more an opportunity for General Motors than it is a threat,” Ammann says. “It’s already a sizable marketplace, and it’s growing quite rapidly.”
Maven will only be available at 21 locations throughout the city of Ann Arbor in Michigan. At first it will use mostly Chevy Sparks but may add Chevy Bolts when they become available. But it can easily expand to include other car sharing programs in other cities. GM expects to have 5,000 users by the end of the year.
GM is not alone in pursuing car sharing, of course. Tesla CEO Elon Musk famously did a very public double take during an investors conference call last fall. Stock analyst Adam Jonas asked if Tesla is planning a similar service. Musk looked stricken and declined to answer the question.
What do you think of the car sharing idea? Is it something you would be interested in? Let us know why or why not in the comments section.
General Motors has made one of its largest investments ever in another company. It has agreed to fund a partnership with Lyft, the ride sharing service, to the tune of $500,000,000. “We had a really common view of the future,” said GM President Dan Ammann in an interview with Reuters. Ammann will join Lyft’s board as part of the deal.
In the same interview, Lyft President John Zimmer said that the “culture and vision are very alike” between the two companies. “We think our business and personal mobility will change more in the next five years than the last 50,” said Ammann. Both GM and Lyft believe that autonomous driving vehicles will first appear as part of public ride sharing services rather than as privately owned cars.
For its part, Lyft will be able to take advantage of GM’s autonomous vehicle research and development, while GM will gain access to Lyft’s software, which automates driver and passenger matching along with online routing and payment methods. Taken together, GM and Lyft could create a network of cars that operate themselves and are available on demand. The companies provided no timeline for their ride sharing service. Lyft drivers will be eligible to lease GM vehicles on a short term basis to use for business purposes.
Lyft faces stern competition from the larger and better funded Uber, which has a market capitalization almost ten times greater. It is rushing to develop its own self driving cars, after it was rebuffed by Tesla’s Elon Musk when it offered to buy a half million autonomous driving cars from the California company earlier this year. Some think Musk’s refusal may signal that Tesla itself may be planning to enter the autonomous car sharing business. Recently, a rumor surfaced that Google and Ford have agreed to a partnership. The agreement is supposed to be made public at the Consumer Electronics Show that opens today.
With all the focus today on autonomous driving cars today, spearheaded by Tesla’s Autopilot system, it seems the world of self driving cars is coming sooner than anyone expected.
Despite being the innovative and ground-breaking company that married mobile communication and ride-sharing to become a household word, Uber has suffered a few setbacks here and there. Setbacks like court cases in California that are forcing the company to change the way it treats its drivers that have called Uber’s long-term health, and the liability exposure of its
employees contractors, into question. Now, however, it looks like some insurance companies are starting to embrace ride-sharing by offering policies designed to help protect Uber drivers.
The first of these Uber-specific insurance policies was a USAA pilot program in Colorado that gave ride-share drivers the option “to purchase additional gap protection insurance coverage from the moment their ride-sharing mobile app is turned on until they are matched with a passenger.”
That was helpful, but it doesn’t bump drivers’ liability coverage once they have a passenger on board. It’s something, though, and ride-sharing insurance policies have grown from the initial USAA pilot program in Colorado to a Canada-wide plan offered by Intact Financial to, last week, acceptance by Massachussetts Governor Charlie Baker. A Baker spokesman, when asked about the apparent endorsement for USAA, offered that no other companies had submitted such a policy in Massachusetts yet, but the state wants to encourage other proposals to help promote ride-sharing. “As we work to develop a regulatory framework to support innovative ride-sharing companies, it’s crucial that appropriate coverage is available to protect drivers, passengers and the traveling public,” Baker said in a statement. “With the first endorsement of its type taking effect for TNC drivers, we welcome others to participate in supporting consumer safety and choice in Massachusetts’ diverse transportation network.”
What do you guys think? Is this type of insurance a legitimate step forward, or is it just a lobbying move by Uber and USAA to squeeze a few extra shekels out of the public before the government and unions come down hard on ride-sharing? Let us know what you think in the comments section at the bottom of the page.
Originally published on EV Obsession.
The second-in-command, so to speak, at Tesla Motors, is JB Straubel. JB was recently ranked #2 on Fortune’s annual “40 Under 40” list — beating out quite a number of other notable figures, including those behind the ridesharing services Uber and Lyft (who came in #3).
Fortune’s editors commented on the new list thusly: “We may think we live in the age of the tech unicorn, but disruption is coming at us from all corners of industry, as our 2015 ranking of the most influential young people in business shows. There are tech names here, yes, but also stars in health care, autos, finance, food, real estate, comedy, and even ultimate fighting… the one thing these mavericks have in common: They make their own rules. For the first time our list is 100% brand-new.”
Without further ado, here are the top 10:
TOP 10 OF FORTUNE’S 2015 40 UNDER 40:
1. Adam Neumann, Co-founder and CEO, WeWork
2. JB Straubel, Chief Technical Officer, Tesla
3. Ryan Graves, Uber; Logan Green and John Zimmer, Lyft; Cheng Wei and Jean Liu, Didi Kuaidi
4. Dhivya Suryadevara, VP Finance/Treasurer, GM and CEO, GM Asset Management
5. James Park, Co-founder and CEO, Fitbit
6. Taylor Swift, Entertainer
7. Vas Narasimhan, Global Head of Development, Novartis Pharmaceuticals
8. Jason Robins, Co-founder and CEO, DraftKings
9. Daniel Schwartz, CEO, Restaurant Brands International
10. John Oliver, Host and Executive Producer, Last Week Tonight
Photo by Steve Jurvetson (CC BY 2.0 license)
In cities around the world, wireless connectivity is powering a massive shift in social attitudes. In a sharing economy, people don’t want to own “things” any more. Instead, they simply rent what they need when they need and return it when they are done. Ford is paying attention and it is clearly worried about the future of the automobile business.
If you live in a city today, it makes a lot of sense not to own a car. Cyber-commuting services like Uber and Lyft make it easy to get around without a car of your own. No car means no monthly payments, no insurance bills, no maintenance costs and no anxiety about where you are going to park when you get where you need to go.
Now some planners at Ford are researching how the company can meet the challenges posed by a sharing economy as opposed to an ownership economy, reports the The Washington Post. And one answer seems to be building a vehicle that is specifically tailored to the needs of cyber-commuters. It may also mean getting involved in the ride sharing business itself. Think of it as a cross between a car share service and regular public transportation.
Ford recently launched about 25 mobility projects to look at the changing world of transportation, and a purpose-built car-sharing vehicle is just one of those ideas. What would the ideal vehicle for this purpose look like? Nobody knows. Ford thinks it should be bigger than a traditional sedan but smaller than a bus. It should be able to carry multiple passengers in comfort but not so many that is starts to feel like a crowded elevator. For the moment, Ford is considering an adaptation of its appropriately named Transit van, which has been on sale in Europe for several years and is just beginning to replace the venerable Ford Econoline in the US. The Blue Oval just opened a new R&D facility in Silicon Valley to explore this and other 21st century ideas.
“There is a white space for a new product,” says John Abernethy, project lead for the Advanced Product Group at Ford Motor Company based in Britain. “Between a taxi and a bus is a space for something else. People are willing to get into a subway or a mass transit system and press up against strangers, because that’s the expectation, although they might not enjoy it. You wouldn’t get into a vehicle this size and do the same thing.”
But Ford is thinking about more than just building and selling vehicles. Part of its research into the future of urban transportation involves thinking about how the company could create a space that goes beyond what Uber and Lyft offer customers. Ford calls its idea a “dynamic social shuttle” and says it will require very sophisticated computer algorithms to match up the needs of multiple passengers and figure out how to deliver them all to their individual destinations as efficiently as possible. “People recognize the more they share, the more value they may get out of the service,” Abernethy says. “But there’s a limit to how many people they’re willing to share with. You have to get that balance of efficiency, convenience and cost.”
Ford has a range of applications in mind. It could market its service and vehicles to public transportation agencies looking to better serve their clientele or franchise its service to private taxi companies. It could even target individual entrepreneurs who want to become full time drivers for hire, but the company says that last option is not the main objective. “Within that range, we want to learn ‘what is the right role for this type of service’?”
In the end, Ford’s research may not lead to any particular conclusion. “Success will be the learning in itself,” Abernethy says, “and hopefully we will generate new business ideas out of it, or at least shape our future thinking.”
The percentage of two car households in America is expected to fall from 57% today to 43% by 2039, according to consulting firm KPMG. Its projections for the future were released Tuesday as part of the Connected Car Expo at the Los Angeles Auto Show. Gary Silberg, KPMG’s automotive sector lead partner says, ” If that happens, the overall number of cars in America will actually decline. The industry economics would look fundamentally different than they do today.”
Part of the reason for the predicted shift in car ownership habits is because more Americans are electing to leave suburbia and return to urban life. Living in the city means access to public transportation and the ability to walk or bike to work. It also means finding places to park two cars is more of a challenge. KPMG says it costs about 61 cents per mile to own a car today. Getting rid of one car can slash how much American families pay every year for car insurance, maintenance, taxes, and fuel to the tune of $10,000 per year or more.
Another factor identified by the study is the rise of internet-powered car sharing platforms like Uber and Lyft. “The economics of mobility on demand are powerful,” Silberg says. Basically, why bother owning a car if you can have all the benefits with none of the drawbacks?
The percentage of two car families is already below 50-percent in several major US markets. New York City households are the least likely to own two cars, but even in car-friendly cities like Los Angeles and Houston, the percentages have dropped. In Los Angeles, 47.8 percent of households claim two or more vehicles and in Houston, it’s 47.1 percent, according to 2013 US Census Bureau data.
KPMG is advising auto companies that the rise of computer-based ride sharing will have a significant impact on the auto business. But the company is also telling its clients that they can hold onto customers by enhancing their connected driving experience. In other words, the ability to interface with work, family and friends while in the car will be a central consideration for car buyers in the future.