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The Beginning of the Driverless Taxi Wars?

There are signs Uber and Google could become "ferocious competitors" instead of allies.

The latest prototype of Google's driverless car. (Google)

When driverless car leader Google made a $258 million* investment in ride-hail leader Uber back in 2013, the marriage seemed headed toward a world of on-demand autonomous taxis that render car-ownership in cities totally optional. But the honeymoon appears to be ending, according to Brad Stone of Bloomberg Business. Citing unnamed sources, Stone reports "signs that the companies are more likely to be ferocious competitors than allies":

Google is preparing to offer its own ride-hailing service, most likely in conjunction with its long-in-development driverless car project. [Google's David] Drummond has informed Uber's board of this possibility, according to a person close to the Uber board, and Uber executives have seen screenshots of what appears to be a Google ride-sharing app that is currently being used by Google employees.

Google would not confirm (nor explicitly deny) the report—instead issuing what Stone calls a "cryptic tweet" about how Uber and Lyft "work quite well." Uber, meanwhile, recently announced a partnership with Carnegie Mellon to develop its own driverless car technology in Pittsburgh.

Even if both sides are just hedging their bets, as Slate's Will Oremus suspects, there are clearly some robotic wheels in motion.

A split would no doubt hurt Uber more than Google. Catching up on driverless technology and digital navigation on par with Google Maps is a far bigger hurdle than building an app and amassing a network of freelance drivers. For its part, the don't-be-evil Google might be wary of going all in with a company that seems to attract scandal at every turn.

To get a sense of just what's at stake here, we turned to recent research from Daniel Fagnant and Kara Kockelman, who have been modeling possible networks of shared driverless taxis in Austin, Texas. Their latest simulations, presented at a transportation conference in January, suggest an optimal fleet size of 2,118 taxis to serve Austin. Assuming a purchase price of $70,000 per vehicle, fares of $1 per mile, and no competition, an operator could see a 19 percent return on investment.

It's obviously way too early to know if these price points might actually be accurate (let alone the accuracy of the Bloomberg report). But it's safe to say there's a lot of money on the line for whichever company masters the driverless taxi scheme. Certainly enough to fight over.

*CORRECTION: An earlier version of this story said Google invested $258 billion in Uber. It was $258 million.

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