Is Uber heading down the road to nowhere?
Uber, the face of collaborative consumption, had its longawaited sharemarket debut that went about as well as expected. Instead of being hailed by investors as a vehicle on the road to riches, Uber shares took a ride down into the doldrums.
Some of the sharemarket float fiasco for Uber can be explained by the general bearish sentiment caused by the United States versus China trade war that’s stoked by the Trump administration.
Shares everywhere are flagging, including those in ridesharing rival Lyft which went public earlier this year and promptly crashed in the market.
Given that Uber has lost billions of dollars every year despite huge growth and now the market float flop, you have to wonder if venture capitalists in Silicon Valley and elsewhere will press the panic button in six months when they’re allowed to sell their shares.
There are lots of storm clouds on the horizon for Uber, including the recent research that shows its vehicles make congestion worse in already clogged-up cities. More congestion equals more pollution and delays for everyone.
If both those negatives can be sharply reduced by hitting Uber with harsh regulation, authorities will do so.
Likewise, Uber’s recent overtures towards the drivers who bring in the revenue, while carrying its operating costs, are likely to be a case of too little, too late.
In Auckland, just about every Uber driver also works for Ola and Zoomy (and hardly anyone is aware of the latter that takes much less commission for rides).
Being an Uber driver isn’t ever going to pay well enough to be a worthwhile career — if it did, the company’s losses would surpass the current record levels.
Instead, Uber will have to get rid of all those costly drivers and turn them into self-driving vehicle investors.
That concept fits neatly in with the company’s techno-libertarian ethos and it’s backed by Japan’s Toyota and Softbank with billion dollar investments. But it’s turning out to be harder than expected for Uber to achieve.
While Uber self-driving is in development, it’s not clear when it will arrive. They use a technology called light detection and ranging (LiDAR) which uses laser pulses with radars to accurately measure distance.
Tesla founder Elon Musk has been scathing about LiDAR, saying it’s stupid to use the technology instead of cameras, normal radars and ultrasonic sensors coupled to powerful computers that make sense of what the machines see.
There are pros and cons to both approaches. However, time’s running out and Uber needs cheap and small LiDARs that work to integrate into vehicle designs instead of the expensive and bulky rotating test devices currently available.
Meanwhile, Tesla already has vehicles ready that can more or less drive by themselves. (I’ve tried the autopilot beta software in a trusting friend’s Model S — it’s scary at first but works well enough that you relax a little after a while).
Musk has also promised robotaxis by next year that will earn their owners tens of thousands a year.
These will probably be delayed for technical and regulatory reasons but Musk is bloody minded enough to push through with the robotaxis.
Regulatory pushback, rebelling drivers, copycats like Ola and Tesla pulling out all stops to be first with self-driving cars, suggest a bumpy road ahead for Uber.