Closer to the finish line

When it comes to the self-driving car race, legacy automakers have plenty of advantages over Uber and its ilk,

Technology companies that specialize in software dominate the headlines in the discussion of the self-driving car. However, unlike building mobile apps or creating social networks, software will only get you so far without the infrastructure to design, validate, build, distribute and support a complete vehicle.

Chicago-based Navigant Research has twice evaluated the global competition for self-driving technology. When we first analyzed this marketplace in 2015, we considered only original equipment manufacturers, or OEMs, such as General Motors and BMW. While there were already a number of new players like Google and nu Tonomy working on the technology at that time, not enough was known about their capabilities to make a reasonable judgment.

Much has changed since then, as dozens of startups have emerged and other companies’ plans have come into focus as the technology matures. For our latest report, published this month, we expanded the scope of companies that we evaluated. We shed some OEMs, such as Mazda and Fiat Chrysler Automobiles, which have either indicated that automated driving is not a development priority or not given signs of active development, and added several suppliers and new companies, including Uber, Delphi and Google spin-off Waymo.

We found that it will be far easier for an automaker like Ford to replicate a ride-hailing logistics platform, such as those developed by Uber and Lyft, than for those providers to either manufacture vehicles or purchase them. Since automakers already have design, development, manufacturing and service infrastructure, and they are actively involved in advanced development of the technology, they are closer to the finish line with the addition of the mobility service platform.

What does this mean for Pittsburgh? Uber is often thought of as the pioneer in the self-driving technology race despite being a relatively late

entrant in 2015. The company launched automated cars in Pittsburgh last fall, but it does not produce its own cars, and its prototypes appear to perform less reliably than others. In combination with the massive financial losses that Uber and other ride-hailing companies have had, our analysis ranked the company 16th out of 18.

In the meantime, Ford, a legacy automaker that will invest up to $1 billion in Pittsburgh-based Argo AI over the next five years, already has the infrastructure it needs. Through its strategic investments in core technologies and development of its own ride-hailing platform, the automaker is better positioned than Uber to successfully commercialize this new technology. Uber CEO Travis Kalanick has referred to autonomous cars as an existential threat to the company. Between struggles with the technology, capital investment demands, legal threats from Waymo and the company’s public reputation, it’s not clear that Uber has a path to success.

There will certainly be a significant cost premium associated with adding all of the sensors, processing and redundant systems required for safe and reliable autonomous operation, making vehicle affordability a problem. In combination with liability concerns for early generations of these vehicles, it is expected that the technology will not be sold to mainstream consumers. Apart from some very premium models, most highly automated vehicles likely will only be made available through on-demand mobility services, especially the early generations of the technology.

Ford has already stated that its 2021 autonomous vehicle will be exclusively for ride-hailing services, and General Motors is focused on delivering vehicles for its partner Lyft. Daimler has also struck a deal to deploy autonomous vehicles in the field using the Uber platform in addition to services of its own.

The leaderboard report is a snapshot in time that reflects each ranked company’s track record combined with current and indevelopment capabilities for products and services; the rankings have changed and they will likely change again.

What’s more, it’s still too early to know how the public will ultimately accept this technology or which new partnerships will be formed in the coming months or years. For now, though, it looks like automated driving may turn into a sustaining innovation for at least the largest legacy automakers.

Sam Abuelsamid, a senior analyst with Navigant Research, co-wrote the Automated Driving Systems Leaderboard Report (research-press@navigant.