Abu Dhabi, UAEMonday 30 March 2020

Amid London battle Uber's mission for autonomous cars gets more serious

At the core of most of Uber's woes is its drivers as regulators catch up to one of the world's biggest disruptors

Uber's licence to operate in London, Europe's biggest economy, was not renewed. AP.
Uber's licence to operate in London, Europe's biggest economy, was not renewed. AP.

Road blocks are up in Geneva, China, New York City and parts of Germany. London is the latest to reroute Uber out of town entirely, by not renewing its licence to operate.

So what does this mean for the future of how we get around?

At the core of most of Uber's woes is its drivers. Regulators are demanding answers to questions like, are drivers making a fair wage? Do they have enough oversight for riders to be safe (at issue in London)? Is the rise of the 'gig economy' contributing to middle class attrition? And could the competition against taxi drivers be a terminal condition?

These are questions in desperate need of answers. Livelihoods, lives and local economies are at stake, regulators say.

While outright bans against the ride hailing giant are rare, the current city government approach to curtail the service has been scattershot at best and will not result in systemic change that would address existential questions about our app-driven lives.

Over the last decade, modern society has grown accustomed to doing practically everything through an app - booking a cardio class, finding a date, ordering lunch or paying a bill. Ride hailing has perhaps faced some of the toughest battles of any of its peers in the App Store. No picket lines form when Tinder or Deliveroo arrive in a city. But Uber stokes ire. As one of the world's biggest disruptors it also has one massive people problem.

Which explains why it appears desperate to remove drivers from its business. For years, lawmakers were far behind on regulating Uber. Now that they are catching up, the company can see its salvation in a once-futuristic concept that is getting more real by the day: autonomous driving.

Three years ago, Travis Kalanick, founder and then-chief executive of Uber, reportedly said that if a company could produce a truly autonomous vehicle, he would buy half a million of them immediately.

In April, around the same time Uber was preparing its initial public offering, the company raised $1 billion of fresh investment for its driverless cars business from three Japanese investors: Softbank’s Vision Fund, Toyota and auto parts maker Denso. The financing established Uber’s self-driving cars unit as its own corporate entity, valued at $7.25bn, the company said at the time.

Meanwhile, as Uber expands its food delivery business - one of its biggest growth areas - it is keeping unmanned aerial vehicles front and centre, with plans to start delivering meals by drone in some markets by the end of the year. The technology would require fewer delivery drivers on the road for shorter periods of time.

While we are still years away from driverless cars, just in the last few days, headlines have been made over various companies developing self-driving cars taking test drives in Seoul, Arizona and San Francisco.

So as regulators push back on Uber over its core business of ride hailing, they would do well to be mindful of the message they are sending: Uber must move on from drivers. Pushback only adds to the company's urgency to disrupt once again.

Updated: November 25, 2019 05:56 PM



Most Popular