One of my first blog posts when I restarted Motoring Weekly was about autonomous vehicles and I theorised that sooner or later taxis and trucks would be self driving such that local economies would suffer due to reduced employment and the revenue from the services being extracted out of the locality and pushed to central domains, potentially offshore to minimise tax. My personal view is that this could start civil unrest as the wealth of the population spirals downwards and Governments panic over losing votes.
Well this scenario is about to start. Uber has not only bought a startup called Otto, it is also testing its own fleet of autonomous vehicles.
For a hefty US$680M, Uber acquired Otto in August and will absorb the 91 employees into their environment. The Bay Area startup – is it really a startup when you have so many employees? – has been testing autonomous trucks since January using the Interstate network around northern California. I have probably seen them as I use the same freeways a couple of times a year but not known that Otto was a research entity rather than a trucking company!
Uber had just had a cash injection thanks to selling Uber China to Didi Chuxing, their biggest rival and the dominant player in that country. The plan clearly is to see how Uber can break into the trucking industry. Otto planned to retrofit their technology into existing trucks and are selling the idea to the drivers by suggesting fuel savings, less idle time with the rig and earning more because the driver could be sleeping whilst the truck continues on its way thus they collect their mileage rate for longer.
Nice idea, however I think that is false. For starters, if the driver must be in the cab at all times, then the current idle time as required by law will still stand. The law enforcement agencies will consider the driver to be in control regardless of whether they are sleeping or not. Once a driver is in the vehicle, they are responsible for the actions taken. That is why you can be prosecuted for being drunk in a vehicle even if you are not moving. So, an officer could prosecute a driver for driving over the time limit as specified in the law books. The only way to get away from that is to have a truly driverless vehicle.
That then brings us back to my first article: logistics companies will look at the cost of running a tractor/trailer unit which will now be cheaper because there is no driver to pay and therefore reduced insurance premiums. The economies of scale will put the owner/driver out of business. The big trucking and logistics companies will carve up the industry until there are only a few left. Being a truck driver will no longer be a career choice!
This has already happened in Australia, where BHP, the big mining company, use driverless trucks in some of their mine sites. No expensive drivers to pay and as such they have reduced their operating costs.
Uber have put a huge bet that the trucking industry can be dominated just as they are working to dominate their core business of ride-sharing – certainly in their home country.
Uber’s Autonomous Cars
Pittsburgh and Singapore are among the test beds for Uber’s new self-driving fleets. Like the Otto trucks, they are not truly autonomous yet – there is a driver to take control if there is a problem and a second person to help with the onboard systems. Uber are using Ford and Volvo cars with a full range of radars, GPS, cameras, wireless connection and data collection devices. All the data acquired during each run is then used to map the current conditions and road environment.
For both Pittsburgh and Singapore, the Governments are keen to see this technology work and grow. Singapore is a city state that is very focused on technology having been one of the first cities in the world to provide every citizen with high speed broadband access. Pittsburgh has research centres that provide employment for the local population.
Soon the cars will lose the systems engineer (passenger) and then will lose the driver as the data becomes more reliable. It is at that time that Uber could easily start to buy cars and drop the owner/driver combination, taking all the revenue and using the car as a tax write-off. This would put more pressure on the taxi industry and would force local and State Governments to react.
Many have already allowed ride-sharing to compete with local taxis which has helped to reduce the cost of taxi licences. By doing this, the Government departments cannot easily backflip without losing votes from the population!
Time will tell, however I think this whole topic will become a huge minefield for local Governments and economies when too much money leaves the local economy and unemployment creeps up as jobs disappear.