Ford and Lyft Will Work Together to Deploy Autonomous Cars

Every so often, we’ll make a comment about when Lyft is finally going to overtake Uber. Well, it looks like Lyft has been maneuvering in the shadows this whole time. Could Lyft be the ultimate winner in the end? Today, senior RSG contributor John Ince covers Lyft’s secret meetings, investments and more, plus Uber’s very public backlash – both by drivers and investors.

Also, our very own John Ince has just finished his book, Travels With Vanessa: An Uber/Lyft Driver Tries To Make Sense of It All, which you can read about and purchase here. It’s a book that delves into the stories of the people John has met. In addition, it’s a critique and analysis of how rideshare is re-shaping our lives – and what that means for all of us. 

Today, senior RSG contributor John Ince covers Lyft's secret meetings, investments and more, plus Uber's very public backlash - both by drivers and investors.

Ford and Lyft will work together to deploy autonomous cars [The Verge]

Sum and Substance: Ford announced today that it will work with Lyft to deploy its self-driving cars on the ride-hail service’s platform by 2021. On the surface, it’s yet another announcement about two companies partnering on driverless cars (snooze). But it’s bigger news than it seems for two reasons: it’s the first sign that Ford won’t be going it completely alone on autonomous driving; and it’s a possible wrinkle in the preexisting relationship between Lyft and Ford’s biggest rival, General Motors. Engineers from Ford and Lyft will work together to build software that allows Ford’s self-driving cars to communicate with Lyft’s app. Recently, Lyft said that it would also be designing and manufacturing its own self-driving technology stack. And Ford has targeted 2021 as the year it will begin deploying its fully autonomous Ford Fusion hybrids on a ride-hailing service. Now it seems that that service will be Lyft’s.

“Think of it this way: Someday, when you open the Lyft app during a period of high demand, Ford and Lyft software will need to be capable of quickly dispatching a self-driving vehicle so that you can get to your destination as quickly and as safely as possible,” Ford’s VP for autonomous vehicles and electrification Sherif Marakby wrote today. “And that’s where our work with Lyft begins.” In addition to building its own self-driving technology, Lyft has said it is creating an open platform to deploy autonomous vehicles built by other companies. We now know that this will include GM, Jaguar Land Rover, Alphabet’s Waymo, NuTonomy, and now Ford.

Meanwhile, Ford recently said it would invest $1 billion over five years in a little-known AI startup called Argo. Neither Lyft nor Ford made any mention of GM in their respective announcements. A Lyft spokesperson subsequently said that there would be “no change for our partnership with GM; GM is an investor and board member but the partnership is non-exclusive. Our relationship with GM didn’t play a role in this decision.”

A GM spokesperson echoed that sentiment (and tossed in a bit of a challenge, too): “This does not affect our existing business relationship with Lyft. GM’s plan remains steadfast — we are on track to launch our self-driving technology first in a ride-sharing application.” GM’s announcement that it would be investing $500 million in Lyft back in December 2015 was one of the first in what has since become a long string of announcements concerning these types of partnerships. The emergence of self-driving cars, estimated to eventually be a $7 trillion industry, …

My Take:  Slowly but surely, Lyft has been establishing itself as a credible threat to Uber.  They’ve managed to transform their scrappy, quirky identity to a thoughtful, major player.

Their strategy in autonomous vehicles is a good case in point. Lyft is positioning to be the connective tissue between other major players in this space.  Yes, it’s getting to the point where you need a scorecard to keep track of all the partnerships emerging in self driving cars. From this announcement, it certainly appears that at least on my scorecard, Lyft is winning the game against its main rival, Uber. Lyft now has emerging collaborations with almost all the major players – and that’s what will determine the big winner in what appears to be a huge market. 

Uber CEO apologizes to Londoners: ‘We got things wrong’ [Money/CNN]

Sum and Substance: Uber’s new CEO issued an apology to Londoners on Monday just days after city officials said they would not renew the company’s license. “While Uber has revolutionized the way people move in cities around the world, it’s equally true that we’ve got things wrong along the way,” Dara Khosrowshahi wrote in a letter first published in London newspaper The Evening Standard. “On behalf of everyone at Uber globally, I apologize for the mistakes we’ve made.” London’s transport authority announced Friday that it would not renew Uber’s license when it expires at the end of September, saying the company was not “fit and proper” to operate in the city. Transport for London (TfL) said it didn’t like the company’s approach to reporting serious crimes. Also at issue: a controversial piece of software called “Greyball” that prevents officials from monitoring Uber’s app. (Uber says it has never used, or considered using, the software for the purposes the London authority cited.)

Uber has said it plans to challenge the decision in court. It also started a petition urging London mayor Sadiq Khan to keep Uber in the city. By Monday, more than 760,000 people had signed it. Khan, who has backed the ban, welcomed Khosrowshahi’s apology and indicated it could open the door to talks between the company and city transport officials. “Obviously I am pleased that he has acknowledged the issues that Uber faces in London,” the mayor said in a statement. “Even though there is a legal process in place, I have asked TfL to make themselves available to meet with him.”

Khosrowshahi took over as Uber’s top exec last month. This is his first public apology as CEO of the company. His predecessor, Travis Kalanick, left behind the fallout from a PR crisis that was kicked up earlier this year amid allegations that managers didn’t adequately address reports of sexual harassment. Critics say the firm has an overly aggressive culture that encourages its managers to flout local regulations. It’s also been the subject of controversies over passenger safety, along with driver background checks and pay.

My Take:  This is one more indication that Dara Khosrowshahi has a vastly different approach and management style than former CEO Travis Kalanick. Note the London ban on Uber won’t take affect while Uber appeals – which could take years.

But, again, Lyft seems to have outsmarted Uber.  While Uber’s new CEO is issuing an apology to try to smooth things over with London authorities, Lyft has quietly been holding meetings to pave their way into the London market. See: Uber arch-rival Lyft quietly met with London regulators 5 times over the last year. According to this article, “Uber’s arch-rival Lyft has quietly met with London’s transport regulators five times over the past 12 months. The meetings, some of which took place over the phone and some in person, suggest that the American transportation firm is at least considering the possibility of expanding to the British capital.”

Uber will now let you know when you’re being a total jerk to your driver [The Verge]

Sum and Substance: Uber is announcing a few notable changes today, starting with a new feature that allows drivers to offer an additional layer of feedback to unruly riders. Working off the assumption that no one likes IRL confrontation, drivers can now choose from a preselected list of reasons to explain why they rated a passenger as less than five stars. So the next time you take too long getting in the car, or you have a loud phone conversation in the back seat, you’ll be hearing about it from your Uber driver. 

The update will ask drivers “what went wrong” if they select a four-star rating or less. They can then choose from a list of reasons: “wait time,” “patience,” “number of riders,” “attitude,” “wanted new route,” or “other.” If a rider gets the same “tag” twice within 30 days, a notification will appear when they open the Uber app to let them know that their behavior is affecting their rating.

According to Uber, drivers often complain that poor rider behavior can be a major cause of stress, especially during UberPool trips. Drivers have always been able to rate riders after the trip, but now they will be able to leave specific feedback that Uber can then surface to riders so they can improve their rating. Whether riders take the criticism to heart or dismiss it as patronizing, though, remains to be seen. 

The irony, of course, is that Uber is announcing this new feature at a time when its own reputation has suffered from series of damaging, self-inflicted controversies and scandals. A cascading series of reports of a toxic workplace, hostility toward its female employees, secret programs to evade the authorities, and more have served to blunt the startup’s momentum. The company’s new CEO, Dara Khosrowshahi, was forced to publicly apologize for Uber’s many transgressions after London officials declined to renew the company’s license to operate in that city….

These changes are part of the company’s overall “180 days of change” apology tour that it hopes will help shore up its relations to its drivers and riders. … Most of the changes announced today relate to UberPool, a service that’s seen by many at Uber as core to the company’s mission of improved transportation, but has been plagued by poor feedback from riders and drivers. Riders are lured in by cheaper fares, only to become aggravated by frequent detours to pick up new passengers. Drivers complain that UberPool often means more work without necessarily more pay. … 

To help sweeten the load for drivers, Uber will now offer an additional flat fare for each added passenger they pick up during an UberPool trip. Uber says it will be shouldering a meaningful portion of the added cost of these trips through a reduction of the service fee the company applies to each trip. Still, the upfront fare a rider receives on an UberPool trip will be the fare he or she pays, regardless of whether there are additional pickups or not. The pickup fare will range from $0.50 (in Miami) to $1.00 (in San Francisco), depending on the city. Assumedly, this is because the demand for UberPool is higher in San Francisco than Miami. …

My Take:  These changes are welcome, but how much more difficult would it have been to add a few more options to this feedback loop, like “underage passenger” or “total nut case”?

SoftBank Limits Kalanick’s Power in Uber Deal [Bloomberg]

Sum and Substance: SoftBank has made its position clear on Travis Kalanick as it pushes ahead with a multi-billion dollar investment planned for Uber. SoftBank is said to have signed a written guarantee that the ex-CEO will not be allowed back in charge. 

My Take: These talks seem to be dragging on and Bloomberg has the scoop on one possible reason – Uber investors like Benchmark don’t want TK back under any circumstances. This  video doesn’t cite sources, but it certainly seems plausible that this issue may be the sticking point in finalizing this rumored deal.

An investor is suing Uber, alleging that the company’s value has plunged because of the scandals [Business Insider]

Sum and Substance: A Texas-based retirement fund that invested in Uber is suing the company and its former CEO Travis Kalanick, accusing the company of making misleading statements about its business to drum up billions of dollars in investment starting in June 2014. Irving Firemen’s Relief & Retirement Fund filed the lawsuit in California federal court on Tuesday. The lawsuit does not say how much the retirement fund is seeking but alleges that Uber has lost at least $18 billion in private market value as a result of a series of scandals and controversies.

The retirement fund, through a Morgan Stanley fund, invested $2 million in Uber at a $62.5 billion valuation in February 2016, according to The Wall Street Journal. “In a span of only a few months a shocking litany of corporate misconduct came to the fore, and investors learned startling truths about the willingness of Uber’s C-Suite executives to flout local, national and international law, stifle competition, misappropriate trade secrets and seek vengeance against detractors,” the suit claims. “The Company’s vaunted corporate culture was revealed to in truth consist of a toxic hotbed of misogyny, sexual discrimination, and disregard for the law that threatened the Company’s reputation, business and prospects.”

The suit claims that practices Uber used to track its rivals and deceive authorities — which Uber called “Hell” and “Greyball,” respectively — threatened the health of Uber’s business. “Kalanick and Uber failed to disclose that, in order to show strong short-term growth, the Company was employing and plotting to employ a variety of illicit business tactics that threatened Uber’s business, reputation and long-term prospects,” the suit claims.

Additionally, the suit delves into Uber’s ongoing lawsuit with Waymo, the self-driving-car company spun out of Google; the theft of a passenger’s medical records after she was raped by an Uber driver; and the findings of the investigation, led by former Attorney General Eric Holder, that examined Uber’s corporate culture after several allegations of sexual harassment and discrimination arose.

You can read the lawsuit here:

My Take:  Oh my, this one is juicy. You’ve got to read the actual lawsuit to appreciate just how bitter things have become inside Uber’s investment class. Now it’s not just Benchmark. Who knows how this all will play itself out, but it’s not a good sign when the people that put you in business are now acting and speaking out publicly against you.

Readers, what do you think of this week’s round up?
-John @ RSG