Google And Lyft Team Up To Put Yet Another Nail In Uber’s Coffin

Harry here. Is this the end of Uber as we know it? Recent lawsuits may say yes, but then again, Uber has proved us wrong in the past. Uber is a scrappy company, and in this week’s round up, senior RSG contributor John Ince takes a look at a number of Uber issues – and potential ways for it to redeem itself. Anyone up for a flying Uber ride? 

Google And Lyft Team Up To Put Yet Another Nail In Uber’s Coffin

Google And Lyft Team Up To Put Yet Another Nail In Uber’s Coffin []

Sum and Substance: This is rich. On Sunday, Waymo announced it inked a deal with Uber’s arch-rival Lyft to collaborate on autonomous vehicle technology. Oof.

Google’s self-driving car project could potentially scuttle Uber’s autonomous driving ambitions for months. If Waymo prevails in that effort, it could be the coup de grâce for Uber. It’s hard to immediately glean the significance of the deal, as the Times said details are “scant.” All a Lyft spokesperson would offer the newspaper is that the collaboration will help “accelerate our shared vision of improving lives with the world’s best transportation.” 

But Uber has been dealing with a never-ending stream of bad publicity, thanks to a series of mishaps—from an uproar over its misogynistic workplace culture, a video of its CEO berating an Uber driver, to the alleged trade secrets theft at the center of the case against Waymo. And if Waymo succeeds in an effort to prevent Uber’s self-driving program from continuing research while the case proceeds to trial—a decision that could be revealed as early as today—then this announcement with Lyft could prove far-more interesting.

Lyft is second in the ride-hailing market, with significantly less valuation than Uber and a smaller network of where it operates. But the prevailing thought among autonomous vehicle backers is that ride-hailing will be dominated by robot cars in the coming years. Ford said it wants to roll out fully-autonomous cars for ride-hailing purposes by the start of next decade and Waymo is already testing semi-autonomous vehicles through a partnership with FCA. 

Lyft hasn’t indicated it has plans to develop autonomous driving tech on its own, but the start-up already has a separate, similar deal through a $500 million investment from General Motors, which stipulates that Lyft will test autonomous Chevy Bolts on its network within the next few years. The deal with Waymo is a non-exclusive agreement, according to the Financial Times, meaning both sides are free to continue their other partnerships (Waymo, for instance, with FCA). All together, it makes the goal of seeing fully-autonomous cars on the road, picking up passengers by 2021, seem more attainable. Given that Uber’s CEO Travis Kalanick believes self-driving cars are “existential” to his company’s existence, this can’t be an enjoyable day for him.

My Take:  Gotta hand it to Lyft – with much fewer resources, they’re hanging in there and giving Uber a good fight. Lyft lately has been emboldened by Uber’s missteps. Lyft used all the bad news to tap investors for another $500 million investment a few months ago. Then they announced a major expansion plan into almost 100 cities, and now this.

The details of this partnership are sketchy but if nothing else, it’s a PR coup, and in the tech world PR counts for a lot – because it often translates into investor interest and user growth. I’ve yet to see Lyft’s stats on user growth, but here in the San Francisco Bay Area it’s still no comparison – Uber still dominates, but all that could change on a dime.

To wit, CNBC writes, this race isn’t anywhere near being over“A CNBC analysis found three key ways in which Lyft has built itself into a formidable competitor to Uber in the United States. Lyft’s development of proprietary technology, its high driver satisfaction ratings and its reported path to profitability helped push it ahead of Uber on the 2017 CNBC Disruptor 50 list. A year after Uber topped the list, Lyft now sits at No. 2, while Uber has dropped to No. 19.” … Stay tuned.

Uber’s self-driving car program just dodged a huge bullet — but still lost a key member [Mashable]

Sum and Substance: A federal judge on Monday said that Uber will be allowed to go forward with its self-driving car program even as it faces another obstacle in its ongoing lawsuit with Google over self-driving technology. 

A federal judge has granted an injunction that blocks its self-driving chief Anthony Levandowski from working on the company’s self-driving project due to the ongoing lawsuit. Google (through its self-driving car company Waymo) is suing Uber alleging that a former Google engineer took trade secrets with him when he want to help start Uber’s self-driving car program. The ruling could have been much worse for Uber. As part of the injunction, the judge also ruled that Uber can go forward with its current self-driving pilot programs even as Levandowski faces criminal trial over the allegations of stolen documents looms. An Uber spokesperson said the company is “pleased with the court’s ruling that Uber can continue building and utilizing all of its self-driving technology, including our innovation around LiDAR.”…

This new ruling from California judge William Alsup notes that Waymo was successful in trying to prove that Levandowski had downloaded thousands of Waymo documents before leaving to found self-driving startup Otto, which was later purchased by Uber and rolled into its own self-driving car program. … Just a few weeks ago, Levandowski said he was recusing himself from working on the LiDar sensor system due to the lawsuit but, as CNBC reports, an Uber worker who recently testified in the lawsuit said that Levandowski is in almost daily contact with the person currently heading up the self-driving technology department. Meanwhile, Waymo has wasted no time in partnering up with Lyft, Uber’s main competitor, to develop self-driving car projects.

My Take:  Uber’s got to be feeling some relief after Judge Alsup essentially ruled in their favor on a key issue in this preliminary trial.  For the time being, Uber can continue their work on self driving cars – but down the road, it looks like Waymo’s got a good case against Uber.  On the issue of whether Levandowski can continue working at Uber, the judge ruled he has to be on the sidelines.

Uber Says It Will Start Offering Flying Taxis In 2020 [Reuters]

Sum and Substance:Flying taxis may become a reality in the next four years. U.S. ride-hailing service Uber Technologies Inc expects to deploy flying taxi services in Dallas-Fort Worth, Texas, and Dubai in 2020, Chief Product Officer Jeff Holden said at the Uber Elevate Summit in Dallas. 

Uber’s flying taxis will be small, electric aircraft that takeoff and land vertically, or VTOL aircraft, enabling zero operational emissions and quiet enough to operate in cities without disturbing the neighbors. The company is working with Hillwood Properties to make four vertiports – VTOL hubs with multiple takeoff and landing pads, and charging infrastructure – for Uber in Dallas starting next year, Holden said. 

Uber has also teamed up with companies such as Bell Helicopter, Aurora, Pipistrel, Mooney and Embraer to make the flying taxis. The company, which has partnered with the Dubai government, expects to conduct passenger flights as part of the World Expo 2020 in Dubai. “What we’re doing with them is they’re going to be funding studies for demand modeling so that we can deeply understand pricing and network optimization in the Dubai area,” Holden said.

My Take:  Flying taxis?  Why not? This move takes Uber back to it’s roots – offering high end services to high rollers.  But why do I get the feeling that’s flying taxis are more hype than reality? See the No.1 reason Uber’s flying car is just a fantasy. Uber says it will be able to demo a flying car by 2020. But Uber and its CEO Travis Kalanick will find there’s a big problem with that plan. Battery technology just won’t be ready, especially in those three areas outlined in the article.

Harry’s podcast interview with Fortune reporter, Adam Lashinsky suggests that Uber, despite all it’s accomplishments, is really a company flying by the seat of its pants. Perhaps some day, Uber will make flying cars into a reality, but I’ll tell you this – I don’t want to be one of the first passengers on this Uber service.

Uber Suffers Bloody Nose in Its Fight to Conquer Europe [New York Times]

Sum and Substance: Uber suffered a setback to its global expansion plans on Thursday when a senior adviser to Europe’s highest court recommended that the ride-hailing company comply with the region’s tough transportation rules, potentially hobbling growth of its service across the Continent. 

The nonbinding opinion comes as Uber faces growing pressure worldwide after a string of missteps by its executives angered regulators and raised questions about the leadership of Travis Kalanick, the company’s chief executive. The European case centers on whether Uber should be considered a transportation service or a digital platform that merely connects independent drivers and potential passengers.

By designating Uber a transportation service, Maciej Szpunar, an advocate general at the European Court of Justice in Luxembourg, said on Thursday that the company should comply with European countries’ safety rules, as well as with other legislation that applies to the traditional taxi associations that are Uber’s main rivals across the region. “Uber cannot be regarded as a mere intermediary between drivers and passengers,” Mr. Szpunar wrote in an opinion that will be reviewed by the European Court of Justice, which is expected to make a final ruling by late summer.

“It is undoubtedly transport which is the main supply and which gives the service meaning in economic terms,” Mr. Szpunar added. “The service amounts to the organization and management of a comprehensive system for on-demand urban transport.” The opinion represents a bloody nose but not a full knockout for Uber in its ongoing fight in Europe, a region still crucial to the company despite rapid expansion in emerging markets like India. Uber has gained traction across the Continent, despite some restrictions or outright bans on some of its services, including on UberPop, its low-cost offering. The European Court of Justice typically follows the recommendations of its senior advisers, but it may still rule in the company’s favor.

My Take:  Uber became a force in the world largely by exploiting the grey areas of the law.  It’s taken awhile for regulatory bodies to respond to Uber’s aggressive tactics, but now they’re getting a grip on what Uber is doing.  Where there are ambiguities in the law, or no laws, authorities are setting things straight.

This European Court ruling is one more example of how they’re starting to reign in Uber’s ambitions.  The whole process is excruciatingly slow.  In the meantime, Uber operates, and loses more money – $2.8 billion in 2016 alone.  Somewhere in the midst of all this, there’s got to be a viable business model.  Right?  Why else would investors have put almost $15 billion in this venture?

Readers, what do you think of this week’s round up?

-John @ RSG