Lyft Will Launch Self-Driving Car Rides by the End of this Year

Today’s round up begs a lot of big questions about the future of Uber (and Lyft), but also some smaller, funnier questions. RSG contributor John Ince tackles these questions and more in today’s round up, where he covers Lyft’s self-driving cars plan, how companies are funding Uber’s rivals, and which fast food company is more popular for drivers.

RSG contributor John Ince tackles these questions and more in today's round up, where he covers Lyft's self-driving cars plan, how companies are funding Uber's rivals, and which fast food company is more popular for drivers.

Lyft will launch self-driving car rides by the end of this year [Washington Post]

Sum and Substance: Silicon Valley’s steady march toward self-driving cars took another step forward Friday as the ride-hailing company Lyft said its customers will be able to summon a driverless vehicle on some roads by the end of the year. The autonomy program, which is expected to launch in Boston before eventually spreading to other cities, could ultimately involve hundreds of thousands of vehicles, said company officials. Depending on the precise conditions of a trip — including the route, traffic, weather and time of day — riders who opt into the trial may be automatically picked up in a self-driving car built by one of a number of manufacturers working with Lyft, rather than a human driver.

“You’re going to see it. You’re going to see these vehicles on the street,” said Taggart Matthiesen, Lyft’s senior director of product. As with other companies that have been publicly testing self-driving cars, Lyft riders who participate in the program will be accompanied by test drivers sitting in the front seats of the vehicles. The moves reflect Lyft’s most visible push yet into the world of autonomy, which has so far been dominated by traditional automakers, such as Ford and General Motors, as well as tech giants such as Waymo and Uber, Lyft’s biggest rival in the ride-hailing space. Rather than trying to catch up to those firms by building vehicles of its own, Lyft’s focus is on designing a common software interface that automakers can use to put their cars on the road and interact with the public. The effort is part of a larger self-driving car division that Lyft is launching in order to capitalize on an increasingly competitive technology market.

“We’re building a way for third parties to plug their self-driving cars into our network,” said Luc Vincent, vice president of engineering at Lyft. In Boston, that will mean riders could be ferried about in vehicles built by Cambridge-based Nutonomy. The so-called Open Platform, which Lyft announced in June, could feature vehicles from other partners as well, such as GM and Jaguar Land Rover, which entered into a deal with Lyft last month. The result may be a mishmash of autonomous vehicles serving Lyft riders in various markets across the country — an outcome, the company said, that will accelerate the development of self-driving technology.

… Although Lyft has left much of the vehicle development to its partners, it will still build sensor packages and other hardware on a limited basis. To facilitate those efforts, Lyft said it will open a research facility in Palo Alto, Calif., later this year and hire hundreds of employees to work with other automakers there.

My Take:  Lyft seems emboldened by Uber’s stumbles. In the past Lyft has opted for partnerships over Uber’s go-it-alone approach in driverless cars. But here they’re building something on their own – hoping to establish a vital element in the autonomous vehicle future.

This move doesn’t put Lyft in direct competition with some of the heavy hitters that are entering this space.  Instead, by designing a common software interface for automakers, they’re positioning themselves as a unifying layer.  But all of this assumes driverless cars come sooner rather than later.

Somehow I don’t see the same future that many of these autonomous vehicle visionaries see.  I see a ton of regulatory and marketing problems.  I also don’t see how they’re going to solve problems like the weather and unreliable data transmission.  It’s telling that Elon Musk, CEO of Tesla, who probably knows as much about driverless cars as anyone, this week got into a very public debate with Mark Zuckerberg about the limitations of AI.  He has suggested that regulation is necessary to protect the public from the potential dangers.  What do you think?  Are driverless cars going to be a major factor in the next 25 years?

SoftBank, Didi Hand $2 Billion to Uber’s Biggest Asian Rival [Bloomberg]

Sum and Substance: Grab raised $2 billion from Didi Chuxing and SoftBank Group Corp. in the largest–ever venture fundraising in Southeast Asia, joining forces with two companies instrumental in driving Uber Technologies Inc. out of China. The deal cements an alliance between SoftBank, Didi and Grab, which competes against Uber in markets from Malaysia to Thailand. The Singapore-based ride hailing company said Monday it expects to close another $500 million from unspecified new and existing backers. That would take its valuation north of $6 billion, making it the most valuable startup in Southeast Asia, a person familiar with the matter said.

The record financing follows Uber’s retreat from Russia and China, massive markets where Uber spent billions but ultimately capitulated to well-financed and savvy local rivals. In Southeast Asia, it’s waging a costly war against not just Grab but also Go-Jek, which is holding its own on its home turf of Indonesia. The local players have thus far shown greater initiative in terms of launching services such as digital payments, said Ajay Sunder, vice president of digital transformation at Frost & Sullivan in Singapore. “Grab has been a lot more aggressive than Uber, making new acquisitions and launching new services in the region,” he said. “Uber will have to make a call at some stage.”

SoftBank has been the primary financier of the battle against Uber in Asia, first putting $5 billion in Didi alongside an early investment in Grab and India’s Ola. The Grab round is one of its largest investments in the region, coming on the heels of the establishment of its mega Vision Fund. It’s a vote of confidence from a company that backed Alibaba Group Holding Ltd.’s battle in China against first EBay Inc. and then Inc. Grab’s relationship with the Japanese company has blossomed since co-founder Anthony Tan first met with SoftBank Chairman Masayoshi Son at the billionaire’s Tokyo office in 2014. The two sealed a deal then with a handshake and SoftBank has backed every funding round since. Asia’s largest ride-hailing services are arming themselves for war with Uber, now that the cessation of activities in China and Russia allows it to focus on other fledgling markets around the world. Southeast Asia — a region on the cusp of an internet commerce boom with twice as many people as the U.S. — remains a wide-open field that could prove pivotal if Uber is to sustain growth beyond the U.S. and Europe.

…  Grab said it has 95 percent of third-party taxi-hailing in Southeast Asia and handles 71 percent of private vehicle hailing, and has almost 3 million daily rides. Grab may be preparing for an initial public offering, possibly within a year, said Frost & Sullivan’s Sunder. “When you have your existing, anchor investors putting in a larger share like this, that’s typically a way to fund the last investment stage before the IPO,’’ he said

My Take:  While Uber flounders, its rivals flourish.  We tend to focus mostly on what Uber and rivals are doing here in the United States, but there are bigger markets where ridesharing is growing even faster than here.  Softbank is playing a big role in most of those markets and this $2+ billion investment is just the latest indication that Uber is losing its grip on the worldwide rideshare market.  Softbank certainly has the capital with an estimated cache of close to $100 billion.  Last week there were rumors swirling that early Uber investors were trying to unload their shares and Softbank was a potential buyer.   With this news it appears Softbank as opted for a different strategy – funding Uber rivals.  This is not good news for Uber or its investors.

Lyft is partnering with Taco Bell for late night munchies pit stops [TechCrunch]

Sum and Substance: Lyft’s new partnership with Taco Bell seems like a weird cross-marketing campaign at first glance, but it could become a model for future tie-ups to come, and a new revenue opportunity for ride-hailing in general. Lyft and the fast food restaurant chain debuted “Taco Mode” today, which allows riders to add on a Taco Bell side trip during their ride with a simple tap within the app.

The tie-up includes other components of an “ultimate Taco Bell experience,” including custom swag and well as a special in-car menu, and free food giveaways. The stated explanation for the partnership on the Taco Bell side, according to a press release, is that already people often ask for a Taco Bell pitstop, especially on late-night rides, but the restaurateur believes there’s a missed opportunity in terms of people who want to ask but aren’t sure if that’s allowed. … Lyft is testing this out at first in a limited pilot – it’s running between July 27 and 29, and then again between August 3 and 5 in Orange County only between 9 PM and 2 AM local time. But the plan is to then “expand Taco Mode into additional markets by the end of the year, with an expected nationwide rollout in 2018.”

My Take:  In this business you never quite know what’s coming next.  Lyft used to be considered the more driver friendly of the two platforms – primarily because they offered passengers the option of in-app tipping.  Uber nullified that Lyft advantage last month with their own version of in-app tipping. This week, Uber announced a slate of driver friendly steps including in-app, 24/7 phone support, a $15 return fee on lost items, better passenger accountability on ratings.

Meanwhile Lyft comes up with this truly terrible idea called “Taco Mode,” which basically involves asking  drivers to wait in line at Taco Bell with three drunks in the back seat.  Apparently there’s an opt out for drivers, but the optics are still bad for Lyft. But wait… there’s yet another twist.

Lyft has just come up with something that could blow Uber right out of the water – from the driver’s perspective.  According to the new Lyft driver app, “Now Testing: Passengers’ destinations are being included on the Accept screen, giving you more control.”  Lyft already includes destinations on their scheduled rides.  If Lyft makes good on destination revelation on all rides, it would be a game changer for drivers.  Meanwhile, Uber is expanding its existing partnership with McDonalds. Which platform is more driver friendly now – Uber or Lyft?  What do you think?

Uber is going to provide accident insurance in France for free [TechCrunch]

Sum and Substance: Uber drivers and delivery persons in France are automatically going to get covered by accident insurance over the coming months. Uber has partnered with French insurance company Axa on this insurance product. It’ll go live this fall and it’s going to be free for independent workers. Hold your horses for a minute though. Before you think Uber is a nice company and wants to help its drivers, as ITespresso noticed, Uber is just complying with France’s latest labor law.

Starting in January 2018, tech platforms and marketplaces will have to cover independent workers making more than $6,000 per year on that platform (€5099.64). Emmanuel Macron has also promised during his presidential campaign that independent workers would be able to apply to unemployment benefits just like full-time employees. The current government is working on another labor law right now. While Axa and Uber didn’t say much about their new partnership, the upcoming insurance product is going to cover medical expenses, disability indemnities and survivor benefits. It’s still unclear if Axa is just going to cover medical expenses in case a driver can’t drive anymore, or more than that. But Uber calls it “accident insurance”, not “medical insurance.” As for disability indemnities and survivor benefits, many French companies provide life insurance (assurance prévoyance) as part of benefits packages. This should be something similar for Uber drivers….

Today’s news is just about France, but there’s a trend. Uber is launching personal injury and illness insurance in the U.K. — but it’s not free. Drivers in New York are also covered by Uber’s insurance policy — but you’re only covered when you’re driving for Uber. Drivers in the U.S. can also pay for a driver injury protection insurance.

My Take: I find all these different insurance provisions in different countries very confusing.  But one thing I’m not confused about – Uber doesn’t give in on anything unless they have to.  Their hand was forced here and if drivers want concessions on anything else, it’s going to have to be forced on them by regulatory bodies, marketing or personal pressure.

Readers, what do you think of this week’s round up? Are driverless cars the future? Will you be going into “taco mode” when this Lyft promotion reaches your market, or would you rather be in “Big Mac” mode with Uber?

-John @ RSG