Get ready for a thermonuclear autonomous ride-hailing war

On Thursday, Ford CEO Mark Fields announced the company’s first autonomous car will arrive in 2021. That big news—even if the launch date is timid from the company that invented the first affordable car—but the even bigger story is a ride-hailing app will be the easiest (and cheapest) way to ride in the unnamed autonomous car.

Ford did not name the ride-hailing app it plans to launch in major cities, but it is clear the company is positioning for its own stake in the ride-hailing industry. Its not hard to see why,estimates from economists and transport experts say car autonomy will reduce car sales and car ownership, which takes a slice out of the automotive industry’s pie.

Uber, Lyft, and Didi are the three major firms that stand to gain from the reduction in car ownership, but they won’t be alone in the battle to win the ride-hailing market.

Automotive firms are gearing up for the battle of their lives. General Motors spent $600 million on a 40 person automation startup; Volkswagen, GM, Daimler, BMW, and Ford are all working on ride-hailing apps; Toyota, GM, Ford, Audi, BMW, and others have opened Silicon Valley offices and spent more on R&D than ever before.

Not to mention Apple and Google, the two most valuable companies in the world, are both working on self-driving and ride-hailing services.

A new world ride-hailing war?

Automotive firms are putting on their cooperative face, but come 2020 there will be thermonuclear war for ride-hailing market share. Every automotive firm will have its own ride-hailing app and software will be inserted into the car to make sure Uber, Lyft, or Didi can’t hijack it.

For Uber and Didi, that might force them to acquire an automotive manufacturer. For others that have less than $5 billion tucked away, it likely means lights out. Lyft could become an independent subsidiary of GM (or another larger company), a similar situation could play outin Europe with Gett and Volkswagen.

Partnerships may work for a time, but automotive firms have the power. Apart from Uber and Didi—who are building their own autonomous systems—automotive manufacturers will provide the hardware and software, putting them in a clearly advantageous position.

Volvo and Fiat are providing 100 cars to Uber and Google, respectively. It should be noted these two firms will have limited reach in the self-driving world, compared to major automotive manufacturers. In the future, we may see Uber, Google, or Didi dictate the design and production of the car, to meet standards, while the two firms have independent leadership.

Room for more?

The ride-hailing industry should look like the auto industry today, once the dust clears. Ford, GM, VW, and the other major suppliers will have the largest volume of cars on the road, while others attempt to win customers over with unique design, better software and services, or lower rates.

This only works if automotive manufacturers block ride-hailing services from adding software to their cars. If not, Uber takes control. Most affiliate ride-hailing with Uber, it will be nearly impossible for one of the upstarts (apart of Didi) to match the purchasing power and scalability of Uber.

Apple may make inroads, as it is able to provide the full package, but it may take the iPhone maker a few years to reach the scale of GM and Ford, who in this scenario are providing cars directly to Uber.

For the health of the auto industry, the former option; having manufacturers provide the ride-hailing services for their own cars, looks best. Some manufacturers will be unable to compete with Uber’s pricing and speed, but at least in this future customers have the choice of several operators, rather than the entire industry belonging to Uber.

The future of car ownership

It is unlikely that Ford, GM, and others will ban ownership out of the gate. Instead, it is likely that changes in cost, city planning, and laws will make ownership more exclusive and less enjoyable.

Prices will be too high for most families, while ride-hailing becomes much more affordable.City planners will remove parking garages and ban parking on the side of the road for extended periods of time. Driver’s licenses will become near impossible to obtain, unless you have clear sight, a clean record, and perfect understanding of all road signs.

Some may continue to purchase cars and be distrustful of autonomy, but most will conform once the economical advantages become obvious. Even fans of cars that add customizations will start to see their pastime fade, as the steering wheel, brakes, and other manual controls are removed in favor of tablets and desks.

Automotive manufacturers and tech firms may attempt to make the transition from ownership to hailing more attractive through customization. When you enter the autonomous car, your Spotify playlist is synced to the car stereo or your YouTube video moves to the large tablet. In the morning, the car plays soothing tunes and dims the lights. If you’re a big NFL fan, perhaps Google will let you watch the livestream for free if you take a ride.

We may see different business models rise, including a rent model where you can keep a car in close permitter for 24 hours. That may be useful for weekend trips to the countryside, where the ride-hailing services are unavailable. As the systems become more fine-tuned, it may deploy a car to your doorstep in the morning before you even order it.

All of this is highly speculative, but one thing is for certain, a new warzone is opening in the transport industry and everyone is fortifying their positions.

Would it make sense for Tesla to buy Lyft?

This morning, after hearing about Tesla’s “big announcement” coming this afternoon, I speculated on Twitter that maybe the electric vehicle iconoclast was looking to buy ride-share firm Lyft.

It would definitely be a “new product” for them. But I was wrong, mea culpa.

Turns out it’s a new battery pack, a longer range, and a new “ludicrous” mode that will allow Teslas to be the fastest production cars on the road. All noble things, and worthy of announcing, if not necessarily worth building up so much beforehand.

But…what if?

Lyft has reportedly spurned a bid from current partner GM a week ago. GM plans to rolls out their new electric Bolt via Lyft as part of this partnership, and Tesla’s Model 3 competes with the Bolt.

Since that news, rumors have also emerged that Lyft had also reached out to Apple, Google, Amazon and competitors Uber and Didi to discuss a sale.

Uber founder Travis Kalanick told his investors that Lyft wasn’t worth more than $2 billon, despite having a reported $1.4 billion cash in the bank.

Lyft slapped him and said they really didn’t want to go to the M&A prom anyway because they’re washing their hair that night. Recode reported that everyone has a price, and even with a valuation estimated at $5 to 6 billion, Lyft’s was reportedly $9 billion.

Kalanick also said he didn’t want the anti-trust issues that would ensue, but it’s not entirely clear if the two money-losing unicorns mating publicly like this would warrant federal scrutiny.

“(A merger) could take the pressure off margins for the combined company,” one fund manager who follows next-generation auto tech told ReadWrite. “But then it really just looks like a cab company with an app. We have those already. There’s no real monopoly, in most markets, in their core business today that would damage average buyers’ power.”

So if Lyft’s looking for an exit, Tesla may be the sign on that door.

It’s hardware versus software…again

The intersection of several trends and technologies may soon provide the place for Tesla and Lyft to collide.

Electric vehicle growth will likely be spurred by autonomous vehicle development, and carmakers from Volvo to Ford to Musk himself are now counting the time until a fully autonomous car hits the road in months, not years.

Add to that a sharing economy increasingly treating car ownership as a commodity and not status symbol, and it could become a challenging time to sell $135,000 electric cars no matter how awesome. And they are, without a doubt, awesome.

And it’s an interesting time for the entire “next-generation” auto industry as a whole, as it becomes clear that humans will not be behind the wheel in the future, or even if there will be a wheel in the future.

While this may seem mind-blowing to most car owners today, it’s just a new chapter in the Silicon Valley story of “Hardware vs. Software.”

In this corner, Team Hardware. It’s made up of virtually automaker on the planet, including Tesla, as well as car parts makers, agricultural and construction equipment companies, trucking firms, and ship builders. They’re looking for what happens next, and all roadsigns point towards “metal-as-a-service.”

Whether it’s an entire vehicle or just some of its components, the decades-old relationship with buyers for these huge brands is being unpacked by the new sharing economy audience and broken down into the basket of services that their products actually provide.

Think of all of the advertising you’ve watched over the years from carmakers. Now, the attachment to the idea of owning a certain type of car, or a certain brand of equipment, starts to look gauzier by the day.

In the other corner, Team Software. That includes the ride-hailing giants like Uber and Didi, flush with cash but concerned everyone will figure out “oh, it’s just a cab company, kind of.” Add in Google, Baidu, retailers like Amazon, and shippers like FedEx — who’ve always looked at their fleets as dots on a global last-mile logistics planning map.

Those deliveries don’t happen without wings, wheels or hands. Or possibly, whatever appendages drones will use.

An integrated delivery ecosystem, whether it delivers a person or package, is their end game. If that means a new dimension in fleet management, so be it.

Add to that all of the safety concerns, regulatory needs and data infrastructure issues, and it’ll be a wild time take a ride — or even cross a street  — in the coming years.

Mark your calendars: 2021 will be huge for autonomous cars

Ford revealed on Tuesday its intention to launch a fully autonomous car in 2021. Speaking at Ford’s research lab in Palo Alto, California, CEO Mark Fields said the company plans to launch a “level four vehicle, which means it won’t have a steering wheel, gas or brake pedal.”

It is the first public statement from Ford on a fully autonomous car — but rivals like BMW, General Motors, and Audi  all want to have a commercial driverless vehicle available a year earlier, by 2020.

And rumors are that while Tesla’s Elon Musk promised full autonomy by 2018, his firm’s latest update of their AutoPilot system will provide full autonomy in months.

In a Bloomberg interview, which we quoted above, Fields mentions a ride-hailing (or ride-sharing) app that the company plans to launch in major cities. Fields didn’t disclose the app’s business model or its launch date at the event.

From what we can gather, Ford will deploy thousands of autonomous cars, but also sell the car to customers. Fields did not say if the price of the car would be more than the average vehicle, though some expect the autonomous features to come in a more expensive package.

Ford also didn’t mention any major partnerships with Google, suggesting that the automotive giant wants to go it alone. It has made four strategic investments in startups, which includes$75 million to Velodyne LiDAR.

All automakers ramping up efforts

Fields also revealed before the announcement that Ford intends to double the size of its Silicon Valley research lab, to 280 employees.

Ford hasn’t made as much noise as its rival General Motors, which acquired Cruise Automation for $1 billion and invested $500 million into ride-sharing app Lyft. GM also reportedly offered to acquire Lyft, according to The Information, but Lyft rejected the offer.

That lack of noise may be troubling for investors that want to see Ford compete heavily in the market, though it could also play into the company’s favor if GM ends up writing off the Cruise Automation acquisition and losing market share to self-driving competion,

Toyota steers millions into U. Michigan AI project

Toyota has pledged $22 million to a four year artificial intelligence, robotics, and autonomous driving project led by the University of Michigan.

The investment will be spread throughout the four years and go towards all sorts of tech projects, including stair climbing wheelchairs, cameras for blind people, and autonomous cars.

“Toyota has long enjoyed an excellent working relationship with the University of Michigan, and we are excited to expand our collective efforts to address complex mobility challenges through artificial intelligence,” said Toyota Research Institute CEO Gill Pratt.

“We look forward to collaborating with U-M’s research faculty and students to develop new intelligent technologies that will help drivers travel more safely, securely and efficiently. We will also focus on expanding the benefit of mobility technology to in-home support of older persons and those with special needs,” she added.

Earlier this year, Toyota announced a $1 billion research facility for autonomous vehicles in Ann Arbor, Michigan. That is also in collaboration with the University of Michigan.

This is Toyota’s third self-driving campus

The facility is Toyota’s third in the U.S., after Palo Alto, CA and Cambridge, MA. All three are connected to the local university, in Palo Alto that’s Stanford, in Cambridge its MIT.

Toyota clearly sees America’s universities as a way to advance its self-driving technology without being too active in the industry. Others, like General Motors, have followed a similar model.

The Japanese automaker still seems hesitant to make a large play in the autonomous market, despite the investments in research centers. In 2014, it said it had no interest in autonomous cars, and since then has pushed testing to its luxury car brand Lexus and research to universities.

That might be a smart strategy to avoid public scrutiny and lower the costs. The tech centers will retain their value in a few years, while General Motors $1 billion acquisition of Cruise Automation or Tesla’s large expenditures on AutoPilot will not have any value if they don’t win.

Mark your calendars: 2021 will be huge for autonomous cars

Ford revealed on Tuesday its intention to launch a fully autonomous car in 2021. Speaking at Ford’s research lab in Palo Alto, California, CEO Mark Fields said the company plans to launch a “level four vehicle, which means it won’t have a steering wheel, gas or brake pedal.”

It is the first public statement from Ford on a fully autonomous car — but rivals like BMW, General Motors, and Audi  all want to have a commercial driverless vehicle available a year earlier, by 2020.

And rumors are that while Tesla’s Elon Musk promised full autonomy by 2018, his firm’s latest update of their AutoPilot system will provide full autonomy in months.

In a Bloomberg interview, which we quoted above, Fields mentions a ride-hailing (or ride-sharing) app that the company plans to launch in major cities. Fields didn’t disclose the app’s business model or its launch date at the event.

From what we can gather, Ford will deploy thousands of autonomous cars, but also sell the car to customers. Fields did not say if the price of the car would be more than the average vehicle, though some expect the autonomous features to come in a more expensive package.

Ford also didn’t mention any major partnerships with Google, suggesting that the automotive giant wants to go it alone. It has made four strategic investments in startups, which includes$75 million to Velodyne LiDAR.

All automakers ramping up efforts

Fields also revealed before the announcement that Ford intends to double the size of its Silicon Valley research lab, to 280 employees.

Ford hasn’t made as much noise as its rival General Motors, which acquired Cruise Automation for $1 billion and invested $500 million into ride-sharing app Lyft. GM also reportedly offered to acquire Lyft, according to The Information, but Lyft rejected the offer.

That lack of noise may be troubling for investors that want to see Ford compete heavily in the market, though it could also play into the company’s favor if GM ends up writing off the Cruise Automation acquisition and losing market share to self-driving competitors.

GM hints at autonomous Bolt EV coming to Lyft

General Motors is confident it will have an autonomous, all electric car on the road sooner than most expect, available on Lyft’s ride-sharing app.

Speaking to Tech Insider, Pam Fletcher, the chief engineer of autonomous tech at GM, hinted that the tech is progressing faster than most expected and a consumer model could be coming soon.

“We have not made that announcement yet, but what I would say is this is all coming much faster than people anticipate, so I’ll say that much,” said Fletcher. “We are working on an on-demand ride-sharing network with Lyft, it’s not something we are thinking about, it’s something we are very much readying for consumer use.”

GM has already tested ridesharing apps for autonomous cars at its test facilities, but bringing that to public roads would require quite a hefty change in the legislation regarding autonomous cars.

Transport Secretary Anthony Foxx has hinted at federal regulations for autonomous cars in the near future, but we suspect driverless vehicles will remain off limits, at least in urban areas, after the Tesla Model S fatality has changed a lot of people’s opinions on self-driving.

Is GM self-driving’s dark horse?

It does show that GM could be the dark horse in the autonomous race, surpassing early favorites Google, Tesla, and Uber. In the past year, GM has invested $500 million in Lyft and$1 billion to purchase Cruise Automation, bulking up its autonomous prowess.

The automaker started testing its autonomous tech on public roads as well, bringing two customized Chevrolet Bolt EV cars to California earlier this year for testing.

Instead of selling the car, GM appears to be looking into a new driverless fleet that works inside the Lyft app. Uber, Lyft’s main rival in the U.S., is reportedly planning similar functionality for its self-driving fleet.

Google and Tesla may also be planning ridesharing or car-loaning services, instead of customers purchasing a car outright. That might not excite customers wanting to own their own autonomous car, but may provide means for millions to get around the city in a car for the first time, boosting mobility and productivity for all.

For autonomous vehicles, no tech is an island

The autonomous car industry is quickly becoming one of the most valuable emerging technology markets, but it will be hard, if not impossible, for manufacturers of hardware and software to reach a global audience without extensive partnerships.

That’s according to research firm Vision Systems Intelligence, which says that manufacturers will have to build relations with chip, sensor, mapping, and development tool firms to make its autonomous car functional on all fronts.

“No one company owns all the expertise necessary to build an autonomous vehicle. From low-level component suppliers to modules or systems, each domain is a highly complex field in itself,” say Phil Magney, founder and principal of Vision Systems Intelligence.

In the infographic above, Vision Systems Intelligence shows the various sectors of the autonomous car market. What it doesn’t show is the partnerships already established, like Google and Uber’s mapping partnership on Android, or General Motors acquisition of Cruise Automation for $1 billion and $500 million partnership with Lyft.

Other partnerships between ‘autonomous solution’ firms and suppliers are most likely active, though we doubt many are disclosed.

It is interesting to see what blocks companies are active in. Intel is apparently active in processing, connectivity, and security/safety, while Nvidia works on autonomous solutions, processing, and algorithms. Google is only active in autonomous solutions and mapping according to the infographic, though we suspect the search giant is working on its own development tools and sensors for the autonomous car prototype.

Partnerships are always important for emerging technologies to gain traction, but the autonomous car market will require a vast amount of interoperability between software, hardware, and services, similar to the smartphone or computer but on a larger scale.

Some manufacturers are showing a willingness to work together, Fiat Chrysler was reportedly in talks with Uber and Amazon, on top of its Google deal and General Motors has once again hinted at a possible partnership with Google.