Not so long ago, the ride sharing business hit its zenith. A survey of about 7000 respondents revealed that 53% of the US citizens used ride sharing services in 2017. This number witnessed an increase from 38% users in 2016. At the same time, Business Insider predicted that car ownership would drop by 80% by 2030. This will bring the number of passenger vehicles to 44 million in 2030 in the US, down from 247 million in 2020.
Ride sharing and cab hailing have a significant role to play in the plummeting numbers of car ownership. However, autonomous cars are set to chip in the lion’s share in this picture. Therefore, the time for buying a car seems to be receding into the background as self-driving vehicles come to the forefront.
Recently, ride sharing services have made commuting easy by offering features of convenience at low prices. Essentially, this shook the cab-hailing business as people didn’t have to wait to hail their ride. An app made all the reservations for them, and they got a ride right outside their doorstep. But, as self-driving cars enter into the landscape, the downfall of the cab-hailing and ride sharing businesses seems inevitable.
Here’s is an in-depth look at the implication of driverless cars on the ride sharing and cab hailing companies.
The perks of autonomous cars
Consumers prefer convenience over everything else. Uber, Lyft, and other services of the breed allow customers to seamlessly travel from point one to point two with a few taps of their app. But driverless cars up the ante of convenience even more.
These offer enhanced safety, more efficient route, and a decline in the transportation costs.
At the same time, the costs of maintaining autonomous cars are also low as shown below.
Experts also point out that the impact of electric-ride shares on street planning will be significant. Robot cars don’t need to stop to park. They can drop off the passengers and start off instantly to pick new ones. This has the potential to save parking space, which can open avenues for new uses of land like parks, housing, and more.
A report concludes that autonomous cars will introduce a cut of 75 billion square feet of space occupied by parking space. These estimates add up the disappearance of about half of the present parking lots in the US in the coming 30 years.
Implications of robot cars on ridesharing and cab hailing businesses
The above-mentioned factors stand in favor of the growth of autonomous cars. At the same time, they leave a different imprint on ridesharing and cab hailing. These businesses will see a critical disruption unless a switch to a driverless car plan is made.
Most of all, with the mainstream use of autonomous cars, drivers are bound to be ousted equating to massive unemployment in the sector. As consumers shift to the use of autonomous cars and carpool these vehicles, the demand for traditional car services, taxes, and so will dwindle.
Ridesharing services like Uber and Lyft have already revealed their prototypes of self-driving car fleets. It is likely that ridesharing companies will stay afloat. In fact, they’d grow with the new fleet too. The cab-hailing industry hasn’t acknowledged the infiltration of driverless cars though, which endangers their future.
The president of Lyft, John Zimmer indicates that Uber and Lyft cover only 0.4% of kilometers in the US. However, he outlines that as the autonomous tech matures, the ride-hailing business will swell to cover between 40-80% of the distance.
Factors supporting the growth of driverless vehicles
A major impediment to the infiltration of self-driving cabs is the acceptance of the vehicle itself. Luckily, it’s a shrinking fear. Consumers are starting to warmly welcome robot cars as they become familiar with them and gain experience.
In fact, a survey by the World Economic Forum and Boston Consulting Group confirmed these results. The participant pool stretched to include 5,500 people in 27 cities across ten countries. 58% of the respondents agreed to ride in an autonomous car. Simultaneously, 69% expressed their willingness to hail a partially self-driven vehicle.
In the current times and the foreseeable future, Uber’s cabs are only partially self-driven, as an engineer sits in the passenger seat. The engineer works to collect the data from the car. He might even take over the ride if necessary. A tablet placed in the backseat also allows passengers to view the objects around the vehicle.
These initiatives work to allay customer fears and strengthen their confidence in robot cars. This will assist in better penetration of the autonomous vehicles. One of the product managers at Uber’s Advanced Technologies Center in Pittsburgh, Emily Bartel, opined similarly. Bartel highlighted, “We’re working towards developing a transparent experience that provides riders with enough information about the trip and the vehicle system to feel safe and confident.”
Wrap up thoughts
Put simply, autonomous vehicles offer convenience and are less costly. These also pose more significant opportunities for the ride sharing services. Ride-hailing businesses like Uber, itself, will benefit as they are working on phasing in robot cars. The cab-hailing business needs to follow suit though. It’s fated to a downfall if it fails to employ autonomous cars. As self-driving vehicles become widespread though, the drivers will face severe unemployment in the sector. Nowadays, we buy any car, with the help of car loans, however, will we continue to do so, if autonomous cars truly take over?
About Michelle Joe: Michelle Joe is a blogger by choice. She loves to discover the world around her. She likes to share her discoveries, experiences, and express herself through her blogs. You can find her on twitter: @michellejoe524