BP Chief Economist Says AVs Will Cut Uber Fares by Half

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#1

A recent report by BP's chief economist Spencer Dale stated that the inception of AV's would cut ride share company fares by at least 50%. This is based on a performance rating model that calculates the operational overheads as well as the impact of EV's on the transportation industries costs.

To put it in simple terms, autonomous vehicles (AV's) will replace the need for a driver. This will reduce the cost of a driving fee. AV's will still incur a maintenance cost, but that is already factored into the equation. Add to this the price of an AV, which will be lower than a human driven car due to the technology installed. While new technology might be expensive, the moment it becomes a mainstream system, its manufacturing costs become fully automated and low. The human factor is not the only reduction in expense, the transfer from fossil fuels to electricity (EV) will further reduce the cost of operations as well as of maintenance.

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Based on these findings, Dale expects that by 2030, there will be a significant change, he said: "As a result of this, what we expect to see in the 2030s is a huge surge in the number of kilometers traveled by fully autonomous mobility-service cars."

While Uber is heavily invested in AV's and has a deal going on with Volvo for 24,000 AV's to be delivered to the US between 2019 and 2021, other non-gig economies are starting to compete for that market. Waymo recently received a license as a TNC in Texas, which means that they intend to start up their own AV service once they become fully operational.

Once gig economies and other services take over the scene, AV's will become the new mode of transportation. As Uber's head of automotive alliances Jeff Miller said: "It only becomes a commercial business when you can remove that vehicle operator from the equation."

Dale went on to state in the BP group's 2018 Energy Outlook report that by 2040, 15% of all cars will be electric, but this will contribute to 30% of all the kilometers being driven. Dale stated "The low running cost of electric cars relative to conventional international combustion engine cars means the vast majority of this fully autonomous shared mobility will be electric. As a result of which, that's what increasing this intensity [in passenger kilometers]."

If you were worried that the transfer of technology would impact BP, rest assured that this is not a major concern, Dale stated in the report that "The impact on oil demand is pretty small, it's about 2 million barrels a day. (2% of the global use per day) One reason why it's so small is that we think quite a significant part of the impact of car manufacturers selling more EVs will be offset by those car manufacturers investing less in other types of efficiency in order to achieve their vehicle efficiency standards."

#2

Rides so cheap who needs to get a room anymore?

#3

Or, they mean that autonomous vehicles will help cut congestion in cities and reduce the number of traffic accidents.

#4

Will never happen. Imagine uber having to pay for the expenses of owning a fleet of cars. Why would they do that when all the drivers pay for all the expenses now?

#5

Then why was Uber trying to buy 100,000 autonomous Mercedes and BMWs in Europe? If you do not see the future, I hope you have something to fall back on when we are replaced with robot cars.

#6

A fleet of cars would be cheaper than a bunch of drivers they have to share the fare with. Robot cars will not strike, complain, or file class action lawsuits demanding to be employees and compensated for their expenses.

#7

Here is the Trillion Dollar Question? Which Insurance Company is about to insure a Computer to Drive people? How many of us Freely Admit to our Insurance Company were Rideshare Drivers? Driving is a Skill that you have to develop. A Computer is incapable of certain abilities that a Skilled Driver is. Is it Possible for Self Driving Cars? I’m sure, is it SAFE? Not even close. Ever look before you cross an Intersection on a Green Light? Why it’s your right of way? Ooh cause you’ve seen things, ooh ya Skilled Driver, you know things like that…

#8

@eric I am going to assume that this is the first you have heard of autonomous cars? Am I guessing this may be the first article you have read? You have not been paying attention to this technology over the last, say, ten years? You do know that our commercial airlines have been flying themselves for over 30 years, right? Fortunately for pilots, they are still required, by regulations, to be in the cockpits. I hope that I have 5-10 years before I am replaced by a robot car. I was figuring maybe 10, but with the big push these days and the latest technology, five years may be more realistic. As far as insurance for a robot car, it may be cheaper than a human car. If you have been paying attention to the testing of these autonomous cars, most of the crashes they have been involved in have been a human error from the non-autonomous car that was involved. Do you see all the cameras and sensors on this test car? You do know that they are testing right here in Nevada to see how they handle in the dust, right? And you know there are autonomous cars and vans already deployed for public transportation in parts of Europe, right? Do you have your head in the sand, or is this news to you?

#9

OMG @donna I LOVE when People get insulting on the Internet. I work in San Francisco let me know when you want to meet up… But of course, your complete knowledge of the " Technology " Does lead to ask WHY ARE You Driving Uber and or Lyft? Clearly, you should be at GOOGLE or GM. Your obviously underemployed and clearly have better options. I’m amazed someone so bright as yourself would even stoop to drive for a Rideshare. And on the Plane part. Pilots are ALWAYS at the Cockpit, haven’t seen the Pilotless Plane yet. Also, Asiana Airlines Killed 3 people here in SFO due to AUTOPILOT Error. Or was your head in the Sand on that one… Let me know if you want to meet up…

#10

No @eric, I do not keep up with Auto Pilot. I was using that as a reference to your seeming lack of knowledge in autonomous cars. I am not underemployed. I am not employed at all and I love it. Rideshare gives me the freedom to drive and explore my options for remaining unemployable when I am replaced by robot cars. Pilots are on the plane per regulations. Maybe we will be lucky and regulations will keep us behind the wheel. The goal is to get the wheel and pedals out of the car though. I do not know if you are aware that many occupations are on their way to automation. Maybe living in Las Vegas gives me an advantage to seeing the future with the annual CES show here, where most of the future technology is introduced. You being in the Bay Area where most of the technology is developed, I think would give you some insight. I am sorry I sounded insulting but I am amazed at how many people are in denial and do not see the robot future that is going to obsolete millions of jobs and businesses. I am not being pessimistic here. I am being optimistic and exploring where I fit in, in an automated world. If I remain in denial, when the day comes, I will not be ready to take advantage of it. I will be sitting in amazement with millions of the other deniers wondering what we will do for a living when robots have taken our ability to earn a living. There are 4 Indians doing my old JOB. I used to say “outsource me now”, but the joke is on me. I will be outsourced again, but this time by a robot car.
Oh, I do not have complete knowledge of the “Technology” I did not realize it was this far advanced. I figured I have maybe 10 years to drive rideshare. I am thinking now that I may be lucky to be able to do it for 5 more years.

#11

Hi Donna and Eric, cool down guys, and Eric, the invite is great if the coffee is free. However, back to business. It is obvious that AV’s will cut out the driver expense, but since most drivers earn so little, the expense Uber will cover will equal that of the driver today. What the paper does not factor in are the extra costs that new technologies bring with them, and in this instance we are talking about replacement hardware, software upgrades and shit load of cyber security to stop hackers invading AV’s. These extra costs will outweigh the driver cost. Add to this that currently the drivers are paying for the car expenses, including car costs, fees, maintenance insurance etc. An AV will be all on Uber, which means the costs for driving will not go down, but UP!

#12

Yup, I concur with you man, (Andrew), I also think that AV’s will cost more than human driven cars. At least for the first decade of their integration. Once the big companies crease out all the wrinkles in system and totally automate road transportation, basically removing the human element from the roads. Well, just like disposable diapers and cell phones, does anyone remember what it was like without them? Sure, you’re over 50 right? and do you think you can live without them now? No, and no one remembers what it cost to use a flannel diaper or live without constant social networking. In my opinion, it doesn’t matter if costs go up or down, no one will be around to remember. We all have short memories, just like when we go to vote.