Waymo AV Gears with Jaguar and Lyft to Pick-Off Uber


(Brandon Bhangoo) #1

Waymo and Jaguar Land Rover are now partnered in a collaborative deal where JLR will provide Waymo with their I-Pace electric SUV as the second vehicle type to make up Waymo's growing fleet of driverless taxis.

JLR will provide Waymo with 20,000 units of the I-Pace over the first two years of their production plan. In the meantime, Waymo will test the I-Pace on US roads around the end of 2018. Waymo plans to introduce full AV cars onto the roads by 2020, and they will now work together with JLR to fit the various AV systems into the I-Pace production process.

The I-Pace will provide a high market car for their AV taxi service, and they expect to make around 1 million trips daily once their fleet is on the road. This means that they expect to make about 50 trips per car on a daily basis.

At the moment, Waymo has approximately 600 Chrysler Pacifica minivans in its fleet. These are larger than the I-Pace and are already available in full AV mode in their test site in Phoenix Arizona. The I-Pace is Waymo's answer to GM's Cruise project that is using Chevrolet Bolts in SF and Arizona.

Based on the fact that JLR is a UK based company and is owned by Indian TATA, we expect that Waymo will announce two new markets for their future electric AV, one in the UK and the second in India. Which will make Waymo a direct contender against Uber and Ola in both markets. Add to this that JLR has been in a partnership with Lyft for the past year and has invested millions in developing their self-driving technology together with Lyft. The fact that Waymo is also in collaboration with Lyft. Provides us with a peek at how Lyft intends to broadside Uber in the US. This triumvirate stands in our test of how the future will look in this industry, where a rideshare platform will link with an AV tech company and an automaker to manage an AV taxi service.

The future of "ride-hailing" is expected to be in the hands of fleet management systems, such as that one that Waymo intends to control. However, let's look at the economics of such an endeavor and how the syntax is confusing.

  1. Ride-hailing is another way of saying Taxi.
  2. The current business model for rideshare gig is that capex is owned by the drivers, and the app operator only pays for customer services, marketing, and app development. This means that the new business model is to own the vehicles (Capex) and as such, they must be able to "buy" 20,000 I-Pace and maintain them.
  3. The future business model looks more like this: Waymo will partner with JLR where JLR will provide the cars and the parts and maintain them for a percentage of the income generated by Waymo's control over the AV's via their app and servers. This model makes sense since it distributes the costs and the income according to weighted values.
  4. The new "gig economy" will be replaced by an automated taxi service which will operate in the same fashion that current taxi apps work. The AV will either wait to be called by the app, or it will negotiate a pick up from a hailing pedestrian. There will also be AV taxi ranks, where they will stand in line and wait for passengers.
  5. The new business model will pair automakers, rideshare app operators and AV tech companies into a combined or symbiotic relationship, which will eventually develop into a merged company. In other words, expect Waymo, JLR and AV tech companies to form an alliance via a subsidiary that will be the new AV taxi company, owned by different companies that provide the hardware, software, and services to manage an end-to-end service.

Conclusions

Everyone involved in auto-making and driving is gearing up for the big wave of change that is coming to society. Whether it reaches us in 2020 or 2022 is irrelevant. The wave of change is coming, and with it, the changes will be enormous. These changes will include:

  1. The creation of new organizational structures to manage AV taxi services
  2. The creation of smart city traffic systems for AV and human interface.
  3. The slow erosion of human drivers from the roads.
  4. The slow eradication of driving as a profession.

My final word: Could the accident that took the life of Elaine Herzberg, the 49-year-old pedestrian in Tempe, Arizona be the last nail in Uber's coffin? With the companies continued shrinkage, problems in London and Egypt, as well as rising competition from Didi in Mexico. A continuous onslaught of legal issues to deal with at home, is Dara Khosrowshahi facing an extinction level issue? Will an IPO save them or bury them? Can Uber find a partner that will take the AV from them, allow them to be just the app platform and collaborate with an auto-making giant, such as Toyota and Volvo? If they take this route, the Lyft route, will it save Uber?

So many questions, but it seems that Alphabet has targeted Uber and intended to eradicate them, and the hand of fate seems to be helping with this plan.


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