Google, Tesla, Apple and a host of auto companies are in a race to bring autonomous driving to the masses.
Uber looks like it will get there first.
Later this month in Pittsburgh, customers will be able to ride for free by summoning self-driving Volvo XC90 sport-utility vehicles, Bloomberg reports.
O.K., these Volvo cars won t be 100 percent autonomous. Humans in the driver s seat (highly trained engineers) will supervise the cars. The Volvos will have dozens of sensors that use cameras, lasers, radar, and GPS receivers cars, Bloomberg says.
A bell rings signaling when a human should take control of the car and chimes again when the car s system takes over.
In addition, Volvo has agreed to a $300 million alliance with Uber to develop self-driving cars that will be ready for the road in 2021.
And, Uber says it acquired Otto, the San Francisco-based self-driving trucking firm that was founded only earlier this year and has built a 90-person team.
This is Uber s big push to go big into autonomous driving and chasing after potential competitors, specifically Google.
Travis Kalanick, Uber s CEO, told Bloomberg, that for passengers, prices per mile will fall in a driverless Uber compared to a private car.
Of course, the move raises questions about the fate of Uber s on-demand workforce. If computers succeed in doing the driving, what will become of the Uber driver?
As it spends, Uber may have to hurry to get to profit. An expert in equity valuation says the company, reportedly worth $62.5 billion, is really worth $28 billion, Bloomberg reports.
His reasoning? The economic model is challenged. Aswath Damodaran, a professor who specializes in equity valuation at NYU s Stern School of Business, said:
I believe that a significant portion of their expenses are associating with maintaining revenues rather than growing them….In effect, it looks like the business model that has brought these companies as far as they have in such a short time period are flawed, because what allowed these companies to grow incredibly fast is getting in the way of converting revenues to profits, since there are no moats to defend.
Above: Outside of Uber s San Francisco headquarters. (Karl Mondon/Bay Area News Group)
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