Rideshare giant Uber has been dabbling in self-driving technology for several years now. After numerous expensive mistakes and major roadblocks, Uber needs to start making money faster than it spends it.
What is a rideshare company’s biggest expense, however? Paying drivers. It’s that expense that makes self-driving technology so appealing to Uber.
Uber Partners with Volvo
Uber announced on Nov. 20 that it will partner with Volvo. This partnership will add up to 24,000 of the automotive company’s self-driving cars to its network.
Uber’s agreement with Volvo began two years ago when it announced intentions to do research into the idea of self-driving cars. This agreement ups the number of self-driving cars in the partnership. Uber will be working with the same model it has been working with for the last few years—the XC90 plug-in hybrid. Uber will have control over the systems at this point, although Volvo is still on the hook for the car components.
This partnership may come as a surprise to those who remember the lawsuits from Uber’s competitor in the self-driving research Waymo. However Fortune reports that Uber has been testing Volvo’s cars for over a year, and hopes the acquisition of the additional vehicles can help them overcome their trend of losing around $600 million per quarter.
What if Self-Driving Cars Fail?
What if Volvo’s automated cars don’t work? Or what if governmental regulation puts more restrictions on the new technology? Is this the best case scenario for drivers?
Not everyone thinks so. Inc.com contributor Erik Sherman speculated that, at best, the failure of automated driving technology would cause a temporary increase in fares for drivers. However, this increase wouldn’t fix the problem.
Because Uber is running out of funding and needs to be able to go public and turn a profit soon, a failure of automated technology would require them to jack up rates in order to make money and retain drivers. While this may sound great, Sherman pointed out that such an increase generally only results in a pay boost for a little while. Soon, other drivers would be attracted to the platform because of the higher pay, resulting in too many drivers for the number of rides. Thus, while drives may be making more, they would probably also see a steep drop-off in the number of rides.
What Should Drivers Do?
Drivers have a few options to prepare for the future of the gig economy. The top one would probably to consider diversifying the platforms you work with. For example, consider switching to Lyft before the end of the year to take advantage of their new driver signup bonus.
You could also consider making non-rideshare platforms part of your business. Food delivery platforms may also move toward robotics for delivery, but their progress has been slower to this point.
On a more global scale, giving great customer service will make it consistently harder for robots to match human service. The failure of self-driving technology may not improve pay rates permanently for drivers. However, it would at least keep people involved in the gig economy.
