Will self-driving cars replace Uber and Lyft drivers?

Colin Lalley 1600


Colin Lalley

Published June 2, 2017|5 min read

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Ridesharing companies like Uber and Lyft created an entire industry seemingly overnight. Now almost anyone with a car and a smartphone can be on the clock, taking passengers across cities and making money just like a taxi service.Of course these companies, particularly in the case of Uber, have also faced a storm of criticism. Whether because of rogue CEOs, psychological mind games they play with drivers, or the fact that the insurance provided often falls short, it’s an uphill PR battle.One of the controversies that gets less attention, though, is what happens when this industry disappears just as quickly as it was created.Self-driving vehicles threaten to do just that. In the span of a few years, it’s plausible that tens of thousands of Uber will be replaced by autonomous vehicles. Uber and Google, along with big car companies like Ford, are doing their best to make self-driving cars less science fiction and more science fact. In fact, in places like Arizona and Pennsylvania, autonomous test drives are already taking place. But what happens to all of the human drivers when automation soaks up all the gigs in the gig-driving economy?One of the more optimistic points of view is that wholesale replacement of drivers with their own cars will never take place. Despite huge gains in self-driving technology, there’s one thing holding back widespread acceptance: humans.A lot of this comes from Uber drivers themselves, and it would be reasonable to call them willingly naive. After all, who wants to come to terms that they’ll soon be obsolete? In an article from Time, several Uber drivers voiced their belief that they simply can’t be replaced."There are a lot of people out there who wouldn't trust a self-driving car," says one driver. Another driver says that she sees herself as more than just a driver; she’s part nanny, part therapist. Anyone who’s tried to tell their problems to Siri or Alexa knows they can be a little cold.A third driver notes that "there are a lot of idiosyncrasies that can't account for." This point may be most salient, and it’s one shared by many experts. Missy Cummings, Director of Duke University's Humans and Autonomy Lab, agrees that "driverless cars are very rule-based, and they don't understand social graces." Do you wave someone on at a crosswalk? Let a driver make a left-hand turn in front of you? Know how to adjust for changes due to roadwork? Deal with someone cutting you off? Put more bluntly, a member of Toyota’s autonomous car unit says that "it's hard to program in human stupidity or someone who really tries to game the technology."So the potential outcome if it proves impossible to program driving etiquette into autonomous cars is that replacing human drivers simply doesn’t happen. Self-driving technology might be implemented in vehicles that don’t need to be aware of as many social graces, such as in mining, construction, farming, or warehouses. Another reason it may not see widespread commercial use is cost.At first blush, cost might not seem prohibitive. After all, autonomous cars surely don’t require the type of support you’d have to give human drivers, right? But you have to understand how Uber and Lyft treat their drivers right now. They’re hired on a contract basis, which means Uber provides low wages and doesn’t offer benefits that a salaried worker usually gets. Outside of minimal coverage, drivers have to buy their own car insurance and personal injury insurance. Drivers also use their own vehicles and are responsible for upkeep and maintenance.If Uber and Lyft replace their drivers with self-driving cars, it’s not clear they’d save enough money to offset new, higher costs.Drivers currently use their own cars, but the self-driving fleet would be wholly Uber’s. Buying tens of thousands of cars is no small feat, even for a company with as much money as Uber, especially when you consider that these aren’t your standard cars but vehicles full of sophisticated self-driving technology. Then you have maintaining those cars, and associated costs like DMV fees.Put this way, the low salary paid to Uber and Lyft drivers seems even more criminal; the companies are using drivers as a maintenance crew as well, and without drivers the cost of capital skyrockets. A partner in a venture capital firm with investments in autonomous vehicle development says he expects "grocery store margins" for companies who take on their own fleets.So that’s a second scenario in which self-driving cars don't replace drivers. But are either of them likely? Probably not. Lyft’s president John Zimmer predicts that most of its riders will be via self-driving cars by 2021. He even takes it a step further, saying that personal car ownership will be dead by 2025. This is bolstered by the development that Lyft has partnered with Google sister company Waymo to implement self-driving technology.And speaking of that partnership, it was spurred on by the heated legal battle between Uber and Waymo over whether an Uber employee stole critical technology from his former employment at Waymo. Uber CEO Travis Kalanick has stressed that self-driving cars are the company’s future.These aren’t the actions of companies who don’t see a path forward for self-driving cars. No matter how many Uber drivers think they’re irreplaceable to passengers, and no matter how slim the margins, the future is looking more and more autonomous. The most prudent course of action would be to start making plans now for a different career path.Many Uber drivers use the service to supplement their income. There are a number of "gig economy" services out there, from TaskRabbit to Handy, that are equally as useful for additional income. Drivers should also use personal finance best practices, like setting budgets and getting an emergency fund in place, for the seemingly-inevitable point when they’re no longer needed.In the end, this isn’t a problem that’s facing only Uber and Lyft drivers. Automation is an economic and social issue that many Americans will have to come to terms with. There’s no silver bullet solution out there for it, but as politicians and others attempt to tackle the problem, it’s important that rideshare drivers aren’t left behind.Image: Grendelkhan

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