Rewind to October 13, 1994, Netscape released its first browser for sale and began making the internet mainstream. Fast forward to 1995 and Microsoft released Internet Explorer bundled with Windows 95 for free and won the first browser war.
Netscape popularized the web but couldn’t compete when Microsoft made it free
Cars spend an estimated 96% of their time underutilized. In March 2009 Uber started popularizing ride sharing, come December 2015 Uber announced having completed 1,000,000,000 rides, in July 2016 2,000,000,000 rides. This rapid growth has been fueled by making transportation cheaper and increasing utilization, subsidized with $11.56B in Venture Capital.
Lyft Line and Uber Pool both fed into the virtuous cycle by making the price of getting around San Francisco similar to catching public transport. While UberEats and UberRush have further increased utilization of the network.
“It starts with understanding that the world is going to go self-driving and autonomous. So if that’s happening, what would happen if we weren’t a part of that future? If we weren’t part of the autonomy thing? Then the future passes us by basically, in a very expeditious and efficient way.” — Uber CEO Travis Kalanick
Uber poached 40 robotics researchers from Carnegie Mellon to build out its self driving team. Self driving cars have lots of technical challenges but transportation is a massive market ripe for disruption.
10.9M US workers are involved in transportation roles, which account for 7.8% of US jobs.
$403B/year in transportation salaries is a good reason for Intel to spend $15B acquiring mobileye to get in the self driving game. 44 companies are working on self driving technology.
Fleets of self driving cars will feed the ride sharing virtuous cycle, achieving higher levels of utilization.
The big risk to Uber is someone beating them to market with self driving cars, Uber’s stickiness is proportional to their network availability and price. The drivers I met while riding in the US only drove Uber if Lyft was quiet.
The Waymo (Google) and Lyft partnership could be the Internet Explorer to Uber’s Netscape if they are first to offer self driving rides at a price and availability that Uber can’t compete with. Imagine if your first three months riding in Lyft’s Waymo cars was free.
Data is king for building a self driving system.
- Video Dash Cam Leader Lytx was acquired for $500M, the video data makes for an excellent training set.
- Telsa has 1.3 billion miles of driving data from autopilot data
- Waymo has logged 3M miles self driven.
- Uber only gets the app data back from its network of drivers
Uber popularized transportation as a service but wont be competitive if someone else makes self driving cars first
Uber was not among the 11 companies that lodged Autonomous Vehicle Disengagement Reports for 2016 with the State of California’s Department of Motor Vehicles.
As transportation costs go towards zero, fleets of self driving cars will become the infrastructure that new business models are built on.
Netscape provided the platform for Amazon, Google, and Facebook, self driving cars open up a whole new platform
Creating opportunities like
- Automated mobile food preparation, so your pizza is delivered just as it finishes cooking, Zume Pizza received a patent for this.
- Logistic networks that rivals Amazon Prime and Google Shopping available on demand to small businesses.
- Mobile warehouses where products start shipping based on demographic and location data before you even visit the site.
- Mobile offices for working commutes, resulting in people having larger houses living further from city centers.
- Home showrooms for the “do it for me generation”, one of the challenges of businesses like TrunkClub and Bombfell is that while the delivery is convenient, sending the unwanted items back is a hassle. What would that lamp look like in my lounge room? No need to use your imagination anymore.
- Access to items by the minute, that would otherwise have low utilization if you had to own them.
- Fresh food box delivery, imagine if the food in your Freshly, Blue Apron, Plated, HelloFresh, Peach Dish, etc box was just picked before it was packaged and sent to you in the refrigerated vehicle.
- Reducing welfare payments by having the government provide on demand necessities.
- Most importantly UberPuppies all year round.
Driving in rain or snow is still hard, but it’s just a matter of time.
Transportation is the first area we will see robots outside of the factory.
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Some other things I have written:
I woke up to find one of my exchanges (BTC-e) frozen.medium.com