They are a stopgap in a similar way McDonald's employees are stopgaps until full automation. It's a long way out; and, even if it is closer than expected, that type of employee hasn't exactly invested a lot of their life into training for the job so it's not like they are getting screwed.

I suspect Uber will actually beat McDonald's to automation. I tried to find any evidence that McDonald's in trying to automate their restaurants, and all I could find was a joke news article.

McDonalds definitely invests in automation, but the goal isn't to replace humans entirely. Uber also has much higher marginal labor costs than McDonalds does and would benefit a lot more from automation.

Examples of automation at McDonalds:

Self serve order kiosks http://www.businessinsider.com/what-self-serve-kiosks-at-mcd...

Automated beverage dispensers https://www.youtube.com/watch?v=k26g3YqAsfA

Digital menu boards that update based on conditions http://www.eater.com/2015/11/11/9716058/mcdonalds-weather-me...

And then of course all the tech in their kitchen that take out all the guesswork (timed friers and the like).

One thing they do now is put the drive-in order-taker off-site at a call center.

I guess not so recent, considering this article is from 2006: http://www.nytimes.com/2006/04/11/technology/11fast.html?pag...

This could be something worth fully automating -- they have a limited number of options on the menu, and a less-limited but still defined number of permutations on those options. That problem space may be small enough for converting text-to-speech. The downside is that you'd still have to have someone on-call to try to rework any order statements the system has a low reliability score on.

I don't understand why they don't have an app yet for ordering (at the drive-in and maybe delivery too).

The combination of app-based ordering and drive-through delivery is one I strongly believe to be underutilized.

Uber gets to use a massive amount of physical assets without any investment in those assets. I imagine their future with automation is the same. No way they want to buy their own fleets of cars, they will just let you lend them your car when you don't use it.

Maybe (surely) there will be a squeeze on fees, but automation should move the income from active to semi passive for car owners.

Looking at mcdonnalds doing automation is just one avenue restaurant automation will happen.It's just as likely that some other company/startup will lead, for example momentum machines' burger robot(assuming not vaporware) or eatsa's restaurant model.

They already have machines that take your order through a touchscreen in some McDonalds... that's half the jobs gone in one swoop!

Uber drivers are investing, though - they are taking out loans to acquire cars appropriate to Uber's needs, and then paying to maintain that car. They're more like McDonalds franchise operators than McDonalds employees.

Then they just sell their car if they don't work for Uber anymore. It's not like cars will suddenly become worthless.

They might drop in value a lot when driverless technology goes mainstream. If the supply of sedans is the same but the demand is way less because driverless cars don't need to be wasted sitting parked 90%+ of their existence, that could make used cars way cheaper for a while.

Uber drivers are likely to accrue higher than normal mileage on those vehicles, which would lead to faster depreciation.

Loan payoff is usually gradual, so I'd imagine most of them from day 1 are underwater as far as what they owe and what the car would sell for on an open market.

Market similarly discounts used taxicabs, used police vehicles and anything that's re-sold by car rental places - such vehicles have higher mileage and are more likely to have been abused.

Hmm, that's an interesting thought. How to evaluate it?

It depends on (1) how long from now you estimate cab driving may be obsolete, (2) how long the useful life of your car for cab purposes is, and (3) how driverless technology will change what the resale value of the car at its end of for-hire life otherwise would have been.

Uber requires fairly newish cars (not sure how reliable this link is, but according to http://www.idrivewithuber.com/uber-car-requirements/ it varies by type and area quite a bit from around 5 to 15 years) so if the car's useful life will only be 5 years (such as in NYC) and you estimate there's still around that much time or more left before drivers can be replaced, then it doesn't really matter. On the other hand, if your car's useful life is more like 15 years, you could be stuck with a useless asset. Maybe a driver/owner can also titrate the risk here by buying an already older car?

The other question is how widespread driverless technology would affect the resale value of these cars. Can a driver/owner just sell their car when they lose their job? On the one hand, for privately owned passenger cars, it's hard to imagine the resale value not being reduced, when car utilization rates can increase dramatically (right now a privately owned passenger car spends almost all its time parked, doing nothing useful for anyone).

On the other hand, for-hire vehicles (well, medallion cabs in NYC anyway, not sure how this compares elsewhere) already have utilization rates close to 100% (they're constantly being rented out to different drivers and are only off the streets when they're being maintained), so IF driverless technology is cheap to retrofit to these older cars, they should hold their value. ...And on the other other hand, right now once a for-hire vehicle can't be used as a cab, at least it can be resold as a private passenger vehicle. If private passenger vehicles are much cheaper because the demand is much lower due to much higher utilization, that stops being a good option. In that case, all you can really do is get as cheap a car as you can now, because it's going to have very little resale value after driverless technology hits.

Finally, a driver can rent a car. There are businesses specifically to do this. The risk is then shifted to the rental business (though presumably they charge appropriately for that). Yellow medallion cabs in NYC are almost all done this way, not sure what percentage of ubers are rented versus owned-by-the-driver.

Anyway, maybe the bigger risk is not the investment in the car, but the investment of time. If you are spending your whole workday driving for several years, you are getting very good at driving, and not getting good at any skill that will have market value after driving is automated. And even if there are any marketable skills that are related to driving (eg, let's pretend that driverless technology can't do CDL driving at first, or that a good cabbie can pick up airplane piloting quicker than average -- just silly examples), all the other displaced cab drivers will be chasing the same options. I think the more expensive asset at risk is the driver's skill and time than the car.

Automation is not always the most convenient thing. Think about self-checkout or pumping your own gas at a gas station. Wouldn't it be better for the customer to have someone do the drudgery for them? Even in the context of websites, some companies have generic FAQ instead of a real customer support team, which is not a good experience.

>Think about self-checkout

Self-checkout can be extremely convenient if it's done with a handheld scanner as you shop, as my local supermarket does. I can walk into the store with my backpack, fill it with groceries, see how much I'm spending (and whether discounts have processed properly) and then pay in a few seconds at the exit. The only minor hassle is if I'm buying alcohol I have to wait for someone to verify my age. And if I spend less than £20, I can even use contactless payment. Unfortunately the current system still requires a few steps to pay, but theoretically I could just beep my card and walk out.

>or pumping your own gas at a gas station.

Because they haven't really automated anything but the payment. If you could drive up and have a robot arm fill your car, it would be very convenient.

I'd much rather scan my own groceries and pump my own gas instead of waiting for someone else to do it.

I'm much more invested in how long it takes these things to be done than an hourly wage earner.

Do you also want to go to the kitchen and start bringing your own food and drinks? Getting up a few times, going there and asking if it's done. Imagine if you have dozens of people/kids running around getting food, maybe spilling it on the floor in the process, bothering people in the kitchen etc. Are you better at scanning items and handling errors than someone who's been doing it for years? The same applies to waiters, cooks etc.

Uber was not a leader in SDCs, at least before acquiring CMUs robolab, and Uber doesnt actually own any fleet whatsoever. So I don't understand the common narrative that uber will own transportation with an SDC fleet. What I see is a company that excels at market expansion and contractor growth, pre-announcing a major pivot years in advance.

It is equally or more likely, given the history of innovation, that a brand new company will win that space instead.

Travis, the CEO of Uber has already told Elon Musk he'll purchase $500 million in self driving teslas' if available by 2020. Of course that's not anything real, it'll be interesting to see if Uber moves into owning a fleet of SDC's or jsut remaining as the middle man. If they only remain middleman, their market position could easily be at risk by the companies who own the fleets. Uber would become a 'sharecropper'.

A more likely approach would be shared vehicles owned by groups of individuals/communities. A community neighborhood could own say 10 SDCs, which would have a scheduling platform and such that would effectively remove Uber from the equation altogether. I see individual car ownership dropping significantly and moving towards 'pay as you use' type service, where the car is just summoned to you. The owner, whether it's a company or group of individuals, would own the market there.

By that thought, the only way I see Uber lasting long, long-term is by offering a "fleet as a service" type deal, where any city/community/group could purchase it and split payments by usage.

Automated cars still require drivers, though. Yeah, sober people could take an automated uber, but drunk people (a lot of people taking ubers) would still need a driver.

What? As designed and when they arrive they do not need drivers. When these cars arrive the allure of completely passive ridership will be so strong that no regulation will stand in the way.

The only cars I've seen so far that even try to be driverless are the ones in Mountain View that max out at ~30mph and look like golf carts.

The rest all require a human driver that can take over in case the robot encounters something it can't handle.

I'm not entirely sure you realize that no one wanted to grow up to be an Uber driver. Driving for Uber is a stopgap until guaranteed minimum income is a reality.

A bit like Netflix and DVD's.

Self-driving cars are not driving themselves, they are driven by algorithms. The problem is that cars then become prisons on wheels. Think about it - since you pay with a debit/credit card, your identity is known when you enter a car. You can then be driven directly to a police station and you can't escape, because the whole thing is controlled by centralized machines. Just look at what's happening to these people in China who are mysteriously disappearing. Vehicles driven by algorithms are the best tool for eliminating protesters, political enemies etc.

Um, not unless corporations become deputized. Uber and Google do not want to be sued for false arrest and false imprisonment.

I'm saying government will do it with the help of Uber. Just like they spy on people with the help of FB, Google etc. It's already happening with data.

Imagine you have those cars in China. Government just orders some company to spy on its users and then when certain people enters those cars, they will be steered towards some location where they can be arrested/tortured/killed, because they are enemies of the state. They can't get out of the car, because the locks are also controlled by algorithms. Who knows, maybe they can release some poisonous gas while the person is inside of a car.

Many possibilities are there. Governments are getting much more powerful, while the average homo sapiens is the same like when there was no government.