Autonomous ride services (ARS) have already been discussed a little earlier in this book, and this probably raised many questions that will be answered here. ARS is perhaps the most significant change that will be brought about by autonomous vehicles. It will be the first significant opportunity, and it may be the largest.
What are autonomous ride services (ARS)?
ARS are essentially Uber without a driver. Passengers will get rides to their destinations in autonomous vehicles without a driver.
Why is it so important?
ARS will significantly reduce the cost of transportation and increase convenience to the level where fewer people will own their cars. It will change the way people use transportation, creating enormous new markets in the process.
Is ARS referred to by other names?
Yes, it could also be called mobility as a service, on-demand rides, robo-taxi, personal mobility, and several others. It's typical that a new category of product or service is referred to by different names until it gets more established.
Are robots driving robo-taxis?
No, that’s stupid. The autonomous features are in the vehicle itself.
How will ARS work?
Just like ridesharing, passengers will use an app to request a ride to their destination. If that is an approved destination and a viable route for the ARS autonomous vehicle, then the AV will be dispatched. The ARS vehicle will arrive and identified through signage on the vehicle to the passengers who will get in, and then they will indicate to the vehicle that they are ready to start the trip. When they arrive at the destination, the vehicle will announce that it has reached its destination, and the passengers will exit the vehicle. Passengers will be charged for the ride as they are for ridesharing.
Will ARS passengers have someone to communicate with if there is a problem?
Yes. Most likely there will be some form of remote communications with the dispatch center, if there are any problems or questions.
What is the difference between autonomous ride services and ridesharing?
Ridesharing arranges one-time rides from contract drivers who own their vehicles on short notice through an app. Uber and Lyft are the best examples in the United States. Autonomous ride services (ARS) also provide rides on short notice (or prearranged), but the trips use an autonomous vehicle from a company-owned fleet.
Will ARS be expensive?
No, because there are no drivers, the cost will be low.
Why will ARS be better than ridesharing?
ARS will be much cheaper, more convenient, and more comfortable.
What will be the cost of ARS compared to ridesharing?
An average UberX trip (although this varies a lot) is approximately 6.4 miles, taking 14 minutes with a fare of $14.00-$15.00, probably about $17.00 with a tip. Uber Select is nearly twice as expensive. Experts estimate that per mile, UberX costs about $2.50 - $2.75.
The pricing for ARS remains to be determined, but it will be much less because it eliminates the cost of a driver. I estimate that a typical price will be about $1.00 - $1.25 per mile, about half the cost of ridesharing.
How will ARS rides be priced?
There will be a variety of pricing plans like subscriptions, prearranged rides, off-peak, etc.
How is ARS more convenient than ridesharing?
Ridesharing relies on the availability of contractor drivers, causing delays during surge times and making it challenging to prearrange rides. ARS will use a fleet of AVs that will always be available.
How is ARS more comfortable?
First generation ARS will generally use modified high-end vehicles which will be more like Uber Select at a quarter of the price. Second generation ARS vehicles will be even better because they will be custom-designed for passenger convenience without the need for a driver’s seat or steering wheel.
Why will there be two generations of ARS vehicles?
It takes many years to design and set up manufacturing for any new vehicle, so initially most ARS companies will retrofit existing vehicles already being manufactured in volume. Once they establish the new services, they will replace the retrofitted vehicles with ones that are custom-designed for passengers, without a steering wheel or driver controls.
What will be the interior design of second-generation ARS vehicles?
Inside they will look more like living rooms. Most will have seats enabling four people to face each other with a table in the middle, or individual tables for each passenger. Unlike most ridesharing cars that can only seat three comfortably, they will easily accommodate four people.
Will ARS vehicles come in different sizes?
Yes, there will be larger ones that will accommodate more than four people and smaller ones designed for an individual passenger.
Won’t ARS vehicles get dirty inside if people leave trash or get sick?
Probably. The ARS companies will bring the vehicles back to the fleet operations center for cleaning. Passengers may be charged cleaning fees if they leave a mess. It’s still unclear how the ARS operations center will know whether a vehicle is sufficiently clean to dispatch it to other passengers. They may use internal cameras to inspect it.
So, why will ARS be the first use of AVs?
There are many reasons that AVs will be introduced first as ARS. Here are some of the more important ones:
ARS only requires sufficiently autonomous vehicles. They just need to be able to take passengers from one approved location to another along a pre-defined route. If a passenger requests a destination that is not yet supported, the ride will be denied. The number of destinations and routes will be limited at first, but they will increase rapidly over time.
People will more readily try ARS than they will purchase an AV. Individually owned AVs will be expensive and quickly become obsolete by new technology, so most people will be reluctant to buy one for a while. However, there will be few barriers to trying ARS.
ARS is going to be introduced by municipality. A fleet of ARS AVs will provide the services in a municipal area, such as a city, town, or county. It will provide rides only in that area. This enables ARS companies to work with municipal governments to get approvals to provide services without needing approvals from other municipalities.
For these reasons, companies developing autonomous capabilities have already identified ARS as their first market. Technology companies, like Waymo, do not want to manufacture, distribute, sell, and service cars at retail. ARS is the real strategy for ridesharing companies like Uber and Lyft. Even auto manufacturers, like GM and Ford, have stated that ARS will be their first market for AVs.
You mentioned that ARS would be fleet-based. What does that mean?
An ARS company will provide a fleet of AVs within a municipal area. These fleets will range in size from several hundred to several thousand eventually. Each fleet will have a base of operations, although some of the vehicles may be temporarily parked in distributed locations to provide immediate service. A fleet operations center will manage and maintain that fleet.
Fleet maintenance includes cleaning, refueling, maintaining, and updating all AVs. It will also include local management such as emergency services for its vehicles, passenger communications, as well as route management to adjust for traffic, accidents, and construction. Local fleet operations management will have the responsibility to work with local authorities and emergency services.
When will ARS become available?
Waymo provided the first ARS services to a 100-square-mile area in Chandler Arizona at the end of 2018. Then it will expand its service area there and will roll out its services to additional municipalities. Other companies will begin testing ARS in the later part of 2019. By 2021, ARS will start to expand into many municipal areas.
Will the expansion of ARS be slow or fast?
This initial entry of ARS will be careful and deliberate to establish confidence in the service. After it creates sufficient trust, the ARS company will expand very quickly because many companies will compete to enter new municipal areas first to shut out others from entering those markets.
How large of a market will ARS become?
It will be an enormous market. I estimate that in the U.S. alone that it will be a $150 billion market by 2025 and more than $750 billion by 2030. This makes it one of the largest markets in the U.S. The global market could be twice as large.
Does ARS require a substantial investment?
Yes, ARS is very capital intensive. It is a technology and capital-intensive business model replacing a labor-intensive business model (ridesharing). A fleet of ARS vehicles will be costly. A 1,000-vehicle fleet will cost about $100 million. By 2025 there will be 1 million ARS vehicles, or more, in the U.S. and the total capital investment will be over $100 billion. By 2030, the total capital investment in ARS could exceed $500 billion in the U.S.
How will ARS companies afford these investments?
The expected competitors in this market are already positioning themselves to have access to the capital necessary to compete. Uber and Lyft are planning IPOs in 2019. GM and Ford have created ARS subsidiaries, and they are getting outside investors for additional capital. Waymo (Google) and Apple already have vast capital reserves to use.
What will happen to ridesharing companies like Uber?
Once ARS gets sufficiently established in a metropolitan area, it will quickly displace ridesharing because ARS will be much cheaper and more convenient.
What will happen to all the Uber drivers?
Good question. ARS will gradually replace most of them.