Self-Driving Cars Could Erase the Edge That Drove Uber To Success

Uber Technologies’ growth story stands out as one of the wildest in startup history: Beginning with only three cars in 2009, the company matured rapidly into the big fish of the ride-hailing pond, with $6.5 billion in revenue in 2016 and a valuation of about $70 billion. Former CEO Travis Kalanick drove that expansion by understanding and harnessing the power of the “network effect” — the self-reinforcing advantage of having the most drivers and the most users. By rapidly accelerating Uber’s development around the globe — even offering bonuses to drivers in places where there weren’t enough users yet to support the market — the company ensured that within a few years, riders could catch an Uber in places from San Francisco to Chennai, India, in minutes. Now, the rise of autonomous driving — and the potential arrival of fleets of self-driving vehicles in 2021 — threatens to wipe out the value of Uber’s driver network. That would destroy the company’s business model, forcing it to start over from square one. “They have an urgency, a strategic urgency to create their own operating system,” Stanford University economist Tony Seba said. “The number of drivers doesn’t matter anymore.” Broadly put, automated driving refers to the use…

Link to Full Article: Self-Driving Cars Could Erase the Edge That Drove Uber To Success

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