Autonomous vehicles are already in production and big city taxi drivers could be out of a job in 10 years, including those for Uber and Lyft.
It may take 5, 10, or in some cases 20 years, but the taxi driver’s job is destined to disappear. By 2025 most major cities in Europe, Asia and North America will be served by autonomous vehicles that will take the traditional role of taxis.
Autonomous ride-sharing and ride-hailing services are the future for Uber and Lyft, too. Both companies are actively investing millions of dollars, through partnerships with technology companies, car manufacturers, and academic institutions, to develop and launch driverless taxi services in five years. Trials and pilot programs –with human drivers as a backup– are already underway. The arrival of driverless vehicles is the end game for the ride-sharing companies, as they will no longer need to deal with the burden of having to pay drivers, nor face strikes and protests over fares and terms of employment.
While autonomous buses could be an interesting solution for cities, the same way that driverless metro trains are already operating in many places and becoming the new standard, I believe the real creative disruption of mobility will come in the form of driverless taxis and car sharing services.
In that scenario, what will be the role of traditional taxi companies, and independent drivers, in a driverless future? If they don’t embrace the autonomous car revolution they could be out of business in less than 10 years.
Independent taxi drivers and taxi companies are already feeling the pain of the mobility changes. Ride-share giants Uber and Lyft have challenged their business everywhere, and they are winning. In many cities, despite the efforts of the industry and transportation officials to stop or delay their arrival, Uber and others have been successful finding a way to offer ride-share services. Prices for traditional taxi licenses, such as the New York city Medallions, continue to fall as competition from alternative services escalates, making the licensed taxi business less profitable.
That’s why traditional taxi companies need to join the race to launch driverless services. Even taxi drivers’ cooperatives should seriously look into it. In the end, it is about cost savings and convenience. Wouldn’t it be ideal for taxi drivers to take another job, or stay home and spend more time with their families, while their licensed driverless taxi works for them? And driverless cars, ideally electric, don’t need to rest. They can work 24/7 and only need basic maintenance, plus a electric socket to charge.
The new jobs in the taxi industry will be related to managing the fleets, promoting their services and engaging customers. Everything else will be fully automated, such as hailing the service, collect fares, and scheduling maintenance.
The idea of launching an autonomous taxi service has been around for several years, and now the technology and the infrastructure to support it are becoming available. Some companies have been developing solutions in “stealth” mode and are close to coming onto the market.
Zoox, a “stealth” startup developing a driverless solution for taxi services, recently received $20 million from Hong Kong-based AID Partners Capital Holdings Ltd, for just 1.9% of the company. In an SEC filing on June 6, the startup said that it had raised over $100 million in equity. If additional investments came at that price per share, it puts the valuation of the company, with just 140 employees and no product to show, at over $1 billion. In March 2016, Zoox received its permit to begin testing its self-driving car in California.
Car manufacturers are joining the race. Ford recently announced it will have a fully autonomous driverless car ready in five years, and will initially target ride-hailing, ride-sharing fleets, and delivery services with the yet-to-be-named new model. GM is doing the same with the autonomous Chevrolet Bolt it is building for Lyft. Tesla CEO Elon Musk also discussed shared fleets of autonomous cars when he disclosed the company’s second master plan last month.
It does make sense! Who’s going to purchase an autonomous car for personal use? If you have around $50,000 (plus taxes) to spare and want to show off around the city while enjoying a nap in the backseat, it could be your solution. But for the rest of us, it would be a waste of money when there’s a fleet of self-driving taxis at our disposal that we can hail any time and even reserve for the daily commute.
So, if you’re mulling the idea of becoming a licensed taxi driver, forget it! Unless you live in a developing country or a rural area where the next generation of connected car technologies could take another decade, it will be a short career. And if you plan to offer Uber rides to supplement your income, don’t plan on it being long term.
Finally, if you are already a licensed taxi driver, start inquiring about selling your license (where allowed) and looking for another job. Your current one is operating on borrowed time.