Both Lyft and Uber view autonomy as a critical component of their future. Lyft lists the inability to develop autonomous vehicles in their top ten risk factors, and Uber has long classified autonomy as “existential.” The current consensus is that once autonomy is “solved,” Lyft and Uber will gradually replace their human drivers with never-tiring robots.
While autonomy could make Lyft and Uber’s businesses more profitable, it also decreases the value of their two-sided network effects by making drivers less important over time. It will also increase competition given the killer use case for many of the biggest full autonomy projects is to operate a fleet of autonomous taxis. Given the competition in the autonomy field, the quality of autonomous navigation may create a short-term non-commodity offering for the early winner, although we suspect multiple platforms will achieve full autonomy in time and negate that factor.
Lyft and Uber may have a near term advantage over autonomous only offerings. If an autonomous fleet can go some places but not everywhere, consumers are unlikely to download a new app and use it when only it’s available instead of Lyft or Uber who can leverage their human driver networks. Since transportation is a commodity, unless a fully autonomous service has similar wait times, coverage, and prices to conventional ridesharing, it is unlikely to be successful on its own.