Data is King
In the early days, people though Uber and Lyft were crazy to think people would ride in each other’s personal vehicles. In NYC the number of FHV’s rose dramatically since 2013. Uber and Lyft need massive supply of vehicles and driver to provide on demand service. The increase in the supply lead to an increase in demand which led to a need for more supply of vehicles. The 8.6 Million residents and over 60 million visitors are always seeking to go from point A to point B. All these vehicles are being driven primarily in the 22 square smiles of Manhattan (302 square smiles of all 5 boroughs). Manhattan has a famous grid system that dates back to 1811. What was known to be the Commissioners’ Plan of 1811, which planned Manhattan’s famous grid system, was completed at the end of the 19th century and produced 11 major avenues and 155 cross-town streets still used today. The grid begins north of Houston Street, since the area to its south was well established when the grid came to be in 1811. Broadway, one of Manhattan’s oldest thoroughfares (and the world’s longest) runs perpendicularly as it progresses north from the tip of Manhattan up into the Bronx. As it crisscrosses the straight avenues, it creates large, open intersections (Union Square, Madison Square, Herald Square, Times Square, Columbus Circle, etc.).
Lyft and Uber seem to have a mission of improving people’s lives with the world’s best transportation. But this is more than just about technology or moving into adjacent categories like bikes and scooters. Lyft and Uber seem to see ride-hailing as a way to upend the negative aspects of automobiles. Keep in mind that they are the second highest household expense and a typical car is used only about 5% of the time. Despite all the success, Lyft and Uber are still in the early phases of its market opportunity, as rideshare networks account for roughly 1% of the miles traveled in the US. But to truly achieve the vision of transforming the transportation industry, the company will need to be aggressive with AI (Artificial Intelligence).
By embedding machine learning into its technology stack, Lyft and Uber have the advantage of data on over one billion rides and more than ten billion miles – which allows for training of models to improve the experience, such as by reducing arrival times and maximizing the available number of riders and creating sophisticated pricing models. But when it comes to AI, the holy grail is autonomous driving. Part One is creating the network. The nature of the Manhattan grid and the rise of Uber and Lyft created the network. The path to Autonomous vehicles is largely tied to the continued success of Uber and Lyft. This is because Autonomous vehicles will likely be most effective when managed through sophisticated routing systems which ridesharing networks have. As such, they can manage the network. Part three is autonomous vehicles. Most accident are caused by human error. Take the human partially out and then fully out of the equation and you are left with less and less accidents. The level 5 autonomous vehicle is supposed to be in operation within the next 10 years. Even if you push the timeline out further, the reality is that with partially autonomous vehicles there will be less accidents.
A company must have resources and scale to effectively pursue to collection of data and AI. Data is the “cash cow” of the digital age. Like gold and oil in decades past, there is a rush to accumulate as much data about consumers as quickly as possible. Companies like Facebook and Google are acquiring and making a fortune off the sale of said data. The current environment surrounding data acquisition and the proliferation of sensory technology in our vehicles is astounding. The increased presence of sensors and cameras within modern cars yield greater ability to monitor performance and surroundings. Today’s vehicles can identify which part of the car’s interior needs maintenance or if there are obstacles around us as we drive. These sensors generate data that is analyzed in the hopes of creating self-driving vehicles. Self-driving cars would generate immense amounts of data (1 gigabyte per second). The possibilities created by these acquisitions are equally immense. Vehicles will potentially be able to relay the location of specific landmarks like parking spaces in a crowded lot, for instance. While the ability to locate a parking space from a single application on your phone is beneficial, it is only one positive change self-driving vehicles could bring about.
So how does that affect the workforce. First, self-driving vehicles would remove driver necessity in the transport industry. Taxis, cargo trucks, etc. would find their once human-operated vehicles controlled by a computer receiving incredible amounts of data as it travels. There would not be payroll discrepancies about overtime wages. Gone would be the days of driver error resulting in accidents (which result in $242 billion a year in the United States). Like the invention of the mechanized assembly line, the widespread implementation of self-driving vehicles would make the use of anything else obsolete.
The presence of affordable autonomous travel would exponentially expand the travel market. Transportation companies would be able to enter and reach people in the developing world who are unable to afford vehicles of their own or transport services operated by human drivers. The presence of vehicles always connected to the internet opens up the avenue for location and time-based advertisements. Companies could not only generate revenue from the use of vehicles and the sale of vehicle data, but also from advertisers trying to reach constituents in a particular region.
Self-driving vehicles can potentially streamline the route optimization and dispatching processes of your fleet – new orders will no longer have to be communicated from headquarters, as the car nearest a request would immediately get the request. Traffic congesting routes would be circumvented as the car receives data on the various paths towards its destination. The advent of the self-driving vehicle will be disruptive to various industries. Companies will have to adjust their processes, but the benefits should outweigh the costs. On the ever-growing hill to cutting-edge technology, there is one item to always keep in mind: Data is King.