Google just made a splash by announcing that in partnership with the popular driving app, Waze, it would launch into the transportation business with a ride-sharing service in San Francisco.
This new service would be more of a carpool system rather than a traditional ride-hailing service, where riders can use Waze to find those in their area going in their direction for a ride. It’s commuter slogging on an app.
Unlike other ridesharing services, a contracted driver is not needed so it’s planning to compete on price by charging riders up to $0.54 a mile. Also, there won’t be a screening process that has been a point of contention for critics of ridesharing and policymakers. Waze will use user feedback to flag bad drivers.
Right now, the biggest players in the ridesharing industry are Uber and Lyft. Uber and Google started out as frenemies with Google investing more than $250 million in Uber just a few years ago.
That on-again-off-again relationship has turned into the cold war. Instead of an arms race, both are in a race to introduce driverless cars. Google started its project to develop driverless cars in 2009 and has amassed a fleet of more 1.8 million autonomous driving test vehicles. Meanwhile, Uber has plans to start testing robotic taxis in Pittsburgh in the next few weeks – beating Google to the market.
The big question is not really whether drivers for Uber, Lyft or other current ridesharing services will abandon them for Google’s new service, as one driver explains:
Robert Rickett, a 29-year-old nonprofit worker in Sacramento, Calif., said he uses Waze for navigation daily, particularly while driving for Lyft in the evenings. But he said he wouldn’t abandon Lyft for a Waze ride-hailing service, unless it offered him better opportunities as a driver.
Still, he noted Waze’s positive reputation among drivers is a big advantage—though he admitted he didn’t know Google owned the service.
“They have a lot of people who trust Waze,” he said while driving two Lyft passengers across the Bay Bridge into Oakland, Calif. “If they can capitalize on that, they could pull some market share.”
The big question is what driverless cars mean for the ridesharing industry and those who have found financial opportunities as drivers. Reading Medium the predictions are for an ominous future:
We are facing the decimation of entire small town economies, a disruption the likes of which we haven’t seen since the construction of the interstate highway system itself bypassed entire towns.
The New York Times calls this a clash between robots and jobs with jobs losing:
There is a big downside, though. Heavy trucking employs nearly two million people across the United States, with a median salary of over $40,000, according to the Bureau of Labor Statistics. That is about double what hundreds of thousands of others employed as taxi and limousine drivers make. Both industries are now firmly in Uber’s cross hairs.
The jobs might not disappear completely, of course. Moreover, shifting from today’s limited autonomy features like automatic braking and lane correction to truly self-driving vehicles across the country is a huge technology challenge that could take years and draw serious political resistance. Even in a fully autonomous world, freight haulers and livery services would still need mechanics and tech specialists to keep fleets rolling.
Still, the threat is clear. And America’s threadbare social safety net and worker-retraining programs may struggle to support a mass retooling of skills. That would heap further pressure on working-class communities already reeling from the loss of more than five million manufacturing jobs over the last two decades.
On the contrary, Uber’s CEO has tried to quell fears by explaining that drivers will always be needed, but not as many:
"If you're talking about a city like San Francisco or the Bay Area generally, we have, like, 30,000 active drivers. We are going to go from 30,000 to, let's say, hypothetically, a million cars, right? But when you go to a million cars, you're still going to need a human-driven parallel, or hybrid. And the reason why is because there are just places that autonomous cars are just not going to be able to go or conditions they're not going to be able to handle…
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Further, Kalanick argues, the rise of autonomous cars will open new jobs like maintaining the car fleets, jobs that don't exist today because there has never been a need…
"You know, there was once a time you made a phone call and there was a person that, the operator, had to do switching, right? Or there were literally hundreds of thousands of people employed to build telephone booths. And then cellphones came and it is a beautiful thing, but then that created a whole new industry and all new kinds of jobs."
He has a point. The term we use to describe what happens when new technology replaces the old way of doing things is creative destruction. The new products or services build upon, improve and replace those before them. Society wins tremendously as we adopt new ways to live our lives, new opportunities, and new freedoms. How many people religiously travel by boat from one continent to another now that we have airplanes?
This is a sentiment Lyft echoes, but for a slightly different reason.
"There’s never going to be a situation where there won’t be drivers, I think," Rob Farmer, a Lyft product manager said. "I defer to the future and what that will turn out to be, but drivers are a really big part of our experience and it’s something that we want to focus on as well. For now, we are very excited to have drivers and passengers interacting together.The future of jobs in the transportation industry is murky and that is undoubtedly uncomfortable for those earning their living or cash on the sides in this jobs. But stopping progress isn’t the solution either.
The future of jobs in the transportation industry is murky and that is undoubtedly uncomfortable for those earning their livings or case in this field. But stopping progress isn't the solution.
What we can be doing proactively then is training our high school and college graduates with the knowledge and skills to be creators and innovators in ways that robots cannot replace them. To Lyft’s point, there is more to ridesharing than just a transaction. There is community and an experience from the interaction between riders and drivers.
I would avoid the doom that Medium projects. In addition, these ominous warnings should not be a cue to politicians and policymakers as the New York Times concludes.
If anything it's a reminder that our economy is constantly evolving creating out of nothing immeasurable possibilities. Innovation is not directed by government, but flourishes when it's allowed to operate freely.