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Selling Rides

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January 24, 2019

At one point in time, every third American owned a horse. Today, every 1.3 Americans owns an automobile. The landscape has changed dramatically, and along the way, our concerns about animal feed, stables, and horse dung, turned to smog, traffic, and climate change.

Much of this change was propelled by the internal combustion engine, and over the course of several decades, horse ownership was replaced by car ownership. With this shift, cars were woven into the fabric of America, affecting everything from infrastructure to culture.

At 500, we have our eyes on another monumental shift—ride-sharing adoption. We see a future in electric vehicles, autonomous vehicles, and the associated technologies that will change the way we do everything. But which technologies will revolutionize the cars of today as the assembly line did for the generation before? Which startups will lead the charge?

Selling Rides:

Michael Julve & Vijay Rajendran, 500 Startups 

 

       Your evening commute begins when a pre-scheduled ride picks you up and takes you home. The ride looks like a car, but doesn’t resemble the ones you used to see. You get in and notice there is time to spare. You say to yourself “why not save some money” and go with a cheaper, longer route? This means more time to catch-up on Netflix. Looking up from your device you notice the lane next to you is full of electric-powered bicycles and scooters. The same lanes that used to be filled with accidents, traffic jams, parked cars and traffic cops. Soon you’re home, and by some old force of habit you start to say “thank you” as if to address a driver that was never there. The car pulls away to its next ride without missing a beat. As you walk in the front door you check your watch, its  05:30 pm on Monday January 20, 2033.

Industry Shifts Toward Self-driving Fleets

While the “self-driving fleet” seems like a farfetched sci-fi scenario it is right around the corner. With release dates as soon as 2020, it’s a question of when, not if, there will be self-driving fleets. Even before the release date announcements, industry shifts were evident. First and foremost, there were shifts in capital: Softbank invested 2.2 billion into GM’s autonomous vehicle (AV) division, Daimler invests 900 million annually, and BMW invests more than 630 million annually into their own autonomous vehicle divisions. There is also a shift in sectors: GM invested in a Chevrolet Bolt-powered ride-sharing service, Uber is building an AV division, Grab funds Drive.Ai and partners with NuTonomy, Daimler (Car2Go) and BMW (Drivenow/Reachnow) are combining their ride-sharing services, and Lyft has even partnered with Aptiv to shuttle guests to the last consumer electronics show. We see a convergence in the transportation space between automakers (OEMs), suppliers, rental car entreprises, ride-sharing companies, and other transportation companies. Given these shifts, there are two primary questions that we need to answer: what are the catalysts to the self-driving fleet? And, why after so many decades will the industry begin to sell rides instead of cars.

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