Over the course of the last eight years, Uber has become a household name, and the company has changed the way many people get around town. Uber previously has been a company that has operated with minimal liability risk and minimal assets. After all, its drivers provided their own vehicles and assumed a significant amount of liability for their own actions on the road. Nonetheless, many people have opted to accept this exposure to potential liability and to use their own vehicle for work-related purposes by driving for Uber. For some, this is a side hustle. For others, this is a primary source of income. However, this stands to change in the near future.
The Purchase of Autonomous Vehicles
Recently, Uber made the unprecedented announcement that it plans to purchase 24,000 autonomous or self-driving vehicles. This contract that it has made with Volvo essentially changes the business model for Uber substantially. This should not be news to many Uber customers or drivers who pay attention to the news. Uber has been testing the use of autonomous vehicles in several markets in recent years, including in Pittsburgh and in other locations. While the transition from using the services of Uber drivers to using autonomous vehicles will not occur instantly, it is expected to occur rather swiftly.
What This Means for Uber Drivers
Because Uber plans to bring 24,000 autonomous vehicles on the road in the very new future, it stands to reason that at least 24,000 drivers will be out of a job. In fact, this number could potentially be higher. After all, some drivers only work a few hours per day, but autonomous vehicles can operate for many more hours each day. One vehicle may therefore take the job of several Uber drivers. However, autonomous vehicles cannot fill all roles that a human Uber driver has. For example, many Uber drivers participate in the Uber Eats delivery program. This program requires the drivers to walk into a restaurant, pick up food and personally deliver it to the customer.
The Impact of Autonomous Vehicles on Uber
While Uber drivers may not be happy about the company’s transition to autonomous vehicles, the move is not without its risks for the company itself. Keep in mind that Uber currently displaces at least some of the liability risk as well as vehicle maintenance costs, fuel costs and more on the drivers. Without contracted drivers assuming these risks and costs, the company will face increased overhead and exposure to risk. Uber has not yet released information about how the use of autonomous vehicles may increase service rates that it charges its customers.
Autonomous vehicles once seemed like a novel concept, but this technology is increasingly becoming more prevalent. In addition to Volvo, Tesla and other auto manufacturers are working hard to make this technology more mainstream and more affordable for various uses. With this in mind, it is likely that this purchase of autonomous vehicles by Uber is only the beginning of mainstream use of self-driving vehicles and of the decreased need for human drivers by various transportation companies.