Uber isn’t holding its breath for driverless cars

Recent media stories on the rapid progress of driverless cars have sparked our collective imagination (more realistically than Johnny Cab from Total Recall did). One angle – fueled in large part by Uber’s investment in and talk of driverless cars – is a driverless Uber experience.

All of this news is a pleasant distraction from the battle that is currently raging to be the biggest, best logistics app. However, so long as cars are still being driven by humans, Uber’s overall strategy doesn’t change. More specifically, its future success is firmly rooted in whether it can attract and retain more drivers.

Aggressive user acquisition is Uber’s modus operandi. I remember filling in the first step of the driver sign up about a year ago, and I got hit with like 16 automated text messages and emails over the next month asking me to complete the process. Damn!

Acquisition of new drivers is expensive and the pool of drivers is limited because Uber isn’t attractive to certain types of drivers. A new feature can open a whole class of driver that wasn’t previously accessible…making user acquisition cheaper and bypassing a competitor like Lyft.

Enter UberCOMMUTE, a new ridesharing option that is positioned to exponentially grow the number of drivers on the platform.

COMMUTE is a being piloted right now in one Chinese city (Chengdu). It allows the driver to input her work address and pick up passengers who are on the way. COMMUTE uses Uber’s existing algorithms to minimize additional travel time associated with the pickup(s).

COMMUTE isn’t just about commuting to and from work, as the marketing would suggest. This is a mode that users can have open when they are driving everywhere. On weekend trips and evening out on the town, qualified drivers will be able to plug into Uber and be matched with passengers heading in the same direction, in real-time.

COMMUTE builds off of the success of UberX and UberPOOL but it is distinct from its predecessors because it flips the standard Uber logic on its head; the driver’s destination becomes the organizing principle of COMMUTE.

There are certainly issues that could arise during the pilot of COMMUTE. Once a driver finds one or two people on their way to work, she can decide to cut out Uber. Other problems are sure to bubble up. If Uber can prove out the value of COMMUTE and expand it to all of its major cities, this will change the game.

We can look to established services with similar functionality — Sidecar has a driver-centered feature, as do Zimride and BlaBlaCar. Waze is the only competitor that has similar scale as Uber does (the results of their summer pilot “Ride With” in Tel Aviv haven’t been released).

UberX and UberPOOL allowed the platform to scale its ridership through price drops. Yet the fares still 2–4X during rush hours and weekends in San Francisco. The additional drivers on COMMUTE would reduce or eliminate surge pricing (and Uber believes the feature will relieve congestion). If COMMUTE is popular even during non-commute hours, the additional supply will allow Uber to get much much closer to competing in price with public buses and cars.

Yes, Uber is investing in driveless cars. But today they are way more focused on aggressively recruiting more drivers to grow quickly and secure a monopoly on logistics. COMMUTE is all about that, and it could be a serious game changer…until driverless cars really are a thing.

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