Will Uber still exist in 10 years?

More than a year ago I wrote a paper on Uber as an MBA assignment as part of a course I was doing at the time. I was arguing that Uber needed to bring their own self driving car into the market because this is their only hope in the fight against traditional car manufacturers. This adds to that.

What I meant then was that if Uber allows car manufacturers to develop the technology for self driving cars themselves without relying on Uber’s IP to do so, what will then stop them to also build the platform that Uber currently operates and offer it with the car? Uber will be put out of business.

The way the car future looks right now is that consumers will no longer be buying cars, they will buy mobility credits. Thus a manufacturer builds the car and sell it either to a 3rd party that will afterwards sell mobility credits to consumers, or be themselves operators and address consumers directly with these mobility credits. The mobility credits are swappable for car rides. Either way, such a business model will affect Uber’s current model.

It seems that day is closer than I thought. Wired published today an article on Mercedes announcing self driving taxis in just three years from now. 3 years! In three years we will be seeing completely autonomous Mercedes taxis driving around. And other manufacturers to follow soon thereafter.

What are then Uber’s options in such a world?

1) Keep what they are currently doing, lease a fleet of such self driving cars and then wait to be squeezed or put out of business due to increasing competition.

2) Strike a deal with car manufacturers and incorporate the current Uber technology (which is awesome!) into their cars such as consumers will ultimately be using the Uber app to order rides. On the long run it will turn into a bidding war between these such platforms (uber, lyft, get, etc.) that will lead to continously shrinking revenues. At some point car manufacturers will have had their own platforms built which means game over.

3) Develop their own cars with self driving technology, take advantage of the platform they currently have built and take the competition directly to car manufacturers. Difficult because they miss the know-how and building cars is not a simple thing to do. Especially when they will need to build a range of models to satisfy consumer’s needs.

4) Develop a new business model where they can use the riding habits of their users and develop new spending models adapted to the consumer’s needs. They can use this know-how to come up with winning mobility credit-spending models that could make the difference. For how long though?

Whether they will exist on the market in 10 years or not, difficult to say. I believe they won’t if they stick to the current business model and don’t pivot quickly. Or at least pivot to something that would ultimately give them some breathing room to develop their own car.