Can Uber Slingshot Ahead Of Google In Driverless Cars?

A classic move in car racing is the slingshot maneuver, where a trailing car drafts the lead car, riding in a reduced air pressure pocket to ease its movements, waits for the right curve, smashes on the gas and uses the extra power to slingshot ahead.

With three recent moves, Uber makes clear that it is drafting off of Google’s trailblazing efforts in driverless cars. What’s more, Uber is pulling into position to make a slingshot move on Google.

It once looked like Google and Uber would be teammates. That’s how I mistakenly interpreted Google’s $258 million investment in Uber in 2013. As I wrote at the time, the combination of Uber’s ride-hailing platform and Google’s lead in driverless cars brought together the key ingredients for a mobility-on-demand killer app.

The matchup would have been powerful because of the virtuous relationship between ride-hailing services and driverless cars. By removing the cost of human drivers, driverless cars could dramatically lower the cost to serve ride-hailing customers. Some, including Uber CEO, Travis Kalanick, estimate that such services could be less expensive for customers than owning a car — while still enabling hefty profits for providers. This would finance earlier and more aggressive adoption of the technology, since mobility service providers could afford to pay far more for driverless cars than what individual consumers might otherwise be willing. Some industry insiders estimate that mobility on demand business models could sustain driverless cars costing as much as $250,000–300,000.

In the face of such a large opportunity, however, the investment relationship was not enough. Neither Google nor Uber seemed willing to be dependent on the other for such a critical element of future success.

As Uber’s Kalanick explained to BloombergBusinessweek:

The minute it was clear to us that our friends in Mountain View were going to be getting in the ride-sharing space, we needed to make sure there is an alternative [self-driving car]. Because if there is not, we’re not going to have any business.

Developing driverless cars, he added, “is basically existential for us.”

Kalanick’s urgency led to a series of bold moves to acquire talent and establish Uber’s own driverless research and development lab. Last week, Uber busted through the pack chasing Google with three more bold moves:

1. The imminent launch of a pilot program using prototype driverless cars to serve ride-hailing customers in Pittsburgh.

2. A $300 million alliance with Volvo to develop fully driverless cars by 2021.

3. The acquisition of Otto, a San Francisco start-up focused on autonomous trucks.

Each of the moves rhymes with, and builds on, Google’s experience. They recognize that the race to build driverless car is now less about pure technology and more about real-world testing, validation and refinement. Commercial-size scaling capabilities will also be key.

Google has been aggressive about putting its driverless prototypes on city streets interacting with pedestrians, cyclists, and human-driven cars in real traffic conditions. According to its July 2016 report, Google’s cars have logged 1.8 million autonomous miles. It is testing in four cities, logging about twenty thousand autonomous miles per week.

With the launch of its Pittsburgh pilot, Uber ramps up a similar learning capability. And, by integrating testing with its ride-hailing service, Uber tops Google by adding real world customers into the learning mix.

By teaming with Volvo, Uber creates a partnership that supplies world-class test vehicles and, more importantly, offers a path toward address large-scale manufacturing and production capabilities.

Uber’s alliance with Volvo rhymes with Google’s collaboration with Fiat Chrysler (FCA). Each automotive partner provides a base vehicle for modification into driverless prototypes. Google and FCA were, however, noncommittal about the long-term implications of their collaboration. Uber and Volvo, on the other hand, are clear that their relationship, while not exclusive, is structured to enable a “longer-term industrial partnership.” Volvo also brings deeper autonomous vehicle expertise and experience than FCA, and thus more capabilities to the partnership.

Google’s precedent probably did not hurt Uber’s negotiations with Volvo, either. While Uber’s business model poses a real threat to automakers, it’s not hard to be less imposing than Google.

Uber’s acquisition of Otto was a master stroke. With just the Pittsburgh pilot and the Volvo deal, Uber would still have been significantly behind Google. With Otto, Uber acquires a number of significant, battle-tested veterans who help it narrow the learning gap and accelerate future efforts. Chief among these are Otto co-founders Lior Ron, who was head of product at Google Maps and Anthony Levandowski, a longtime member of Google Self-Driving Car Team. Levandowski will take charge of Uber’s combined driverless efforts.

With last week’s moves, Uber is well-positioned to develop, test and refine driverless cars. If, and when, it masters the technology, Uber has unmatched capabilities and customer relationships with which to smash on the gas and unleash the mobility-on-demand killer app.

Uber is not alone in challenging Google, however. Just this week, Ford announced its intention to build and commercialize fully driverless cars by 2021. General Motors, with its collaborations with Lyft and recent acquisition of Cruise Automation, is even further along. GM and Ford are among a long list of automakers and suppliers including Daimler, BMW, Nissan, Tesla, and Delphi setting similar targets and making sizeable investments.

Other technology companies, both large and small, are also in the race. Apple has not shown its hand but is clearly in the game. One notable startup is nuTonomy, a MIT-spinout that is charging hard towards driverless taxis in Singapore.

And, Google is no doubt readying its own moves. Fasten your seatbelts, the race for driverless cars is speeding up and getting ever more interesting.

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Chunka Mui is a business advisor and author of three books on strategy and innovation, including The New Killer Apps: How Large Companies Can Out-Innovate Start-Ups. This article is updated from one originally published at Forbes.