When Google invested over $200 million in Uber a couple of years ago, everyone thought that it was the start of a long-lasting partnership that would bring numerous benefits to both companies and would solidify the leading positions they have in their respective industries. But judging by the latest news coming from the Silicon Valley, it seems that they are more likely to part ways, just two years after they started collaborating.
Earlier this week, Uber announced that it has reached an agreement with Carnegie Mellon University (CMU) to start a partnership that will focus on the development of self-driving automobiles, which was followed by a report that Google was planning on launching an Uber-like ride-hailing app. This suggests that the companies are stepping all over each other's turf and that their partnership might be nearing its end.
One of the key aspects of the collaboration between Uber and CMU will be construction of a research center in Pittsburgh, that will focus on the development of autonomous driving technology. Professors and students from the university will work at the Uber Advanced Technologies Center and will conduct research in the areas of mapping and vehicle safety and autonomy technology, as Uber stated in a blog post on the company website. “The center will focus on the development of key long-term technologies that advance Uber’s mission of bringing safe, reliable transportation to everyone, everywhere,” said the company.
What Uber hopes to achieve with this partnership with CMU is probably getting a head start in the future driverless taxi industry, where autonomous cars will pick up riders on-demand. Travis Kalanick, Uber's CEO, has already said that self-driving cars are the future, and that the time will come when drivers will become obsolete. Last year, Kalanick said that using driverless cars would be a great way to reduce the cost of ride-sharing services, which are now considered by many to be too expensive. Given that the biggest portion of Uber's fares goes toward the driver, with a considerably smaller part taken by the company, eliminating drivers out of the equation will certainly make Uber rides much cheaper.
According to some estimates, an Uber ride without a driver could be as much as 75% cheaper than the fares passengers currently pay, which would certainly make them happy, but on the other hand, will leave thousands of drivers working for Uber without a job. Be that as it may, even though there are a few clear downsides of Uber developing driverless cars, they will probably be outweighed by the advantages of introducing autonomous taxis, which include improved road safety and reduced congestion, on top of lower fares.
But, with Uber opting to make its own self-driving cars, it is moving into territory that Google is all too familiar with. With this move, the ride-sharing company is challenging its own partner in a game where the partner is an undisputed leader at the moment, with a major head start over every other company working on autonomous driving technology. Also, it goes against the claims Uber itself has been making over the past couple of weeks, saying that it is becoming a significant force in the labor market, creating new jobs in the cities it operates in. On top of turning Google into a fierce rival, this might add to the issues and controversies that have plagued Uber lately, further hurting its public image.