Uber rides could get 80% cheaper during the following 10 years

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Uber rides could get 80% cheaper during the following 10 years

Uber and Lyft are worth a combined $84 billion after their massive initial public offerings this year, but that’s only a small fraction of what UBS estimates the global robo-taxi market can grow to by 2030.

Current evidence tells us that the robo-taxi market could even reach the point of $2 trillion by 2030.

What does this mean for consumers?

The things that interests most of us, the ones that actually use ride sharing, is that, during the following 10 years, it’s highly possible that fares will drop by at least 80%, generating even more competition between public transport and ride sharing companies.

“The average fare paid by passengers could fall by more than 80% and become cheaper than a metro ticket. “In such a scenario, the robo-taxi fleet would still generate a healthy profitability margin of more than 30%.”

the team of analysts wrote in their lengthy report to clients, published earlier this month.

This is, of course, bad news for the public transportation systems that have already shown a decrease in customers. Uber and Lyft are becoming more and more popular and a more convenient alternative to buses and trains.

This autonomy concept could generate another debate on an already complicated and closely watched measure: the utilization rates. These actually represent the time a car actually spends carrying a fare-paying passenger was at the core of Lyft’s lawsuit to change New York City’s minimum wage rules for ride-hailing drivers, which it lost in early May.

“The utilization rate of the robo-taxi fleet would reach 50% over a 24- hour shift,” UBS writes. “That is twice as high as Uber/Lyft’s utilization rates today, and 10 times higher than a private car.”

UBS said

But first we need to see what the “inflection point” will bring us

With technologies bringing us closer to the idea of self driving cars, companies must get ready during the following decades to properly manage human drivers alongside their eventual robot replacements. UBS expects that inflection point to begin in 2019, escalating over the next decade.

“Once the inflection point is reached, we believe the growth rate for robo-taxi adoption will be steep,” the analysts said. “We remain confident that the robo-taxi business model works both financially and technologically, although we delay our forecast for robo-taxi (L5/L4) penetration by 1-2 years, mostly to reflect higher efficiency of the fleet as shown in our simulation (i.e. fewer cars are required to cover demand).”


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