Automaker AVs can’t compete with Uber and Lyft

As an autonomous future looms large, automakers such as General Motors, Ford and Toyota are racing to capitalize on self-driving technology. And while the technology itself still faces significant hurdles, there is even more uncertainty about the best ways to commercialize it. With billions of dollars of investment at stake, it is critical for automakers to make the right strategic choices in building businesses around the budding technology.

There is one option in particular that we strongly urge automakers to reject: launching their own ride-hailing networks in competition with Uber and Lyft. Yet this is exactly what we observe some automakers and their AV affiliates considering. GM’s Cruise Automation has said it intends to launch its own ride-hailing service, while Tesla has made it clear that it wants to do the same via its autonomous Tesla Network. Unfortunately, taking on the ride-hailing giants will be an expensive battle that will entail bleeding red ink for years