Uber Buying 100,000 Mercedes S Class? Bullshit!

Last week German monthly business paper Manager Magazin made the headline of the worldwide press with a story about ride-hailing company Uber buying more than 100,000 Mercedes S Class with semi-autonomous driving features.

So-called “sources“ inside the two companies whispered about that deal to Manager Magazin.

The story was initially revealed by the news outlet online with the promise to learn more in their paper edition: a good marketing tactic to drive sales of paper, but is it for real?

Interestingly, the online paper is signed by Michael Freitag. Freitag is the same journalist that months ago wrote stories about Uber, then Facebook buying HERE. When you have sources like that sometimes it might be better to have no sources at all.

What made the story look - a bit - real was that it was immediately covered by Reuters in a long article - then copied from one news outlet to the next without even trying to understand where it was coming from and if the original “sources“ were rock solid.

What would Uber do with 100,000 cars?
The story clearly has not much ground, for several reasons.

First, it is easy to understand that Uber’s business model is not about managing a fleet of cars. The success of Uber, driven by its fast worldwide spread is based on being a software platform matching demand and supply. It does not directly employ drivers and surely does not buy or own cars.

OK but if there is no need of a driver?

Well, as of today the Mercedes S Class still need a driver, so if you are Uber you do not care that much about semi autonomous driving - either you need drivers or you don't but there not a middle ground.

The U.S. company is obviously very interested in fully autonomous driving, but if you still need a driver you remain in the current business model: the Uber driver buy his own car and try to make a living out of it - that is if Uber does not lower too much the prices…

The second problem is that Uber is mostly - if not exclusively - operating in dense, urban environments that are the most difficult for driverless cars. The most optimistic forecasts in the industry is to expect this type of fully autonomous cars to hit the market in 2025-2030.

Surely Uber is looking closely at autonomous driving, spending significant resources and talking to every car manufacturers and automotive suppliers working in this area, but the magical order of 100,000 vehicles has yet to materialize.

Friday, March 25th 2016

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