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Jon LeSage

Jon LeSage

Jon LeSage is a California-based journalist covering clean vehicles, alternative energy, and economic and regulatory trends shaping the automotive, transportation, and mobility sectors.

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Who Will Win The Self-Driving Taxi Race?

Uber

Ride-hailing firms Uber and Lyft have become transportation platforms for automakers and tech giants to someday bring automated, electrified mobility to the mass market. It’s still years in the making, but both companies are gaining significant support during a year when it looked like Uber could be coming to an end.

This year, Lyft has benefited from its solid reputation and service level, while Uber’s lion share of the market has been softened by a wave of crises starting earlier this year.

Uber faces another serious challenge with admission last week that it paid off hackers $100,000 over a year ago to destroy stolen data on more than 57 million customers and drivers. That’s brought up a few class- action lawsuits and a federal probe. Uber could be losing a wave of loyal riders enraged about having their personal date violated.

The latest scandal didn’t get in the way of Indian automaker Mahindra and Mahindra and Uber announcing a pilot project on Friday to test out electric vehicles on the Uber platform in India. Hundreds of EVs will roll out in Delhi and Hyderabad starting in March, and other Indian cities will be under consideration.

One of Uber’s rivals in India, Ola, earlier this year launched a pilot project in Nagpur that will lead to a larger rollout of electric cars in India. That initiative has found backing from Japan’s Softbank Group, which ironically is leading the way to head an investment group putting down about $10 billion on Uber. Softbank revealed that it had found likely sellers for the tender offer with shares valued at $48 billion, which is about 30% less than the previous private valuation around $70 billion.

So far the hacker data theft scandal hasn’t put the Uber funding round to a halt.

Related: China's EV Plan Could Cause An Oil Price Crash

Ola has an agreement with Mahindra to buy 40,000 vehicles, with some of them being EVs. Mahindra will be adding two new EVs to its fleet, with one being jointly developed with its South Korean unit, Ssangyong Motor Co, India is working on a new policy for EVs that government officials have claimed will follow China, UK, and France in banning fossil-fuel powered vehicles. EV sales are slight in India, which is one of the world’s fastest growing auto sales market with about 3 million units sold last year. Automakers are skeptical about India taking a leading role in EV adoption due to the high cost of batteries and lack of charging infrastructure in the country.

The national government continues to push forward on the plan for clean vehicles and energy, with some of it being deployed through public transportation. Uber and Mahindra will work with public agencies and private companies to establish charging stations, starting in Hyderabad.

While Lyft is getting most of the attention these days for forging alliances in developing autonomous vehicle rides, Uber is not out of the game. The company had taken the lead two years ago with test runs in Pittsburgh with Volvo vehicles, some of them plug-in hybrids. The company has been sidetracked by serious internal strife and executive turnovers, and an expensive and convoluted lawsuit with Google’s Waymo self-driving car unit over claims of intellectual property theft. Pittsburgh had stalled out for Uber, and efforts to start test projects in California were put on hold. But that’s taken a new turn.

Uber will be buying up to 24,000 self-driving cars from Volvo, with most or all of them being the XC90 SUV equipped with autonomous technology. The deal will go on at least from 2019 through 2021. Uber’s Advanced Technologies Group is developing an automated system to be used in the Volvos.

Uber has been testing out autonomous Volvo vehicles for more than a year in Tempe, Ariz., and Pittsburgh. Drivers are still included in the front seat to take over the vehicle, if necessary, for safety. The companies had already committed to a $300 million alliance to develop self-driving vehicle systems, including steering and braking features and sensors. Related: U.S. Oil Has One Fatal Weakness

Lyft is in a stronger position to lead the way with electrified autonomous vehicles deployed in mobility services through its partnership with General Motors and its Maven car-sharing unit; a research partnership with Alphabet Inc.’s Waymo; and agreements with Ford and startups Nutonomy and Drive.ai to incorporate self-driving cars into Lyft’s fleet.

While Uber is the largest ride-hailing company in the world, Lyft doesn’t seem to have an intention for going that route. Perhaps becoming the largest, or a close second, ride-hailing company in North America, would be sufficient. The company is gaining private equity funding, lately seeking to raise an additional $500 million in a round led by CapitalG last month, an Alphabet venture subsidiary. Lyft is being valued around $11.5 billion, much lower than the peak Uber had reached last year, but much closer to its competitor’s new market valuation. Some of the funding will go toward Lyft entering the Canada market.

It’s been a big year for Lyft. The company now covers 95% of the U.S. population, with over 100 new markets being added. Lyft was also granted permission to test autonomous vehicles in California. It came two months after the ride-hailing firm announced plans to offer a self-driving car as a ride option in the San Francisco bay area.

By Jon LeSage for Oilprice.com

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