The Future of Ride-Hailing: Integrating Autonomous Vehicles

Marc Kranendonk
Marc Kranendonk
Content Manager
June 29, 2023

Ride-hailing is that on-demand service that connects passengers with drivers through mobile applications. It’s Uber, Lyft, Grab and that lot.

We all know it, right? Most of us at least, pretty sure the tribes in the Amazon don’t know. I also think they couldn’t care less and aren’t even aware of the concept. Good for them.

Ride-hailing as a service is widely present and adopted in cities all over the world.

It has shaped transportation by providing a convenient alternative to traditional taxis and public transport. You don’t need to call or hail for a cab because you can book a ride through an app. It's always available, even late at night or early in the morning. Most importantly, it’s increasing in coverage and reaching towards more rural areas with limited transportation options.

It’s flexible and personalized travel to another level.

You have a range of vehicle choices, from standard cars, to luxury vehicles, or shared rides. You can even request music preference, temperature control, and have multiple stops along the journey. It doesn’t even feel like we’re talking about an alternate taxi service here. It’s the closest thing you’ll get to a private chauffeur (unless you have that already, congratulations, Kendall Roy).

Real-time tracking is commonplace too. The ability to track your driver in real-time, providing transparency and peace of mind, has set ride-hailing apart from traditional taxi services.

So, what’s next?

I’m no expert but I’m sure there are many aspects to ride-hailing that need improvement and innovation to continue moving forward. I just can’t really think of them right now.

However, as you can guess from the title, there is one topic that’s been circling around ride-hailing like an elephant in a room full of Toyota Prius Uber taxi's:  

Driverless Vehicles, also known as autonomous vehicles, or robotaxis, are being tested in a few cities worldwide.

Is it the answer to “what’s next?” in the world of ride-hailing? Let’s discuss.

Implications of Autonomous Vehicles in Ride-Hailing

We’ll start with what autonomous cars potentially bring to the table.

Driverless vehicles rely on machine learning and testing to optimize performance and enhance safety. They have to understand traffic behaviors, rules, elevations, unpredictable events, road blocks, hazards and more. Moreover, they have to do all of that better than people.

In a perfect world, self-driving cars can navigate traffic more effectively than humans because they don't have the same limitations. They won’t be distracted by phone calls, music, and passengers. They won’t suffer from fatigue, be susceptible to driving under the influence, or break other road laws. They don’t need sleep, holidays or need to take breaks to eat and drink.

They can save money, improve safety, and increase efficiency. The list can continue, but that's the main point.

That’s all potential, though. There are challenges in incorporating autonomous vehicles into a fleet of ride-hailing vehicles. That includes regulatory hurdles, legal considerations, technological limitations, infrastructure requirements and public perception and acceptance of the idea.

Challenges of Incorporating Autonomous Vehicles

Regulatory hurdles and legal considerations

An evolved regulatory framework would need to be put in place for autonomous vehicles to be accommodated. There is a need for clear guidelines regarding safety standards, liability, insurance, and licensing for self-driving cars. Additionally, globally, you must navigate through the intricate regulations of other nations. They’ll have different jurisdictions, which may impact the deployment and operation of driverless cars in different regions.

Technological limitations and infrastructure requirements

The biggest challenges in making self-driving cars are the sensors and systems needed for them to understand their environment. They require advanced lidar, radar, and cameras to ensure that it can safely operate efficiently, and autonomously.

It will need to process real-time data from these sensor points to make split-second decisions whilst navigating between unpredictable traffic situations. That’s why it requires advanced AI algorithms and machine learning models to perfect its decision-making and reduce chance in errors.

Detailed mapping and localization systems are needed for precise navigation. Ride-hailing services operate in diverse environments including cities with their own unique layouts.

The mapping and localization systems need to be scalable and adaptable to all the different environments for it to work well. Mapping the environment is important for sensors to understand their surroundings and detect changes happening around them. That requires collecting vast amounts of detailed data, including 3D imagery, precise road geometry, lane markings, traffic signs, and landmarks.  

Public perception and acceptance of self-driving cars

How do you get people to trust a self-driving car?

Accidents involving self-driving cars have and will happen, like with any mode of transport. There is always that unfortunate risk, and that’s why public opinion is important. The key is to be transparent, run extensive testing, and establish safety benchmarks to gain public trust.

Over time, people trust transport options more if they see thorough testing and safety measures that prioritize user well-being.

As an example, Zeppelins gained notoriety for being unsafe and dangerous in light of the 1937 Hindenburg disaster. We haven’t seen Zeppelin's fly around much since, except the Goodyear one. Airplanes, on the other hand, are everywhere flying every day despite their history of crashes too. The difference is, planes aren’t relying on Helium and Hydrogen (flammable stuff), are faster, and have gone through rigorous testing and safety procedures to ensure the smoothest and safest air travel experience.

People need to trust that a self-driving car will prioritize passenger safety in the event of unavoidable accidents and will try its best to protect them.

There is also concern about job displacement and labor impact. Justification and explanation for job loss of human drivers in the ride-hailing industry is important in swaying opinion. This is something that we’ll be expanding upon later on.

Benefits for Ride-Hailing Companies

Reduced operating costs and increased profit margins

Ride-hailing companies can significantly reduce driver-related expenses, such as wages, benefits, and incentives with a fleet of autonomous vehicles. A reduction in labor costs contributes to an increase in profit margins. So yeah, ride-hailing companies are interested in driverless cars for the same reason Mr. Krabs opened up a second Krusty Krab restaurant:

Autonomous vehicles can operate for longer periods of time, maximizing vehicle utilization and reducing idle time between rides. This leads to higher revenue generation per vehicle and improved profitability. Yeah, I read The Economist.

As they operate for longer periods of time, they can also be programmed to maximize driving efficiency, reduce fuel consumption and minimize wear and tear. That results in lower maintenance costs and longer vehicle lifespan.

I think Adam Smith would be proud of me.

Improved fleet management and optimized resource allocation

I’m gonna describe improved fleet management as dynamic dispatching. A fleet of autonomous vehicles can be dispatched based on real-time demand patterns, and be allocated to areas with high passenger demand. Ride-hailing companies can provide faster response times and boost customer satisfaction.

With all that AI and machine learning, these self-driving cars can also use real-time traffic data to choose the most efficient routes, helping with traffic congestion and reducing travel times. I think it would be like Mr Incredible's car in the first movie, but much more realistic.

Enhanced customer experience and loyalty

Herein lies an argument that can help with public perception. By adhering to a programmed set of rules and guidelines, customers can expect a consistent and predictable experience when calling for a self-driving vehicle. They’ll be obeying traffic laws and prioritizing the safety of the passengers.

This should give a stress-free riding experience and passengers can relax without being concerned about their drivers behavior or distractions.

Impact on Drivers

Throughout history, technological revolutions/evolutions have had an impact on careers, jobs and industries.

I don't think any big ride-hailing company will remove drivers completely because they have new driverless cars. Some customers will prefer to have actual people behind the wheel. I’m skeptical that large fleets of self-driving cars will appear out of nowhere and suddenly the primary source of income for a lot of drivers will disappear. They will co-exist.

If self-driving cars prove to be the next revolutionary step in ride-hailing, many drivers will see a shift in roles to vehicle operators and even fleet managers.

People will be needed to monitor and supervise these cars. Human oversight and intervention in certain cases will be necessary. Drivers’ roles may transition from actively driving to supervising and monitoring the self-driving system, ensuring passenger safety and handling exceptional circumstances that the autonomous technology cannot handle by itself.

With a fleet to operate, managers will be required to coordinate the operations, maintenance and logistics of the fleet. Drivers may have the opportunity to transition into fleet management positions and oversee the performance and efficiency of the self-driving vehicles.

Future Outlook and Conclusion

There are five main areas that will determine the future outlook of autonomous vehicles and its place in the ride-hailing industry.

  1. Technological advancements and testing. All the technology needed to perfect this innovation will need time, research and testing for these vehicles to operate in complex urban environments.
  2. Regulatory and legal considerations. Government and regulatory bodies across different countries and states will need to establish clear guidelines and standards for the operation, safety and liability of self-driving cars in ride-hailing services. Harmonizing this across different jurisdictions will be crucial to ensure a widespread adoption. And bureaucracy takes its sweet time in a lot of places.
  3. Public acceptance and trust. Building a rapport with the public will be critical to the progress and success of autonomous vehicle technology. That can only be achieved through transparency, demonstration of safety, and a lot of rigorous testing.
  4. Infrastructure and connectivity requirements. Developing and maintaining accurate and up-to-date high-definition maps, as well as robust localization infrastructure, is essential for the safe and efficient operation of autonomous vehicles. Robust communication networks are crucial for real-time data exchange, vehicle-to-vehicle communication, and interaction with infrastructure elements like traffic lights.
  5. Socioeconomic Impact. The widespread adoption of autonomous vehicles will have an impact on jobs. Ensuring a smooth workforce transition through retraining programs, social support and job placement initiatives will be required to mitigate any negative impact it will have.

The future of driverless cars in the ride-hailing industry hinges on these five areas. Will they succeed in doing so? We'll find that answer down the road. Literally, we'll either have the option to call for a driverless car or we won't.

Thanks for reading! If you enjoyed this blog and are interested in what provides for Ride-hailing and other industries, check out our solution pages to learn more.

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Marc Kranendonk
Marc Kranendonk
Content Manager
June 29, 2023