General Motors Plans Ride-Hailing Service Featuring Self-Driving Cars

ride-hailing, Naperville business law attorneyPleasant small talk with your Uber driver could be a thing of the past if General Motors has its way. The American automaker says it wants to introduce its own ride-hailing service in big cities in 2019—complete with a fleet of autonomous vehicles. If GM is successful, it would be two years ahead of rival Ford, which planned to launch a similar service by 2021.

As a business law attorney, I am always fascinated by how technology influences competition in the marketplace. It is also interesting to watch different industries join together to provide new products and services to their customers. The combination of self-driving cars and ride-hailing technology has provided and will continue to provide a number of good examples of such synergy for years to come.

“One of the Biggest Business Opportunities of All Time”

General Motors announced its plan during a conference call with investors this week. Company officials were unabashedly optimistic about the potential for the multifaceted project. “We think this represents one of the biggest business opportunities of all time,” said Dan Ammann, president and chief of GM’s autonomous vehicle strategy.

GM’s CFO Chuck Stevens echoed Ammann’s thoughts. “This business is potentially bigger than our current core business,” Stevens said.

The plan includes a rollout of self-driving vehicles that can operate more efficiently and safely than those driven by humans. The vehicles would be fitted with software similar to the ride-hailing software currently used by companies like Uber and Lyft. According to GM’s estimates, operating costs would be about 40 percent less per mile compared to services that have to pay drivers. In addition, each autonomous vehicle could generate hundreds of thousands of dollars in revenue, compared to the estimated $30,000 currently generated by each new vehicle GM produces.

The automaker also believes that the project would ultimately lower the cost of ride-hailing services for the average consumer. Most riders spend about $2 to $3 per mile using such services today, but GM says that it plans to drive that price “well under” a dollar per mile within the next eight years.

Investor Skepticism

Within minutes of the announcement, GM share prices dipped and stayed down despite the Dow Jones Industrial Average surging to an all-time high on the same day. Some may have doubts about GM’s ability to deliver on its lofty promises, especially considering the current state of autonomous vehicles and ride-hailing services.

Uber launched a pilot program involving self-driving cars in Pittsburgh last year, but each vehicle still requires two human attendants to ensure there are no problems and to record the car’s performance. There is also reason to believe that riders are likely to remain skeptical of the reliability of driverless cars.

Only time will tell if General Motors will meet its ambitious goals. In the meantime, if you have questions or concerns about how emerging technology could be best utilized for your company, contact an experienced Naperville business law attorney for guidance. Call 630-756-1160 for a confidential consultation at The Gierach Law Firm today.

 

Sources:

CNBC

Fortune

Hollywood Reporter