Making self-driving vehicles safe has proven more difficult than originally thought and CEO Ola Kaellenius recently wondered if the new technology really has the earning potentially some believed.
Daimler is one of several automakers and tech companies racing to deploy self-driving cars on a commercial scale. It’s become conventional wisdom in the auto industry that self-driving cars deployed in ridesharing services will provide safer, more efficient transportation — while also earning hefty profits for the companies making and operating the vehicles. But Kaellenius sees some roadblocks.
Ensuring that self-driving cars are 100% safe in crowded urban areas has proven harder than originally anticipated, Kaellenius said. Even if that technological hurdle can be overcome, Kaellenius is unsure if there is a sound financial case for an autonomous ridesharing service.
“The full-scale deployment would tie up a lot of capital with some uncertainties around the earnings potential,” he said. Daimler isn’t giving up on autonomous driving, but Kaellenius said that “to be the first one, does not make sense.”
Daimler has already established a partnership with archrival BMW to develop autonomous-driving tech. The company is also working with automotive supplier Bosch on the technology. The two companies are running a pilot program using modified Mercedes-Benz vehicles in San Jose, California.
The ridesharing business model requires companies to deploy large fleets of vehicles, as well as set up infrastructure for maintenance and dispatching. That represents a significant upfront investment, which might explain Daimler’s reticence. The startup costs of an autonomous ridesharing service hasn’t phased Waymo, which currently has a fleet of vehicles transporting paying customers in the Phoenix, Arizona, area, supported by a large maintenance facility. Ford has deployed fleets of self-driving cars in cities like Miami to prove it’s commercially feasible, but the cars are primarily used for delivery services. But the challenges remain significant.
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