Boston, MA. Yesterday, Uber announced that customers in San Francisco will soon be getting rides in self-driving cars. The technology is still a work in progress, but something else about the nature of the rollout shows why traditional automakers’ brands and business models are at grave risk, according to Lux Research.
“Uber is not offering ‘self-driving Fords’ or ‘self-driving Volvos’—even though that is, technically, what the vehicles are—but ‘self-driving Ubers,’” said Mark Bünger, Lux Research VP of research and author of an Analyst Insight titled “Why it’s important that you can ‘Take a ride in a Self-Driving Uber’ now (or soon)”.
“The fact that ‘Uber’ is now the brand being pushed and that consumers are aware of—not the vehicle make—portends exactly the kind of industry disruption that carmakers have been fearing since Google first announced its autonomous vehicle program,” he added.
Lux Research’s commentary on Uber’s plans also includes these observations:
- Technically the move is just an incremental step. The San Francisco offering is just an expansion of technology and a business model that Uber announced long ago, and has been steadily rolling out since then. The cars will still have an “experienced operator” at the wheel, and similar self-driving rides have been happening in Pittsburgh for months.
- Branding-wise it threatens disaster for automakers. Uber’s brand awareness approaches 90% in the U.S., and tech giants Google and Apple are the most valuable brands in the world. If getting an “Uber” becomes as synonymous with cars as “googling” became with search, automakers could face a nearly impossible uphill branding battle for consumer mindshare.
- Automakers need outside innovation to fight back. Tesla’s electric drivetrain rapidly gained its brand awareness and perception numbers that rival century-old carmakers—even with no advertising spend. Auto OEMs should recognize how autonomy, ridesharing, and other modern contrivances are changing what consumers care about, and partner to fill gaps.
