Transportation as a service — aka TaaS — is coming and it will make a lot of money for somebody. The idea presumes that private vehicle ownership will slowly fade away to be replaced by apps that will summon a vehicle to your location whenever you need transportation, take you where you need to go, drop you off, and then drive to the next person needing a ride.
The cost of all those individual journeys will be less than the cost of owning a car after you pay a loan, taxes, and insurance, pay for maintenance and repairs, and then pay to put gas in the tank (or electrons in the battery). The other component that afflicts all vehicle owners is depreciation. Unless you are buying a rare COPO Chevelle 396 — in which case you would never ever actually drive it — whatever set of wheels you choose to own will be worth less next month and next year.
The sum of all those costs and expenses is known as “total cost of ownership” and it can add up to be a big chunk of change, especially if you live in a city and have to pay for parking as well. No wonder paying a little bit for a ride when you need one seems like a good idea to lots of people. But for the owners of ride hailing services, the key to profitability is eliminating the human driver. That’s when TaaS becomes what one auto executive describes gleefully as “a license to print money.”
DARPA Started It All
Self driving cars have been the dream of a generation of software engineers ever since DARPA sponsored its first Grand Challenge in the Mojave Desert in 2004. Since then, millions of hours and billions of dollars have been spent by companies like Google, Tesla, Uber, and Cruze to develop cars that can drive themselves. Despite all that time and money, there are still no self driving cars in regular TaaS use, although Waymo has a test fleet in Phoenix and Cruise, a start up owned by General Motors, is operating another test fleet in San Francisco.
We never say anything bad about Elon Musk, who used to be the patron saint of CleanTechnica until he stopped following us on Twitter, but his oft repeated promise that a Tesla will soon leave Los Angeles, drive itself across the United States and park itself in New York City is now several years late in coming true. A Tesla did drive 50 miles from Redwood City to Santa Cruz recently, so that trans-continental road trip may be happening any
day year now.
Microsoft Invests In Cruise
Self driving cars will be more like computers on wheels than any car presently in production, so it is no surprise that Microsoft is cozying up to General Motors to become its cloud computing partner of choice as the Cruise self driving technology progresses. In fact, Microsoft is kicking $2 billion into the pot to support the work in autonomous driving the company is doing. The cash injection from Microsoft raises the market value of Cruise to around $30 billion.
“Advances in digital technology are redefining every aspect of our work and life, including how we move people and goods,” Microsoft CEO Satya Nadella said this week according to The Verge. “As Cruise and GM’s preferred cloud, we will apply the power of Azure to help them scale and make autonomous transportation mainstream.” A year ago, Cruise unveiled the Origin, a self driving people pod that reportedly will be built at GM’s historic Hamtramk factory north of Detroit.
Microsoft has been working quietly in the background to build a connected vehicle platform based on its Azure cloud computing platform. Renault Nissan became the first sign up to use the Azure architecture in January of 2017. Volkswagen became the second legacy automaker to choose the Azure system in October of 2018. Previously, GM used Google for its app and email functions but it appears now it will transition that business to Microsoft as well.
Dan Ammann, CEO of Cruise, told the press this week, “Our mission to bring safer, better and more affordable transportation to everyone isn’t just a tech race – it’s also a trust race. Microsoft, as the gold standard in the trustworthy democratization of technology, will be a force multiplier for us as we commercialize our fleet of self-driving, all-electric, shared vehicles.”
“Microsoft is a great addition to the team as we drive toward a future world of zero crashes, zero emissions and zero congestion,” added GM CEO Mary Barra. “Microsoft will help us accelerate the commercialization of Cruise’s all-electric, self-driving vehicles and help GM realize even more benefits from cloud computing as we launch 30 new electric vehicles globally by 2025 and create new businesses and services to drive growth.”
The promise of self driving vehicles is alluring but many of us expected disruptive start up companies to make it a reality. Now in a surprising turn of events, it seems GM and Microsoft — elder statesmen in their respective industries — may actually get their first. Maybe there’s life in both companies yet.