Uber's network effect is its driver network. It will find it a lot harder to compete if you no longer need drivers, when it has to compete with real car companies that could be able to undercut them on cost.
I agree. The fact that autonomous cars will likely reduce ownership will put a squeeze on car companies, and it might make sense for them to branch into service areas, as they can get the cars at cost. I guarantee that for 10,000 Camrys purchased by Uber and 10,000 Camrys built and shuffled to a ride service division by Toyota, Toyota's ride-sharing division will get the sweeter deal on price.
Put another way, it's much easier for Toyota to start a ride service company than it is for Uber to start manufacturing cars to get them at cost.
Ah, but the car companies have already expended that capital. The problem here is they will have a lot of building capacity from all the factories they own, and possibly less to build with that capacity. There's nothing stopping them from buying extra needed capacity from another company, but in the meantime it may help them fill the lack of utilization they may see. At some point, some factories will need modernization as normal, and they can choose at that point to reduce factory capacity.
The point is that it's a possible strategy to get them from point A to point B when they've already banked heavily on certain future production trends if they've overestimated.
To succeed worldwide, they simply need to be as good as Uber, but cheaper. And if the capital cost of the car becomes half of the cost base of taxis, a 10% saving matters.
Toyota would have to prepare for worst-case load and let those cars sit idle to keep them available. And they'd have to do that in almost every city in the world or their app would just be another local annoyance.
Also, if you order a Toyota and a Ford shows up you're going to laugh and tweet it.
On the other hand, it does give them a stable production target which would level out manufacturing spikes...
If car manufacturers tried to clone what Uber has built they'll probably flop on making the technology usable, and the experience may just be overall frustrating.
People will still buy Rolls-Royce or Mercedes S-class for the comfort, but most Toyota customers don't care if they're car pooling with 3 other people or sitting in a car that's not their own.
