Quora: Who's Investing in Self Driving Cars?

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Answer from Bob Reisner, President & CEO at Nassau Business Funding & Services, Inc.:

Putting Google aside for a moment, the motivation of every other company is simple. Survival. It's a long answer but hang in, there is really a very simple reason why the technology for self driving cars is the same and why Uber, Google and Ford are all working independently on it.

Before Google started putting in real money and real talent, fully automated Self Drive Vehicles ("faSDVs") were something that would exist in the far distant future. A time far past the retirement of any executive in the automotive, taxi or rent a car business.

Google understood technology improvement curves and the first mover advantage. Technology improves exponentially, tech costs decline exponentially and the company that makes a particular subset of tech work first becomes number one in the space. After about five years of active work, all the non Google watchers realized that faSDVs were going to be real sooner than they thought. Probably by 2035 instead of 2080+. So individually and collectively, they made some modest investments to monitor the technology and to convince their stakeholders that they were 'involved'. So far no problem for any of these companies.

In the late 2013 to 2016 window, companies saw that Google was making astonishing progress… real autonomous vehicles were on the road and Google was ramping up its already large efforts. This forced companies, for the first time, to seriously consider faSDV technology and its impact on their industry and their company.

And what an awakening it was. Companies finally understood that the real introduction of faSDVs was going to be in the early 2020s (and maybe even a bit earlier). There would be faSDVs on the streets in five years, not fifty-five years.

And worse, these companies began to understand the economic impact of faSDV technology on their business. This faSDV tech was a probable binary event… their company might survive (even prosper), or it will die. And even the most cursory review indicates that most companies in these business segments will die. Let's look at a few of these industries.

Taxis/Rideshare

Taking away a driver saves between $50 and $100+ per shift or between $35,000 and $70,000 per year for a two shift operation. If you have access to faSDVs, you survive and make boatloads of money. And you will use some of this money to lower prices to drive your human driven competition out of business.

If you don't have access to faSDVs, you can't compete. You become the dinosaur (extinct).

There are only two solutions, buy faSDVs, or make your own. Some companies like UBER and Lyft will try some version of 'make'. Regional Taxi companies don't have the smarts, connections or money to go the build route, they just have to try to find someone who will sell them faSDVs.

Rent a Car

Who needs a car rental when the faSDVs are so cheap and available. The UBER app will be so much easier at the airport versus that long bus ride to the car rental office.

So car rental companies have to become like Taxi & Rideshare companies. And they will have the same need for faSDVs and the same options.

Lots of industries are going to be similarly impacted: Trucking, Food Delivery, Traveling Service Techs, Car Dealers, and many more. All with the same option, build or buy.

Automobile Manufacturers and 'WannaBe' Manufacturers

If you can't produce faSDVs, you go out of business. Really soon. Assuming 2020 is the date for initial volume delivery of faSDVs, any car company without a viable product by 2024 will be dead or walking dead.

If your company can make faSDVs, you will be able to sell all you can make and you will get a high profit price as well because of the very high demand from customers who also need faSDVs to survive.

If you can't make faSDVs at least as good as Google, you will have an increasingly difficult time selling your vehicles. Prices will drop and sales/marketing expenses will rise. Knowing that these non-faSDVs will depreciate fast, businesses in general will have an increasingly tough time justifying their purchase. Specific businesses like UBER and Taxi companies probably won't buy non-faSDVs at any price. In other words, if you can't make faSDVs or acquire faSDV tech you are going out of business because there will be fewer and fewer potential customers every year.

If you are an auto manufacturer, the future is clear and you have two possible positive responses: buy the tech from someone who wants to sell it or develop the tech on your own. 80% of the auto manufacturers around the world will end up buying or licensing the tech. Not the best solution but for most, but the only one they will be able to afford.

The top five or so auto manufacturers have the money and can marshall the resources to develop their own versions of faSDV tech. And they will desperately want to do so because they cannot see themselves being dependent on another company for this business critical technology.

Now that we know some auto companies and some other industry leaders feel the need to develop the tech, how will they go about it? It's also simple. Google has a five year plus head start and has shown the world that their technology works. Millions of miles on real roads and billions of miles in simulation. The only way to develop faSDV technology in time (2020+), is to slavishly copy the Google approach. There is not enough time to find an alternative set of 'certain' technologies and a 'different approach' is not worth the existential risk of development failure. So everyone will copy Google tech, license Google patents, use Google vendors and hire away Google employees.

These are the reasons why so many companies are going to try to develop faSDV technology and why the faSDV tech they develop will be so similar.

Google doesn't quite fit this explanation. A decade ago Google looked for follow on businesses that could potentially be as big as their core search business. The move to develop an faSDV was a 'moonshot'. A way to a new big business before anyone else saw the opportunity.

And it might work. In software and tech, a five to eight year lead is a lifetime. It's known as the 'first mover advantage'. If you can be first by a multi year margin, the competition might not be able to ever catch up. If the competition can't catch up then Google could dominate the faSDV space (as well as having other business advantages). And what company wouldn't want to dominate a monster business like auto manufacturing?

Google isn't copying anyone. They were first and everyone else is developing faSDVs because of the 'threat' from Google and they are copying the Google approach because they don't have enough wall clock time to do anything else.

Why are many companies like Uber, Google and Ford working on self driving cars if the technology behind those cars is going to be similar? originally appeared on Quora - the place to gain and share knowledge, empowering people to learn from others and better understand the world. You can follow Quora on Twitter, Facebook, and Google+. More questions:

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