John Zimmer, president and co-founder of Lyft, thinks that autonomous cars will lead to human drivers becoming illegal in some US cities and that instead of owning a car, you’ll subscribe to a transportation service much like you do with Netflix.
Zimmer, of course, is no stranger to bold predictions.
In September, he published a post stating that most rides on the Lyft network will be in autonomous vehicles by 2021 and that private car ownership in major US cities will die off by 2025.
We recently had the chance to speak with Zimmer about what our autonomous future looks like and how Lyft plans to evolve as driverless cars become a reality. The interview has been edited for length and clarity.
Why Lyft wants to end car ownership
Zimmer’s push to end personal car ownership stems from his desire to reinvent cities we live in so that they are designed for humans instead of cars.
“In technology, we spend so much time in designing pixels in a screen, but we as a society don’t spend enough time designing the spaces that we live in or the cities that we live in. And our cities have been designed for the car, and mostly for the parked car,” Zimmer said.
According to a report by Bank of America Merrill Lynch, about 31% of urban land is dedicated to parking. What’s more though, most cars are only utilized about 5% to 6% percent of the time, meaning that most of the time cars are just sitting idle taking up space.
“Between 60% to 70% of major cities in the US are paved and I think that is a shame. And so step one in the process of returning to a city designed around people and for human interaction is changing the fact that the city needs to be designed around a privately owned car. That’s what’s motivating myself and our team,” Zimmer said.
How Lyft plans to offer a full alternative to personal car ownership
Zimmer said that for people to give up their cars Lyft will have to continue growing its offerings so that it can provide a mobility solution for every scenario, something the company is very much focused on.
For example, Lyft announced a partnership in January that helps connect senior patients with rides to and from their next medical appointment. And in September announced a program for the elderly that allowed them to book a car without having to download the Lyft app since many seniors don’t have a smartphone.
“We are already, in more ways than one, pushing towards that, where you add use cases for the passenger. We want to be a full alternative to car ownership,” Zimmer said. “Autonomous is one way and one part of the way we are going to accomplish that because it can reduce the cost to a large degree, and that’s why that is important because it could make it more and more affordable for people not own a vehicle.”
In fact, by taking a shared, driverless fleet vehicle, your cost per mile could be reduced as much as 80% versus a personally owned vehicles when driven 10,000 miles per year, according to Casualty Actuarial Society.
However, Zimmer said that even with human drivers there are still some situations where Lyft’s offerings fall short.
“One example now is I now have a kid and she’s almost one year old and having a baby seat in the car is really important, so there’s still a use case where we are not perfect for. So if we want to provide a full alternative we have to solve all of these use cases. And so that is the trajectory we are on over the next few years,” Zimmer said.
Driverless cars and human drivers will be needed for sometime
In two to three years, you’ll begin to see the first use cases for autonomous vehicles, Zimmer said. But that doesn’t mean human drivers will begin to disappear right away.
Human drivers will continue to be needed for sometime because autonomous cars will still have limitations, Zimmer said.
“Drivers are critical in that they can do all the trips that an autonomous vehicles can’t,” Zimmer said.
For example, many autonomous vehicles being built today still struggle to operate in bad weather or in certain situations like going over a bridge.
So instead of a fleet made up entirely of autonomous vehicles, Zimmer envisions a hybrid network evolving over the next several years where both autonomous and human driven vehicles are necessary to meet all of Lyft’s customers’ needs. This kind of approach helps give Lyft an advantage over companies working on just selling an autonomous vehicle, he said.
“One way to think about it is imagine an auto company or a technology company trying to sell you, the end consumer, a car with no steering wheel today. It’s going to take them a really long time for them to be able to do that because there’s always going to be that rare time when there’s rainy weather and you’re going to the airport where, say, they don’t allow autonomous vehicles,” Zimmer said.
“You wouldn’t want to own that vehicle because you might need it for that use case. But on that network if an autonomous vehicle does 10% of the trips, it’s still valuable. So you can have a car without a steering wheel on a network a lot sooner than you could if it was privately owned.”
The Lyft experience will become more like a ‘room on wheels’
The Lyft experience will begin to dramatically change once autonomous vehicles become part of its network, including how you pay for your ride.
Zimmer said that in order to provide all of a person’s transportation needs, Lyft could adopt a subscription model similar to that of Spotify or Netflix.
“In the future, you’ll have a miles plan on the Lyft network and there will be multiple vehicles you can choose from,” Zimmer said.
“So if you’re going to a family vacation for the weekend, you may want a larger vehicle that has an entertainment system and you can call it like “Movie Lyft.” If you want to ride to work in a vehicle and you want to be productive and do some writing, you can be in a “Business Lyft” or “Work Lyft.” And then maybe on your way back from a tough day at work you want to drive home in a “Bar Lyft” and have a drink with some friends or meet new people.”
These new offerings won’t only benefit the customer, they will also open up new opportunities for Lyft to make money.
“I think about things from the background of my hospitality and I think the future of transportation is more like a room on wheels. We’ll be designing all of those experiences and by unlocking every piece of your transportation needs we will be able to sell those subscriptions,” Zimmer said.
However, Zimmer said that the first generation of autonomous vehicles will look like cars we have today because it’s faster to get those to market. The “room on wheels” concept won’t become a reality until the second wave of autonomous vehicles, which is still some years off.
Human drivers may disappear, but new opportunities will be created
As autonomous cars become more like a room on wheels, new jobs will be created around the experience inside the vehicle and the service of the fleet.
“At some point, when everything goes fully autonomous, I do think there will still be a need for people in a large extent,” Zimmer said.
As new services are offered in autonomous vehicles, there will be a need for humans to fulfill those services. For example, in a “Bar Lyft” car, there might be a bartender.
“Whether it’s having a drink on your way home or helping patients get to and from an appointment, the human element of hospitality will always be there,” Zimmer said.
“There’s a lot of work that is going to be needed to maintain and operate this large fleet of vehicles. And I do think there will be multiple different types of services provided by people in those vehicles in the long run,” Zimmer said.
Human drivers could become illegal
In just five to ten years, it’s possible that some cities could even ban human drivers from operating vehicles in some areas.
“We believe that by 2021, autonomous vehicles will account for the majority of Lyft rides and I’d say in that kind of five year timeline is when you could potentially see the first city or two, or area, testing that type of rule,” Zimmer said.
Zimmer said that it may not be an entire city, but perhaps a part of a city or a neighborhood that bans human drivers to help ease congestion.
Cities ripe for this kind of experimentation include those that are densely populated and that suffer from bad traffic congestion, like LA or New york City, Zimmer said.
“Where is it so bad, where is traffic so bad that everyone is going to get behind that? You could imagine parts of Manhattan,” Zimmer said. “It does make me think that something could happen there just because it’s such a small geography with such a high density of people.”
Driverless cars could have a big impact on the real estate market
Driverless cars could mean big changes for the real estate market, Zimmer said.
“I think there are some really interesting impacts on real estate,” he said.
“Historically, transportation has guided a lot of real estate values. If you live near the 6 train, it’s more expensive real estate than if you don’t have access to the subway. So by making transportation accessible and affordable to everyone you can disperse that real estate value.”
For example, say you live about 30 minutes outside New York or San Francisco, but because of traffic it takes you about an hour and a half to get into the city each day. Odds are the value of real estate in this outside ring of the city suffers because of long commute times.
However, once autonomous cars are introduced, traffic begins to be reduced and the commute time becomes 30 minutes or shorter. This could help drive the value of the property in these areas outside the city up.
“You can make that real estate more valuable and then you can drive local economies in those surrounding geographies,” Zimmer said.
“Transportation has an incredibly sharp impact on the economy both in transportation of goods, but also in real estate. And I think this will both increase value and make it easier to transport goods and spread out the value of that real estate.”
Driverless car will help level the playing field
Autonomous cars will help drive down the cost of using a mobility service like Lyft and help level the playing field for those who can’t afford to own a car, Zimmer said.
For example, say a person wants to go to school, but can’t afford a car to get them there, so they have to take the bus. The commute via bus takes twice as long as driving, which means that person has less time to do homework and work and less time for employment, Zimmer said.
This means that person is automatically at a disadvantage when compared with someone who is able to quickly get to and from school in their own car.
“Accessibility to transportation is a really big deal,” Zimmer said. “I think it really does give greater accessibility and therefore upward mobility to those that can’t afford a car.”
Competition is growing, but so are the marketing stunts
There’s no shortage of competition when it comes to companies trying to develop driverless cars. And this makes sense because there’s a lot of money to be made, Zimmer said.
“There’s $2.15 trillion spent every year on car ownership. That includes insurance and all the aspects of car ownership. With that much being spent every year, competition is both positive and inevitable because it’s such a large opportunity,” Zimmer said. “It makes great sense that there would be competition and I think it makes us all perform better.”
A number of automakers and tech companies are rushing to have autonomous cars on the market by 2021.
Ford announced in August it plans to launch its autonomous vehicles for commercial use in 2021 and Uber launched a pilot program for its self-driving cars in September.
But these come with some caveats.
For example, Uber’s cars have test drivers, and Ford’s will operate only in certain geographical locations in certain weather conditions.
“There’s companies who have done marketing stunt with autonomous vehicles, you know, there are drivers in those vehicles. It can be classified as a pilot for sure, but there’s also an element to marketing to what I think a lot of companies have announced. And we want to focus on safety, which I think is incredibly important, especially when introducing this type of technology,” Zimmer said.
“Our advantage is focus. We are focused on building the best network for our drivers and passengers, which is a massive opportunity and gives us the opportunity to partner with a best in class car manufacturers and other pieces to that equation. The advantage is our focus and our ability to partner,” Zimmer said.
General Motors of course is one of Lyft’s biggest partners. The automaker invested some $500 million into the company earlier this year and is currently planning to roll out its first self-driving car on the Lyft network.
However, GM isn’t the only partner Lyft plans to have in the future.
“I believe we’ve said publicly that it is not an exclusive relationship. The relationship is strong and right now we are focused on working with them, but over time we will likely partner with multiple partners.”