Insights | Tech Blog

Bringing Autonomous Vehicles to the Mainstream

Over the past eight years ride-sharing services have taken off, with Uber and Lyft taking commanding market followed by the likes of Sidecar, Wingz, Didi and others. Mobile technology has revolutionized the traditional taxi cab model. Consumers are able to request on-demand transportation directly to their location, receive upfront price quotes, and track real-time arrival times – all from a smartphone app.

In the wake of the success of this business model and with increasing consumer demand, there have been many new market entrants via startups, acquisitions, or proprietary product development.

February 21, 2018, Robert Bosch (“Bosch”) entered the picture, a Germany-based company with a core focus on the auto industry; however, more commonly known for household appliances and power tools. Bosch entered the ride-sharing game with the announcement of its acquisition of Splitting Fares Inc. (“SPLT”). SPLT, founded in 2015, is a Detroit-based startup offering ride-sharing services with nearly 140,000 users. The unique angle of SPLT is to connect riders who share a route to a common place, often connecting coworkers, fellow students, etc. and potentially removing strangers from the mix.  As a result of the transaction, Bosch has formed a new business division that will focus on vehicle sharing, ride-sharing, and connectivity-based services for vehicles.

Automotive industry players making a strategic shift into vehicle connectivity isn’t a novel concept. Other players that have already made the move, including Nissan’s partnership with Hytch and Ford’s acquisition of Chariot. In 2016, Ford acquired the van shuttle provider for ~$65 million – the first acquisition by Ford Smart Mobility.

General Motors (“GM”) has also demonstrated a commitment to vehicle connectivity. In 2016, General Motors acquired Cruise, a developer of autonomous vehicle technology for over $1 billion. Further, GM has heavily invested in Lyft with plans to develop a network of autonomous ride-sharing vehicles. The underlying belief of the partnership is that self-driving cars will first gain consumer traction through ride-sharing services before becoming widely adopted by individual consumers.

It appears the end game of the acquisition by Bosch may be to play in the world of autonomous ride sharing. In 2017, Daimler and Bosch announced a partnership for developing a self-driving vehicle and in early February of this year, announced they will begin testing autonomous vehicles within a few months. Now armed with the ride sharing technology component, Bosch and Daimler could be well positioned to compete with GM and any other market entrant in the race for mainstream autonomous vehicles.

Traditional automakers acquiring connectivity technology appears to be a trend that is not disappearing in the near-term, as industry players look to compete with tech giants entering their space including Tesla, Apple, and Alphabet. 

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