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Farhad’s and Mike’s Week in Tech: Ride-Hailing News Owns the Road

A settlement in class-action lawsuits in California and Massachusetts maintains the status of Uber drivers as independent contractors.Credit...Eduardo Munoz/Reuters

Each Saturday, Farhad Manjoo and Mike Isaac, technology reporters at The New York Times, review the week’s news, offering analysis and maybe a joke or two about the most important developments in the tech industry.

Mike: Guten morgen, Farhad! How’s my German sound? I want to travel to Europe next year for vacation, and I don’t want to be treated like a dumb American. That is, unless “Brexit” ruins everything for me. Then I don’t know what I’ll do. Maybe the Hofbrau in downtown San Francisco?

Farhad: Well, you certainly are being your usual strange self today.

Mike: Right, well. Bitte schön. On to tech news!

So it’s August, which means everyone is out of town and on vacation and hardly thinking about technology outside of using Airbnb to book a room somewhere. Which is to say, not a lot of stuff happened this week. But I’ll do my best at summing up the whole lot of nothing that went on.

Twitter debuted “promoted stickers” for brands, essentially an advertising product that you’re supposed to apply to photos of yourself. I can’t think of anything less appealing, but perhaps I’m the wrong demographic since Snapchat seems to be persuading teenagers to stick macaroni-and-cheese ads on their faces. The future of advertising is grim, my friend.

Farhad: I don’t know what you’re talking about. I buy all of my products based on Snapchat ads. The other day, a friend sent me a picture of her face covered with stars and stripes, sponsored by Ford. I’m now the proud owner of an F-150.

Mike: Now I, too, want a truck.

Also, Gawker.com announced it would cease operations next week, a result of a lawsuit backed by the tech billionaire Peter Thiel that crippled the company. I know Gawker is quite controversial — especially in our circles, where many techies are cheering its demise — but I am sad to see it go. I do believe the work that was done there, overall, did more good than harm.

At the very least, other Gawker Media properties like Deadspin and Gizmodo will live on under the new parent company Univision.

Farhad: It’s intriguing to me that many of the people who work at Gawker.com will move on to those other Gawker websites. Several are going to Deadspin. Will they recreate Gawker.com’s spirit there? It will be interesting to watch.

Mike: Yeah. But this week seemed to be the week of automakers and ride-hailing companies making big news, mostly in the absence of other tech news.

Ford, for instance, made a grand proclamation that it expected to have a fully autonomous car fleet on the road within five years. This seems to be the magic number, since I’ve heard it from practically every large American automaker — and many international ones, too — over this last year. Personally, I think it’s all hogwash until I actually see a self-driving car on the road. And the only ones I’m seeing that are anywhere close to that come from Google.

And if these companies miss the target, everyone will forget since it’s been five years and our collective memories are terrible.

Also, Uber’s lawsuit settlement with drivers who claim they should be classified as employees was denied by the judge presiding over the case. It seems as though most of that involved some quibbles over the ultimate settlement amount owed to drivers, so my guess is we’ll see the two sides renegotiate to a higher price and come back with a number within the next few months.

Farhad: Uber has some money, I’ve heard, so it should all work out in the end.

Mike: If only I could say that about myself.

And this brings us to the main event: Uber. The company announced it was buying Otto, an autonomous vehicle research company that’s focused on upending the trucking industry. People I spoke to said the deal was worth about 0.9 percent of Uber, $680 million after the funds raised are included in the total. Also, Otto gets 20 percent of any trucking business profits they end up creating. Pretty sweet deal for a start-up that didn’t exist nine months ago.

Add to that Uber’s deal with Volvo to jointly invest $300 million into autonomous vehicle development. They plan to put a self-driving car on the road within — say it with me now — the next five years and are kicking off that effort with Volvo’s XC90, a prototype vehicle that will begin testing in Pittsburgh later this month.

Big promises! I have thoughts, obviously. But I want you to start, mostly so I can tell you why I think you’re wrong.

Farhad: Surprisingly, because I’m a columnist who’s paid to have thoughts, I don’t have many thoughts about this. It has seemed inevitable for some time that Uber was going to start doing autonomous vehicle testing, and the trucking thing also seems a bit obvious: Uber has always been open about its interest in logistics more than simply ride hailing, and this is a way for it to get into the logistics business.

Mike: Wow. Aren’t columnists paid to come up with ideas every week even in the absence of news? Come on, Farhad.

Farhad: No, no thoughts from me. But I am really interested in how the test of ride sharing with autonomous vehicles will go. The Volvos will have human drivers in them to act as a backup, but I’m curious about how the human passengers will react when the car is driving.

Will they be scared? Will they try to avoid self-driving Ubers? Will they expect the price to go down, since the driver is just sitting there? I think this will expose a lot more social and cultural problems than technical ones — and I’m looking forward to seeing how Uber addresses them.

Personally, I’d be thrilled to be driven around by a computer. Computers are my friends.

Mike: Yeah, they’re your only friends. Also in auto news: I reported that Lyft, Uber’s competitor, has been trying to sell itself to lots of different companies in the tech and auto industries, but it’s had a hard time finding any takers. In other words, my life story.

Farhad: I’ve been increasingly skeptical of Lyft’s future ever since Uber abandoned its China money-drain. As you wrote, this is a costly business, and the way it’s proceeding involves huge investments in expensive technology: mapping, artificial intelligence, autonomous testing. Lyft has long positioned itself as the successful second player in the market — the Burger King to Uber’s McDonald’s.

But the more that Uber’s investments pay off, the more pressure it puts on all other players in the market. And I wonder if ride hailing is turning out to be another winner-take-all market — something like online search or computer operating systems, where one company takes the bulk of all profits. I think the people at Lyft genuinely believe otherwise, and who knows, maybe in five years Lyft will be a vibrant, profitable company. But I’m pretty skeptical.

Anyway, see you next week.

Mike: Guten tag!

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