Good morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to know.
1st Gear: The Self-Driving Cabs Are Coming
The endgame for ride-hailing apps like Uber and Lyft seems to be to eventually eliminate pesky, expensive and unionization-prone human beings from the equation. To do that they need self-driving cabs, and automakers want in on that game too, so they’re partnering up to get access to the apps’ existing extensive user networks.
The latest teamup is a big one: Ford is partnering with Lyft to develop autonomous cars that communicate with Lyft’s smartphone apps. Automotive News reports this will begin only with test vehicles, but expect more down the line:
Ford self-driving test vehicles will be connected to Lyft’s network, but at first, customers will not be able to use them, said Sherif Marakby, Ford’s vice president for autonomous vehicles and electrification. Ford will put human-driven vehicles on Lyft’s network.
Marakby did not say when Ford and Lyft expect to offer the first rides in self-driving cars.
“We’re not building prototypes for the sake of building prototypes,” he said, adding Ford intends to ultimately put thousands of self-driving vehicles in use.
Ford’s new CEO Jim Hackett is scheduled to meet with investors on Tuesday to outline the automaker’s strategy for boosting profitability.
Hackett’s plans to compete for revenue from mobility services, which include car sharing and ride-hailing, will be one area of focus for investors. The Lyft partnership fills in a piece of the puzzle.
In some ways, this feels like kind of a Silicon Valley do-over for Ford.
Recall that one big reason former Ford CEO Mark Fields got the axe was a botched deal between the automaker and Google to develop autonomous cars. That partnership was doomed by culture clashes and differences of opinion on how big and public it should have been, but it seems like Ford is finally getting the deal it sought with Lyft now.
2nd Gear: And Lyft Is Doing Its Own Thing Too
But don’t think Lyft is putting all its eggs in the Ford basket. The app giant is working on software platforms on its own too, as Bloomberg reports:
Apart from forging partnerships, Lyft is opening a self-driving vehicle development facility in Palo Alto, California, called “Level 5,” a nod to the designation of fully autonomous vehicles that don’t require human supervision. About 10 percent of its software engineers are working on the technology, Lyft has said. It’s hired Luc Vincent, a former senior director of engineering at Alphabet’s Google who helped develop Google Street View, to helm the effort.
Everyone’s in a race to get self-driving cars on the road first, from General Motors to Tesla to BMW to the tech companies.
3rd Gear: Toyota Up, Uber Down In Saudi Arabia
Meanwhile in Saudi Arabia, the mandate that finally allows women to drive cars is an incredibly positive social development—and one that the corporations will be quick to capitalize on. Now, automakers will be able to sell cars aimed at women and their families, reports Bloomberg.
That could be a positive for car companies like Toyota, but could also mean a decline for ride-hailing apps like Uber, whose customer ride base in Saudi Arabia has been about 80 percent women:
Market leaders such as Toyota Motor Corp. and Hyundai Motor Co., whose hulking SUVs are a fixture on Saudi roadways, may need to boost inventory of smaller models such as compacts and sedans for single working women and female students, analysts say. On the flip side, app-driven ride-hailing services such as Uber Technologies Inc. could experience a drop in demand, as more women buy their own cars and get behind the wheel.
The change by King Salman bin Abdulaziz to issue driver’s licenses to women starting June is the latest twist in a far larger effort to modernize and economically diversify the kingdom and lessen the economy’s dependence on oil.
[...] Initially, the liberalization move may create road safety issues as new, inexperienced drivers navigate Saudi Arabia’s streets, Lindland said. This could blunt the negative impact on ride-sharing services like Uber, at least at first.
Uber also could benefit from a new pool of female drivers for its car-hire service. The government also has a vested interest in seeing the company succeed — Saudi Arabia’s sovereign wealth fund is a major investor.
4th Gear: What It’s Like To Be An Auto Worker In Mexico
Barring any major changes to NAFTA, Mexico is increasingly the next big forefront for global auto production—Toyota, BMW, Ford and more have growing footprints there.
But this has not resulted in a crush of jobs and workers moving into the middle class the way it once did in Detroit. Workers aren’t being paid nearly enough for that, reports the AP:
Auto worker Ivan Flores spends his days transporting parts for U.S.-bound Audi SUVs at a plant in central Mexico, but he laughs when asked if he could ever buy one of the $40,000 Q5 SUVs the plant produces on his $2.25 per hour salary.
“For us it is a dream to buy a Q5; we never could,” said Flores, 40, who supports three sons on his roughly $110 weekly paycheck.
The premise of the auto industry since the times of Henry Ford was that workers would make enough to buy the cars they produced. Across the U.S. and Europe, the arrival of an auto plant meant the creation of middle-class communities, with employees taking vacations, buying homes, cars, perhaps even cottages and boats.
But in Mexico — where the auto industry has boomed under the North American Free Trade Agreement, with plants like the Audi factory that opened in Puebla state in 2016 — the industry has created something different: a class of workers who are barely getting by, crammed into tiny 500-square-foot apartments in government-subsidized projects that they pay for over decades. Many can’t afford even a used car, taking home as little as $50 per week after deductions for mortgages and cafeteria meals.
That story is worth a read in full. Remember where your car comes from; it’s not always a nice place.
5th Gear: VW’s Scania Gets Fined Too
It’s a wonder the Volkswagen Group has any money left over! The latest to get hit with fines is heavy truck division Scania, over cartel price-fixing with other trucking companies. Via Reuters:
EU regulators fined Scania 880 million euros ($1 billion) on Wednesday for taking part in a truckmakers cartel which has already cost four of its peers a combined 2.9 billion euro penalty.
The European Commission said Scania, owned by German carmaker Volkswagen (VOWG_p.DE), colluded for 14 years with the other cartel members on truck pricing and on passing on the costs of new technologies to meet stricter emission rules.
In July, Volkswagen’s MAN, Daimler (DAIGn.DE), Volvo (VOLVb.ST), Iveco (CNHI.MI) and DAF (PCAR.O) admitted to taking part in the cartel in return for a 10 percent cut in their fines. Scania did not settle.
Reverse: What Did You Call My Mother?
Neutral: Does It Matter Where Your Car Got Built?
Does the ethics of car manufacturing enter into your decision at all?