Uber and Lyft are bad at recalls, Tesla is still sliding, Maven is packing up in some markets, and Toyota is playing games, all in The Morning Shift for Tuesday, May 21, 2019.
The entire foundation of ride-hailing services like Uber and Lyft is their repurposing of their workers’ personal vehicles, with the pitch being that you could use your own car to make you some money. But that also comes with its own risks for those companies and their customers, particularly when vehicle maintenance and unfulfilled recalls play into the mix.
A review of data of ride-hailing vehicles in the Seattle and New York City areas by Consumer Reports revealed that about one in six of those vehicles had unaddressed safety defects. Here’s more from CR’s review:
Millions of riders rely on ride-hailing services Uber and Lyft for daily transportation. But according to a Consumer Reports review of data from New York City and the Seattle area, a notable number of ride-hail vehicles registered for Uber and Lyft service, about 1 in 6, carry unaddressed safety defects.
“Uber and Lyft are letting down their customers and jeopardizing their trust,” says William Wallace, a CR safety policy advocate. “Uber’s website says people can ‘ride with confidence,’ while Lyft promises ‘peace of mind,’ yet both companies fail to ensure that rideshare cars are free from safety defects that could put passengers at risk.”
Here’s just a few examples of some of the recalls and warnings Consumer Reports discovered:
We found vehicles with glaring issues that pose serious risks, such as deadly Takata airbags that could hurt or kill the driver or front-seat passengers. There were unfixed defects involving the potential for vehicles to catch fire or for engines to lose power entirely. For example, one of the 2011 Sonata’s open recall notices says, “Engine failure would result in a vehicle stall, increasing the risk of a crash.”
The review in those two markets covers about 94,000 vehicles and found 15,175 with one or more open safety issues. There were 25 cars with five or more open recalls. Consumer Reports notes, however, that these two markets alone do not necessarily reflect the conditions of ride-hailing vehicles on a national level.
While all of us are ultimately responsible for the maintenance of our own personal vehicles, companies that also capitalize on those vehicles should also have policies in place to protect the customers that get taken for a ride. But Consumer Reports finds that Uber and Lyft don’t seem to go very far in ensuring the cars its workers are driving are safe for the road:
Uber and Lyft allow vehicles on their platforms as long as they are legally registered and no more than 10 to 15 years old, depending on the area where they’re located. Local ordinances may be more restrictive, with requirements for a vehicle inspection or for drivers to obtain a legal permit to work. But neither company has a black-and-white policy in place regarding all open recalls.
In response to our questions, Uber and Lyft said they’ve taken a number of steps to address unfixed recalls in vehicles on their platforms. Uber, in particular, says it encourages and reminds drivers to get recalls fixed, and it identifies and blocks vehicles on its platform that have some of the most dangerous open recalls, ones with “DO NOT DRIVE” warnings from the manufacturer or the National Highway Traffic Safety Administration.
Those warnings, however, make up only a sliver of all vehicles on the road with unaddressed recalls.
It’s also worth noting that most local governments also do not have specific regulations nor guidance for ride-hailing companies to manage the safety recalls of the vehicles registered under their services, beyond the standard regulations for vehicle inspections.
Consumer Reports finishes its review with a scolding for Uber and Lyft, saying there’s no excuse for companies in the digital age with billion-dollar valuations to not do more to ensure the vehicles they profit from are not a safety risk for their customers. And they’re right.
Tesla is having a very bad 2019 and it continues to get worse, with Morgan Stanley cutting its worst-case scenario stock price for the automaker from $97 all the way down to just $10, as reported by Bloomberg:
Jonas lowered his “bear case” for Tesla shares from a previous estimate of $97, which assumes Tesla misses its current sales forecast in China by about half, and kept a price target of $230. The stock fell 2.6% to $200 in pre-market trading.
Tesla has drawn criticism for weak deliveries. It handed over just 63,000 cars in the first quarter, yet expects to deliver as many as 100,000 cars in the second and four times that for the year. Hitting the full-year target is going to be a “Herculean task,” Wedbush Securities analyst Dan Ives said on Sunday.
Tesla’s plan was for a steady stream of Model 3 orders in the U.S. to help balance out its efforts to begin growth in Europe and China, but with Model 3 demand slumping and China expectations falling through, things are getting rough. Tesla also has the trade issues between the U.S. and China to worry about, as well as its own financial management.
This probably isn’t the last of the declining valuations for the company, but it’s on a never ending saga of bouncing back, so we’ll see if they can pull it off again and turn it around.
Turmoil has engulfed the Galactic Republic. The taxation of trade routes to outlying star systems is in dispute.
The U.S. and China continue to pile up trade tariffs against each another as their negotiations for new trade deals seemingly continue to go nowhere, and some automakers are getting caught up in the struggle.
Toyota is trying to work out a way of playing this dangerous game, where one wrong investment move could draw fire from either country. Their solution is to try to strategically balance investment and schedule announcements, as Reuters reports:
The automaker said it would establish a green-tech research institute with Tsinghua University and provide state-owned BAIC Group’s Foton unit with fuel-cell technology for buses. But before it could feel comfortable unveiling those plans, Toyota put in months of work to pledge fresh investment - in the United States.
“For Toyota to operate globally, we need to strike a fine balance between China and the United States,” the March 19 minutes quoted Toyoda as saying. “It’s imperative to avoid making enemies.”
Toyota feels the pressure to keep U.S. lawmakers happy as it attempts to push its growth focus toward China, where it needs to be more competitive with growth from companies like GM and Volkswagen, Reuters reports.
President Trump has threatened a 25 percent import tariff on foreign-made vehicles, and Toyota doesn’t want to be the company that motivates him to implement it. The company is actively advocating against any harsh trade tariffs between the two companies, releasing statements on its negative impact on the American consumer and workforce.
The company’s recent appeasement announcement for U.S. investment involved $749 million going toward domestic manufacturing capacity and job growth in an effort to show its commitment to its U.S. foundations.
It’s a smart strategy, but Toyota is just one pawn of many in what’s been a dangerous game between the U.S. and China ever since Trump took the White House.
The U.S. postal service will test autonomous mail carrying between two of its major hubs for a two-week pilot program, Automotive News reports:
The U.S. Postal Service, starting Tuesday, is partnering with autonomous truck company TuSimple on a two-week pilot project that will automate trips between distribution hubs in Dallas and Phoenix.
Three of TuSimple’s big rigs will make five round trips over two weeks, hauling trailers filled with mail and examining the potential of automated hauling mainly along Interstate 10, a linchpin of freight movement in the United States.
Though the two-person crews will adhere to hours-of-service limits during the project, switching drivers at various points during the 22-hour journey, the trucks will complete the 1,065-mile journey without much of a reprieve. That will allow the Postal Service and TuSimple to better understand operations on lengthy routes that cross jurisdictional boundaries at various times of day.
The company already has a fleet of 50 autonomous vehicles in the southwest designed to carry goods for contracted companies in states with few regulatory constraints, and the Postal Service is its first public partnership.
For now, the U.S. Postal Service has only committed to the pilot program, with a potential for a deal to be struck with TuSimple should it be successful.
GM’s mobility brand, Maven, is scaling back its car-sharing services in New York City, Chicago, and a few other markets based on a unspecified strategy shift, reports Automotive News:
In some markets, the brand will keep car-sharing services available for consumers while shuttering Maven Gig, which provides short-term leases for vehicles used in ride-hailing or delivery services. The opposite will be true in other markets, according to the spokeswoman. In some markets, both branches of the business will cease operations.
Maven car-sharing is available in 12 cities, while Maven Gig is available in 10. It wasn’t immediately clear whether operations will cease immediately.
The restructuring is the first major change for Maven since Julia Steyn, former head of Maven and GM Urban Mobility, left the company in January.
Based on a Maven spokesperson’s comments, it seems the company is shifting its focus to markets where there is promising demand for growth.
Ride-sharing in Los Angeles and Detroit will continue, but the rest of its future plans, like a strategy for growth, are still unclear.
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