After undertaking a year-long investigation with Ford and four other
mobility specialists on how to build self-driving systems that integrate
with London’s existing transport infrastructure, Addison Lee today is
announcing the next step in its autonomous strategy.
The on-demand ride company — which competes with black cabs, Uber and
other car services — announced a deal with self-driving startup Oxbotica
to develop autonomous vehicles, with the aim of getting them in service
in London by 2021.
No financial details are being revealed about the deal. Addison Lee CEO
Andy Boland, in an interview, described it as “purely commercial.”
Currently Addison Lee is “unfashionably profitable,” he added, and so it
is working on its current self-driving efforts off its own balance
sheet. It is also wholly owned by PE firm the Carlyle Group, so it’s
likely that this will help with future funding, although Boland did not
rule out that when the company gets closer to a commercial launch, that
it might need to look for funding to do this.
Meanwhile, Oxbotica — a spin-out from Oxford University — has raised
around $18 million to date, with backers including Oxford, Innovate UK,
the Ministry of Defence, the IP Group, insurers Axa XL and others.
The deal potentially sets up an interesting new avenue in how we might see autonomous cars being built, rolled out and operated.
Today, a number of transportation-on-demand companies that have roots in
the tech world (Uber, Didi and Yandex Taxi are three examples) are
trying to build their own self-driving tech. Alongside them, there are
also a plethora of car makers who are also intent on building and
running that experience.
Now, Addison Lee and Oxbotica are essentially presenting a third option:
a system not built by the car service-operator, and not by a car maker,
but by a third-party tech company that overlays the tech on top of
whatever vehicle the service provider chooses to have.
Oxbotica was the first company to get a green light to start any kind of
self-driving car test on a UK road, when it tested its equipment on a
modified Renault driving five miles per hour in the town of Milton
Keynes in 2016.
That early start was one of the reasons why Addison Lee decided to go with Oxbotica for its own efforts.
“The way they have built their technology and how they are already
provisioning it has been impressive,” said Boland. “They have the most
tangible capability that we could go with, and we felt that the way they
were thinking about it, the business model isn’t just for ride share or
car share, it’s across a range of other industry applications, and we
like that, too. It’s now getting serious, and real-life-scale operators
like Addison Lee are looking to bring this to market.” That would
include shuttle services but potentially other kinds of commercial
transportation (note that Oxbotica counts a commercial insurer as a
backer).
“This represents a huge leap towards bringing autonomous vehicles into
mainstream use on the streets of London, and eventually in cities across
the United Kingdom and beyond,” said Graeme Smith, CEO of Oxbotica, in a
statement. “Our partnership with Addison Lee Group represents another
milestone for the commercial deployment of our integrated autonomous
vehicle and fleet management software systems in complex urban transport
conditions. Together, we are taking a major step in delivering the
future of mobility.”
The two will start first with a comprehensive 3D mapping sweep before
moving on to other aspects of building the service to prepare a
autonomous vehicle service for trials.
For now Addison Lee has not named a vehicle partner, and Boland said that this was intentional.
The initial mapping exercise will be on the company’s existing fleet of
vehicles working on autonomous research around London today – those will
be the Fords from last year’s deal, he said. “But in terms of future
service provision in 2021, that decision is yet to be made. Oxbotica is
agnostic to manufacturers, and that was also interesting to us at the
moment.”
Although Addison Lee competes with the likes of Uber — which had to
appeal for a provisional 15-month right to operate in London after
initially losing its license — it is different in that it owns its own
fleet of vehicles. That has given the company more of an incentive to
try to develop its own technology that it might use across whatever
vehicles it chooses to use in its fleet. It’s not clear how this will
work alongside the fact that many car makers are also working on their
own autonomous technology and subsequent strategy to “own” the
self-driving experience — at some point they might even directly
conflict — but for now following this route could be Addison Lee’s
strongest bet for continuing to keep a close service for its drivers and
its fleet, developing it in the way it feels is best for its own
business.
“It’s about having a bit more control between us,” Boland said of the
deal with Oxbotica, ” and creating and building those services together
without the dependencies without the changing priorities of an OEM. So
that we can do what we need to do.”
The self-driving car market is expected to be worth some £28 billion in
the UK alone by 2035, and car services — versus private ownership — are
shaping up to be a large part of how it might play out. Startups like
FiveAI are also focusing on building self-driving car systems,
specifically so that they can run in their own fleets of vehicles and in
a service run by FiveAI: its reasoning is that autonomous vehicles will
be too cost prohibitive to own for the majority of people.
As car ownership is predicted to decline as cars become ever-more
sophisticated and expensive, car services are already on the rise and
are predicted to grow some 21 per cent by 2030.
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