Uber to open Michigan center for R&D

METRO DETROIT - Uber will open a new research center in metro Detroit by the end of this year to accommodate increased work with auto suppliers and other technology companies involved in autonomous vehicle development.

Sherif Marakby, Uber vice president for global vehicle development, announced the investment this morning at the SAE Convergence conference in Novi.

Uber has a large presence in Pittsburgh where last week it began operated about 20 fully autonomous Ford Fusion hybrids on its most heavily traveled routes in that city.

"We have having engineers come up to Detroit to meet with Tier 1 suppliers. We've also had discussions with automakers," said Marakby, who began working for Uber in April after 25 years at Ford. "What we're realizing is there is a huge critical mass of talent in the Detroit area."

He declined to say where the new center will be or how many people it will employ, but did he say it would open in a few months.

"We see this as a collaboration that is absolutely necessary for success, because Uber is not in the business of making cars, hardware or parts," Marakby said.

The Pittsburgh Post-Gazette reported today that Uber has partnered with public transportation agencies in St. Petersburg, Fa.; Philadelphia and the Research Triangle area of North Carolina who are interested in whether ride-sharing can boost use of public transit.

In Florida, the Pinellas Suncoast Transit Authority launched six-month trial last March during which the authority supplemented half the cost of an Uber rider’s trip up to $3 to or from a transit stop in a small, underserved part of its system.

While Uber's headquarters is in San Francisco, Pittsburgh has been a hub for its work on vehicles largely because of its partnership with Carnegie Mellon University which has a well-respected robotics program.

Asked whether Detroit might be the next city where Uber would initial automated service, Marakby said, "We're working with the state on that. We are very optimistic that we will launch in many areas that are open to us, including Michigan."

Later this year, the automated service in Pittsburgh will be expanded to about 100 vehicles, including some Volvo X90 plug-in hybrid SUVs.

Uber and the Swedish automaker are investing $150 million each to develop the next stage of their autonomous car strategies.

About 15 million Americans will use a ride-sharing or ride-hailing service this year, a figure projected to grow to more than 20 million by 2020, according to eMarketer.com, a research website that studies the sharing economy.

Marakby said Uber drivers, most of whom own or lease their own vehicles, are logging 1.2 million miles per month.

The company is still privately-held, and lost about $1.2 billion in the first half of this year, according to Bloomberg News, the growth rate has driven venture capital firms to estimates its value at $68 billion.

Much of the loss came from China where Uber recently turned its business over to rival Didi Chuxing, which gave Uber a 17.%% stake in its own business and $1 billion.

In January 2016 General Motors invested $500 million for a 9% stake in Uber's main U.S. competitor, Lyft.

Marakby touted a new service called Uber Pool that has been launched in about 30 cities. Uber Pool notifies two or more riders starting from nearby locations who are going to the same destination.

If they use the same vehicle they get a reduced fare. So far it is capturing about 20% of Uber's rides in those 30 cities, Marakby said.

Detroit Free Press


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