Uber’s self-driving cars are a key to its path to profitability

The driver represents the single largest expense in non-autonomous ride-sharing at 80% of the total per mile cost, according to estimates by research firm Frost & Sullivan. By removing the driver from the equation, fully autonomous vehicles dramatically lower the cost of a ride while boosting its addressable market. Already offering software as a service, Uber plans to take the bet further by making the cost of rides so low (between its fleet of human and robot cars) that vehicle ownership becomes obsolete.

If done right Uber’s looking at a sizable slice of a very big pie. Realistic estimates for autonomous ride-hailing are still tough given regulatory hurdles. Yet, investment firm ARK’s research suggests that the 10-year net present value of this opportunity exceeds $1 trillion today and should hit $5 trillion by 2024 and $9 trillion by 2029. Of note, ARK is historically bullish on next generation technology bets, using the thesis to make investments.