Another autonomous taxi company that slows down its business vision

The self-driving taxi industry, once the darling of technological innovation, finds itself at a crossroads. The promise of a near future where the streets would be filled with driverless vehicles, transporting passengers with robotic efficiency, has run into the harsh reality of development much more complex and slower than anticipated.

The latest example of this downward trend is Motional, the joint company of Hyundai and Aptiv, which has announced an internal restructuring and in which Aptiv sells a significant part of its shares to Hyundai, thereby increasing the giant’s participation Korean car.

Motional, which has Hyundai cars (robotic Ionic 5 with 30 sensors) operating in Las Vegas and Los Angeles, had positioned itself as a major player in the sector, conducting tests and promising a near future of commercial services.

However, the recent restructuring, which has led to layoffs and a change in management, casts doubt on its roadmap. While specific details have not been made public, Hyundai’s increased involvement suggests a change in strategy and possibly a more conservative approach.

This news is not an isolated case. Several companies in the sector have recently announced staff cuts, paused projects or even complete closures. Autonomous vehicle startup Argo AI, backed by Ford and Volkswagen, closed its doors in 2022 after failing to attract more investment. Uber also sold its autonomous car development division, while Waymo, the Alphabet (Google) subsidiary, has had to adjust its plans and delay the launch of certain commercial services.

The question that arises is obvious: why does the autonomous taxi industry, which promised to revolutionize urban mobility, face so many obstacles? The reasons are multiple and complex:

. Immature Technology: Despite advances in artificial intelligence and sensors, the technology is not yet ready for mass deployment in complex urban environments. Autonomous driving requires a capacity for perception, decision-making and reaction to unforeseen events that has not yet reached perfection. Accidents, although rare, continue to occur, raising questions about the safety and reliability of the technology.

. Regulations and Legal Aspects: The lack of a clear and uniform regulatory framework at a global level generates uncertainty for companies. Accident liability, passenger data privacy and employment implications are just some of the legal challenges that need to be addressed.

. High Costs: Developing and deploying a fleet of autonomous taxis requires a gigantic investment. The sensors, mapping technology, artificial intelligence software and supporting infrastructure are extremely expensive, making the business model unprofitable in the short term.

. Public Acceptance: Public perception plays a critical role in the adoption of any disruptive technology. Despite initial appeal, public confidence in autonomous vehicles remains low. Concerns about the security, privacy, and ethics of artificial intelligence are important barriers that must be overcome.

In this context of uncertainty, Hyundai’s decision to increase its stake in Motional may seem contradictory. However, it could be interpreted as a long-term strategic bet. For traditional automakers, the autonomous car revolution represents both a threat and an opportunity.

Although the business model of the future is not yet defined, having a foot in that industry allows them to acquire knowledge, develop their own technologies and position themselves for a future where mobility will be very different from today.

Hyundai, with its experience in the mass production of vehicles and its growing investment in autonomous driving technologies, is betting on the electric car and on a future where cars will be more than simple means of transportation, becoming mobile platforms connected to an ecosystem broader range of services and experiences.

The vision of a future where streets are dominated by driverless vehicles is still distant, but it has not disappeared. It is possible that we will see a mixed scenario, where autonomous vehicles coexist with human drivers, especially in controlled environments such as university campuses, airports or very limited urban areas with low traffic density.

What is clear is that the autonomous taxi industry is in full transformation. Those companies that manage to adapt to this new reality, adjusting their expectations, optimizing their resources and building a solid value proposition, will be the ones with the best chance of success in a future where mobility will be increasingly autonomous, connected and shared.

The question is no longer if autonomous cars will arrive, but when and how they will be integrated into the complex ecosystem of urban mobility of the future.

And it seems that Hyundai wants to be in the leading group.