Volkswagen to Enter Autonomous Ride-Hailing Market in 2024 with Collaborative Strategy

Volkswagen, the German carmaker, is set to enter the autonomous ride-hailing market next year with its Volkswagen ID. Buzz AD. Unlike other competitors, Volkswagen aims to collaborate with existing transportation providers rather than compete against them. This strategy comes in response to the growing public resentment towards robotaxis, which have faced resistance and sabotage from residents in cities like San Francisco and Los Angeles.

Volkswagen's approach is to act as a partner that builds upon existing infrastructure, aiming to be a service provider whose presence is desired because it does not compete with systems already in place. The company revealed the series production version of its autonomous ride-hailing cab based on its retro-styled VW ID. Buzz EV microbus. This vehicle, along with the necessary fleet management software and digital customer booking platform, is designed to offer local transportation authorities and commercial fleets a turnkey solution that can be easily integrated into their services.

Volkswagen believes that the market for autonomous ride-hailing services is large enough to accommodate multiple players. The company is convinced that there will be more than enough demand to capture a significant share of the €350 billion-€450 billion in revenue projected for autonomous ride-hailing services in North America and Europe by 2035. This potential growth is seen as an opportunity for Volkswagen to establish itself in the market.

Volkswagen's strategy involves partnering with public transit authorities, leveraging their extensive and well-built mass transit networks. This approach is influenced by the company's European roots, where public transit authorities play a crucial role in urban mobility. For example, the BVG authority in Berlin, which serves three million people daily, has already signed a letter of intent with Volkswagen. A BVG-branded robotaxi integrated into its service is expected to see faster adoption than if Volkswagen were to compete alongside it.

Volkswagen's partnership approach is a natural fit for automakers, who have decades of experience working closely with regulators to ensure their cars conform with traffic safety and environmental standards. In contrast, Silicon Valley companies often view regulators with suspicion, as seen in the debacle around robotaxi developer Cruise. Following an accident in San Francisco, Cruise withheld crucial information from crash investigators, leading to reputational damage and the cessation of its operations.

With competitors like Waymo and Tesla having a head start, Volkswagen acknowledges the challenge but believes there is still an opportunity. Waymo has an indisputable lead, and Tesla is gearing up to launch its own pilot in Austin. However, neither company is present in Europe, a market known for being risk-averse towards unproven technologies. This offers Volkswagen the chance to greenlight the production of at least 10,000 robotaxi vehicles. Even if Waymo and Tesla retain their lead, Volkswagen believes communities will demand healthy competition among autonomous ride-hailing providers to ensure an optimum service at a low cost.

Volkswagen's strategy is based on the belief that the market for autonomous ride-hailing services will not be a winner-takes-all scenario. The company aims to be an equal partner working hand in glove with communities that want their help, rather than competing against existing providers. This approach is seen as a way to ensure social acceptance and to build a sustainable business model in the autonomous ride-hailing market.