In the long run, Uber will cut 40,000 jobs in London

Uber is working on a driverless car network that could eventually replace all 40,000 Uber drivers in London.
In the future, the most expensive part of any transport system is likely to be the driver, according to an analysis by UBS.
Autonomous driving systems will become so cheap that some networks may offer them free, paid for by advertising.
Morgan Stanley believes 90% of factory jobs and 50% of office jobs will eventually be replaced by software and artificial intelligence.
Driving is dying. If you want a job in the future you must learn to code now.

uber patent autonomous vehicle communication configuration system LONDON — Since London's ban on Uber was proposed a few days ago, I have a had a series of arguments with friends and strangers over whether the ban is right or wrong. The debate has brought London alive — on some days it feels like the only issue anyone is talking about. Nearly 800,000 people signed a Change.org petition asking the government to save Uber. Forty-thousand jobs with Uber are at stake, and 3.5 million Londoners use Uber regularly. Twenty-thousand black cab drivers would love the ban to survive its legal challenge. Even prime minister Theresa May weighed in.

Everyone in the capital has a stake and an opinion.

Interestingly, almost all my discussions have ended up the same way, even when we vehemently disagree: "None of this will matter when they start using driverless cars anyway," one of us will say. And we both laugh politely, the way one does when you're trying not think about the fact that Uber is going to drop those 40,000 drivers in favour of an army of robots.

The most expensive part of driving is the human

Uber TFL The company is already working on its driverless future. On September 28 the company published a patent application for an "autonomous vehicle communication configuration system" that will allow a central command to monitor multiple vehicles, .

There is a relentless logic to it.

In a research note published by UBS on "the mass adoption of robotaxis" last week, analyst David Lesne and his team noted that in any transport system — private car, public transit, or Uber — the most expensive part is the person doing the driving.

Driving to work in a private car imposes an average daily commuting cost on the owner of €24 per day (about $24), UBS says. In a world of robotaxis, with no need to buy a car, that cost falls to €7.2 per day. "Getting rid of their private car would enable the shared mobility user to travel about 10,000km per year in a robotaxi and save €5,000 per year," UBS calculates:

"Robotaxis will likely price-compete with mass-transit systems. The shift towards electric autonomous vehicles, combined with more advanced fleet optimization and servicing platforms, next-generation traffic management and more intense competition, should reduce the fee charged to passengers of robotaxis by as much as 80% versus a ride-on-demand trip today. The technology to make robotaxis a reality is already available. In this new paradigm, owning a private car will cost almost twice as much as using robotaxis regularly."

That is an extraordinary thought: An Uber ride that costs £10 today — already roughly half the price of a back cab — might cost only £2 in a few years' time, UBS says. The cost of providing cars without drivers might be so small that companies could offer rides for free, UBS speculates, and make money on the advertising inside them.

That is a real problem if you're an Uber driver.

The smart money says that in the short-term Uber will successfully challenge the ban and reach a compromise that will allow it to operate without interruption. The real threat to Uber drivers comes from Uber itself, and its long-term plan to get rid of all drivers. (Former CEO Travis Kalanick told Business Insider this was the plan back in 2016.)

And it's not just 40,000 Uber drivers.

The scale of the jobs carnage will be vast

Any job that involves a human behind a wheel will be threatened in the next 20 years. Driverless technology is being developed by a dozen or more large tech companies, including Google (Alphabet) and possibly Apple in its Berlin lab.

Cost of robot v worker v outsourced worker The scale of the carnage in the jobs market will be vast. It's not just drivers. It is any job where artificial intelligence can do it cheaper than a human. The research team at Morgan Stanley sent a note to clients last week that calculated some of those savings (i.e. job losses):

Annual salary of a regulated financial institution IT operations worker in New York: $70-80,000.
Annual licence fee for a robot doing the equivalent work of up to five humans $8-11,000.

Morgan Stanley says 90% of factory jobs and 50% of office jobs are at risk of disappearing in Europe and the US:

"... not only the jobs with routine/repetitive tasks are at a high risk of automation (up to 90% we estimate) but AI also puts jobs involving cognitive skills at risk although the probability is lower at up to 40%. We estimate that 50% of the US/European white collar jobs (including office and clerical jobs) are at the risk of automation. We think it is unlikely that job losses would reach this level given that this is a long-term forecast (we assume only c.16% penetration by 2022) and new skills and jobs will be created over time. However, it is clear that some jobs will be permanently lost, which should impact staffing revenue and earnings growth."

What is to be done?

There is one growth area for jobs that pays a lot better than driving: Tech jobs. Specifically coding.

There is no unemployment in tech. Companies are desperate for qualified workers, and the world can't produce coders or engineers fast enough. Even entry-level coders can instantly enter the middle class. A random sample of the first page of London tech jobs on Indeed shows that minimum starting salaries are £45,000 ($60,000). Salaries escalate quickly from there. Highly qualified individuals with a few years expertise can name their price.

All these driverless cars, these fleets of autonomous vehicles — and anything else that uses tech, i.e. everything— will need people to write and manage software, in just the same way that every office that once had a typing pool now only employs people who know how to use email. In the future, being able to code will be as important as being able to read. (It might be more important, given that Siri and Alexa will be able to just read stuff to you without you looking at it.)

If the Uber ban — intended to begin this weekend — teaches us anything, it is that parents and schools need to teach their kids how to code software. In fact, I wouldn't wait for your kids' school to get its act together. If I were you, I would sit them in front of an online course as soon as you can.

Parents, teach your kids to code. Now.

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