The partnership will allow Uber riders to choose a Cruise autonomous vehicle when planning their trip. Reuters
The partnership will allow Uber riders to choose a Cruise autonomous vehicle when planning their trip. Reuters

Uber to begin offering option of self-driving Cruise cars



Cruise robotaxis are joining Uber's ride-hailing service next year as part of a multiyear partnership, bringing together two companies that once appeared poised to compete for passengers.

The partnership will allow Uber riders to choose a Cruise autonomous vehicle when planning their trip.

Uber has been offering driverless cars in Phoenix, Arizona, on its platform since October last year through an agreement with Alphabet's Waymo.

The latest partnership with Cruise comes as Tesla chief executive Elon Musk is set to unveil delayed plans for a robotaxi product in October, amid slowing demand for electric vehicles.

The alliance is the latest change in direction for Cruise since its Californian licence to provide driverless rides was suspended in October 2023 after one of its robotaxis dragged a jaywalking pedestrian who had been struck by a human-driven car across a darkened San Francisco street.

The incident led to regulatory inquiries into Cruise and prompted its corporate parent, car maker General Motors, to moderate its ambitions in autonomous driving.

GM had envisioned Cruise generating $1 billion in annual revenue by 2025 as its robotaxis steadily expanded beyond San Francisco to offer a driverless alternative to the ride-hailing services operated by Uber and Lyft.

But now GM and Cruise are looking to make money by mixing the robotaxis with Uber's human-driven cars, giving passengers the option to ask for an autonomous ride.

Cruise is operating Chevy Bolts autonomously in Phoenix and Dallas, with humans sitting behind the wheel ready to take over if anything goes wrong.

The Uber deal underscores Cruise's determination to get back to the point where its robotaxis ride the roads entirely on their own.

“Cruise is on a mission to leverage driverless technology to create safer streets and redefine urban life,” said Cruise chief executive Marc Whitten.

GM also laid off hundreds of employees after losing the Californian licence as part of its financial measures after sustaining $5.8 billion in losses on the robotaxi service from 2021 to 2023.

Despite Cruise's recent woes, Uber chief executive Dara Khosrowshahi expressed confidence the ride-hailing service could out the robotaxis back on the right track.

“We believe Uber can play an important role in helping to safely and reliably introduce autonomous technology to consumers and cities around the world,” Mr Khosrowshahi said.

Shares of GM rose more than 1 per cent in extended trading on Thursday, while Uber Uber shares fell as much as 4.4 per cent.

Meanwhile, Cruise on Thursday agreed to recall nearly 1,200 robotaxis over hard braking problems, the US vehicle safety regulator said, agreeing to close an investigation into the issue.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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COMPANY PROFILE
Name: ARDH Collective
Based: Dubai
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Sector: Sustainability
Total funding: Self funded
Number of employees: 4
COMPANY%20PROFILE
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Updated: August 22, 2024, 9:15 PM