“Uber Has Apparently Ordered $10 Billion Worth of Autonomous Mercedes S-Class Sedans” Whoa, that’s a lot of clickbait. And it's just one of the 118,000 results that pop up when you Google “Uber Mercedes S Class,” and every single one of them is based on a single uncorroborated report published last Friday in Manager Magazin, a German site I’ve never heard of. The rumor seems crazy, of course, but its very specificity—not, "a whole bunch of luxury sedans," but "100,000 Mercedes-Benz S-Class sedans"—demands we pay attention. The story wouldn’t have spread so far so quickly if there wasn’t something there, and the more one steps back, the more there there is.

No one has done more to disrupt the taxi industry than Uber, and its first phase was to annihilate the relationship between taxi companies, drivers, and passengers. According to The Information, for the 3-month period ending June 30th, 2015, Uber spent approximately $1.6 billion on payments to drivers. That’s $1.6 billion on gross bookings of $2.1 billion. Phase 2 of disruption? Remove the drivers. Connect The Dots: Uber Imagine you’re Uber. You believe the legal barriers to fully Autonomous Cars will fall by 2020, after which there will be no difference between renting, sharing, and taxi services. Whomever owns the biggest market share on the day the great big Autonomy switch gets flipped will lay waste to the whole sector. Autonomy will be the icepick in the face of Hertz, Avis, and those comedians at Zipcar and Lyft. Currently, Uber has a lot going for it. The app. Users. Brand. Cash. Dominance across markets. All the company needs in that autonomous future is a manufacturing partner. Lyft has GM—big deal. Anyone can build mass-market cars. There’ll be no shortage of companies desperate to white-label an Uber-branded pod in the coming bloodbath. Maven? Hasn’t really launched, doesn’t take Amex, no users. Oh, GM’s Express Ride, that new program that rents cars to Lyft drivers? Remember that Uber has been helping drivers with financing since 2013.

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If you're Uber, it’s time to lock down the most profitable per-unit subset of your future inventory—the luxury Autonomous market—before anyone else sees what you see. You can't white label an S-Class: you need the world’s best fully autonomous sedan, from a company that’s going to last. So you call Daimler. Daimler won’t give you an exclusive? Too bad for them. There’s always BMW, Audi and Tesla. Model S sales are now bigger in Europe than the Audi A8 or BMW 7-series, slotting right behind the S-class. One of them will fold, and you’re pretty sure you know which one will be hurting by then. All those unemployed drivers? Give them some training and launch UberSecurity, which is a guy who just rides along in your UberBlack, just in case. Connect The Dots: Daimler You’re Daimler. You don’t don’t want to become the Foxconn of car makers. Uber wants 100,000 Autonomous S-Classes in 2020? That’s an entire year’s production, diverted into glorified taxis. You must preserve some exclusivity. Invest in capacity? Risky. Maybe we cut a deal to get some cheaper products into the Uber leasing pipeline, on a market-by-market basis.