Uber CEO Dara Khosrowshahi on self-driving's future, changing business model, job displacement

Uber CEO Dara Khosrowshahi details Uber's strategy to integrate autonomous vehicles and other advanced logistics into its existing network, aiming for enhanced safety, reduced costs, and expanded service, while addressing the long-term societal impact of job displacement.

• Uber is rapidly integrating autonomous vehicles into its network through extensive partnerships, prioritizing safety and cost efficiency.

• The business model is shifting towards an asset-light distribution network, optimizing utilization for third-party AV and robotic fleets.

• Uber acknowledges and is preparing for long-term job displacement, managing it by adjusting recruitment and exploring new work opportunities for drivers.

Uber is actively partnering with over 20 companies in the autonomous vehicle (AV) space globally, including Waymo and Chinese players like Baidu and WeRide, to deploy self-driving cars on its platform, with a primary focus on safety and cost reduction. The company's business model is evolving to remain a capital-light distribution network, leveraging its strong demand to maximize the utilization and revenue for third-party AV fleets and other delivery services like eVTOLs and sidewalk robots. While acknowledging the potential for job displacement, Uber aims to manage this transition by slowing driver recruitment in AV-active markets and exploring alternative work opportunities within its platform.

Autonomous Vehicle Strategy

• 00:00:59 Uber is partnering with over 20 companies in the autonomous vehicle (AV) space for both mobility and delivery, with deployments in Atlanta, Austin, and soon Texas, Europe, and China. Uber works with leading Chinese AV companies like Baidu, WeRide, and Pony, assessing their capabilities as 'amazing' given the complexity of driving in large Chinese cities. The company believes AVs can achieve 'superhuman' safety and significantly reduce mobility costs, expanding on-demand services to a wider population, and aims to be the platform that helps the entire AV ecosystem thrive.

AV Technology Approaches

• 00:03:19 Two main approaches to autonomous driving exist: Waymo's and Tesla's (Elon Musk's). Waymo's approach uses multiple sensors (camera, radar, lidar) for redundancy and relies on HD maps that pre-map areas, making software's job easier to distinguish permanent from impermanent objects. Tesla's approach, conversely, is camera-only, does not depend on HD maps, and utilizes a tighter compute stack, making the software's task harder but potentially cheaper for hardware. Uber prioritizes partners who meet or exceed a safety standard of being multiple times safer than a human driver, which Waymo and many Chinese players have demonstrated is achievable.

Evolving Business Model

• 00:08:29 Uber's business model is adapting from a human-driver marketplace to an integrated network that incorporates self-driving cars without becoming asset-heavy. The company asserts that its network provides higher utilization for AV fleets due to existing demand and closer pickups, leading to more revenue-generating miles per car compared to standalone operators. Uber envisions an end-state where financial players, akin to 'REITs for fleets,' own the cars, with Uber providing the network; in the interim, Uber is prepared to take balance sheet risk to prove the business model and attract financial investment.

Expansion into New Logistics

• 00:13:30 Uber is investing in the 'Z-axis' of transportation, believing it is essential for urban expansion beyond two dimensions. The company is an investor in Joby for eVTOLs (electric vertical takeoff and landing vehicles) and is exploring drone delivery, which is suitable for spread-out suburban areas. For shorter deliveries, Uber is working with companies like Serve Robotics on 'sidewalk robots' for last-mile delivery. These robotic solutions are projected to cover 50% of the delivery total addressable market (TAM), with the remaining 50% requiring innovation for the 'first and last mile' challenges, like getting food from a restaurant into an apartment.

Addressing Job Displacement

• 00:22:31 The displacement of human drivers by autonomous technology is a significant societal concern, with unrest already observed in places like Wuhan, China. For the next five to seven years, Uber expects its platform's rapid growth will accommodate both human drivers and incoming robot cars without mass displacement, managing the transition by adjusting driver recruitment in AV-active markets. In Austin, for example, drivers are making as much or more money after Waymo's introduction. Long-term (10-15 years), job displacement is recognized as a major issue for which Uber, through its 'Uber AI solutions' business, is exploring alternative on-demand work opportunities like AI labeling for its current driver and courier base, but it acknowledges no 'neat answer' for the broader societal question.