Interview, Fireside Chat
Uber CEO Dara Khosrowshahi on self-driving's future, changing business model, job displacement
- Dara Khazarshahi expresses optimism regarding Uber's societal impact and anticipates significant partnerships with Chinese players expanding globally, alongside specific deployments in Texas during the second half of the current year and further expansion in Europe and other regions.
- Safety drivers are expected to appear on roads soon and will be present in significant numbers going into next year, maintaining a hybrid network with autonomous vehicles for the foreseeable future as machines are not predicted to replace humans entirely in the near term.
- The company aims to achieve safety levels multiple times greater than human drivers, eventually becoming "superhuman," while anticipating that hardware cost reductions will lower overall mobility expenses and expand access to a broader population.
- Economic models for autonomous vehicles are projected to be most attractive when hardware costs drop, with Uber intending to partner with all fleet operators, including those with direct channels like Waymo or Tesla, to maximize asset utilization and revenue per car.
- Uber foresees a long-term shift where financial entities like REITs or Blackstone own fleets rather than operators like Hertz, a transition expected to take approximately 10 years, with Uber initially absorbing balance sheet risk before offloading it once the model is proven.
- The company plans to collaborate with Joby and other eVTOL investors as these vehicles become available, projecting that electric vertical take-off and landing aircraft and drone delivery will capture over 50% of the delivery Total Addressable Market (TAM).
- Sidewalk robots are deemed suitable for deliveries under a mile in dense urban areas like Los Angeles and Santa Monica, while drones are targeted at suburban markets, with the remaining 50% of the market expected to require solutions for first and last-mile challenges.
- Financial outlooks indicate cash flow growth over the next three to five years, enabling aggressive investment in autonomous vehicles alongside a $20 billion stock buyback program.
- The delivery business is expected to grow as roboticization increases food availability at lower prices, with Uber urging every food, grocery, and retail player to adopt on-demand delivery to avoid losing market share.
- Driver recruitment is projected to continue for the next five to seven years due to rapid platform growth, with the company planning to scale back recruitment in specific markets upon autonomous vehicle launch to maintain driver earnings, while anticipating job displacement as a significant issue 10 to 15 years out.
- To mitigate future societal job displacement, Uber intends to expand its work platform into various on-demand sectors beyond transportation, emphasizing that its network remains the critical vehicle for maximizing revenue for any robo-taxi fleet.
- Digital fleet owners are expected to remain with Uber or move to competitors based on superior monetization capabilities, reinforcing the necessity of the Uber network for maximizing asset economics in the autonomous era.