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

the driving force behind one of

America's most influential companies.

Record high today for Uber. 100% up last

year. Whimo and Uber have announced a

partnership. When you have a CEO that's

done what DAR has done, you set the bar

higher and higher.

>> The impact we have on society is

significant. We hope to keep building on

that impact going forward and I'm quite

optimistic about what the future's going

to bring.

Ladies and gentlemen, please welcome

Uber CEO Darra Kazer Shahi.

>> Good see.

>> All right,

>> Dar, I wasn't sure if you were aware,

but I was an early investor in Uber.

You

>> I've heard you say it once or twice,

>> and I'm curious how my investment's

doing.

I don't know. Okay. Based on today,

>> today's looking pretty good. Um, so,

uh, autonomy is the discussion I think

everybody wants to have in the timeline.

>> How many partners

>> does Uber have in autonomy today?

>> So, we have over 20 partners across both

mobility and the delivery business. Uh,

I'd say mobility now is in the field as

we speak. Obviously, we've got a

partnership with Whimo, who is uh I

think the best of the best in Atlanta

and Austin. Uh but there are a number of

other players that we are partnered

with. A number of Chinese players,

Autonomy in China is uh hitting the big

time and a lot of these companies that

want to expand outside of China, we're

partnering with. And then in the US, uh

even in in the second half of this year,

uh we will have a couple of partnerships

kind of hit the road in Texas. uh and

then in Europe and the rest of the

world. So you will see we've announced a

bunch of partnerships. We're doing a ton

of work with these partners. You'll see

these cars hit the road with safety

drivers eventually and the safety

drivers will come out this year and

especially going into next year. We're

going to have significant number of cars

on the road.

>> How many people in China have level four

no safety driver today? And what's your

assessment of those companies and their

safety record? You know, it's a

different market obviously. So there are

uh bu uh wery pony are all on the road

today. No safety driver. We are partners

with all of them. Their capabilities are

amazing. You can imagine driving in

China in these big cities is quite a

complex uh undertaking. Uh they take

safety just as seriously as uh the

western companies do. So I think their

safety record is excellent. Ultimately,

we think autonomous can be both

superhuman in terms of safety and can

save uh millions of lives over the

course of time on the road and over a

period of time as the cost of especially

the hardware stack comes down. We think

that it can bring the cost of mobility

down and make mobility on demand

available to many many more people than

it is now. So, it's going to be a very

big kind of market expander for us. So

that was the debate, Dar, that maybe

kind of exploded a little bit on X

between you and Elon where you guys I

mean very respectfully just debating the

pros and the cons. Maybe just set it up

for the folks in the audience the

difference between um Elon's approach

and the Whimo approach and maybe the the

relative pros and cons as you see it.

>> Yeah. I mean I think they're the ones

building the cars. So I'm to some extent

a very very very interested bystander.

But but the way that that I put it is um

Elon's approach

uh depends on excellent software

>> right

>> to do a bunch of the heavy lifting in

that there are some you know early on

whenever you're building product there

may be some cheat codes that you

undertake. So for example, you could

call it uh cheat codes or you know good

engineering. Some of the things you see

in early systems is one is uh camera uh

radar LAR. So multiple

>> sensors

>> uh sensors redundancy on the sensor

stack to make sure that your perception

algos are seeing the world as it really

is. Uh Elon is doing camera only. Uh

tougher on the software, cheaper for the

hardware. Okay. Second, I would say big

difference is many of the players use HD

maps. And what HD maps do is is

essentially you map out an area so that

it's much easier for the software to

determine what are permanent aspects of

a certain view. You know, the uh the

lines on the road, uh traffic lights,

etc. Because of the HD maps, it's very

very easy for that piece of software to

determine what's permanent and then

what's impermanent, vehicles, people,

etc. So, it makes the job of the

software much easier to figure out

what's going on and then and then

determine what to do. Uh Elon's approach

doesn't depend on HD maps. Uh and again,

it makes a Java solver harder. And then

the other I would say significant

um uh factor is the compute. So when you

look at the compute and many of the

other players the compute in terms of

flops and memory etc in the back of the

card uh car is pretty expensive pretty

extensive

uh and I think Tesla's approach is with

a much tighter compute stack. Do you see

a world where you try to pour your

distribution into all those solutions

assuming that everybody's amendable to

working with you and it meets your

threshold for what you're looking for?

>> Yeah, I think safety or cost or

>> exactly I'd say safety comes number one.

So we have a certain safety case that we

want to make sure that our partners

adhere to or exceed

>> and sorry just is that an eval or is

that like is that certain rates that

they have to publish to you or how do

they demonstrate to you? It's it's the

technical approach and the eval

together. And listen, it is a dialogue,

right? Because different people take

different approaches to safety. We want

to make sure that showing up on the Uber

platform, it is as safe as it can be.

And our def definition of safety is

multiple site times safer than a human

being, which is achievable. Whimo is

showing that it's achievable. Many of

the Chinese players are showing that

that it's achievable as well. So if it

meets our safety criteria and the

economics are attractive and the

economics as the cost of hardware comes

down, you know, LAR was 20 30,000 bucks

a pop like 5 6 years ago. Now solid

state LAR is 300 to 500 bucks a pop. So

the cost of hardware is coming way down.

It is going to need to continue to come

down because these cars are very

expensive. Then we'll do business with

them. We we want to be the platform and

and we want to essentially help the

entire AV ecosystem thrive and we think

there's enough economics

uh for the network player to have a

great business and uh the software

providers and the vehicle owners to have

a great business. And then obviously

there's fleet operations in terms of

housing the cars, recharging the cars,

you know, all of the um kind of in the

world uh work that's necessary as well.

>> When you you're going to get to a

tipping point, I'm going to assume in

driver miles, let's say, where one of

the most interesting things that I've

thought of is

could you tell a city how it should

actually be designed for optimal

traffic? So we work I wouldn't say for

optimal traffic

I think theoretically it's possible but

you know

something a Google could there are lots

of other players

>> uh who can help with that

>> but we're certainly helping cities in

terms of uh where you should put

charging infrastructure for example uh

parking drop offs etc uh to help traffic

flows I think we can be a partner for

cities and we do have a small operation

where essentially we offer data a for

free for cities to embark on city

planning so to speak.

>> Do they take it? They don't.

>> Some do. Some do. Some of the more

sophisticated cities take it, but I

wouldn't call it a big part of our

business.

>> So, Dar, I want to ask you about the uh

the business model impact of um of

basically robo taxis or self-driving. In

the old world, um, uh, Uber's network

effect was a marketplace effect where

you connected drivers and riders. And if

you had the most geographic density in

an area, then you could promise riders

faster pickups and the drivers got

higher utilization. And that was a very

powerful network effect. But we're

moving into a new world where anyone who

has a fleet of self-driving cars in

theory could just make them available to

the public and start competing. How do

you see that impacting your mode? And

and do you have to go from being an

asset light business to now owning all

these these cars and deploying them? And

is that a good thing or a bad thing for

your business?

>> So this I think that the same economics

apply, right? Which is if we have uh

that fleet owner um is not going to have

as many vehicles available in a certain

market than let's say a network uh like

ours and we will have a hybrid network.

We're going to have humans and

autonomous cars together and that's

going to continue for a while. You know,

the the autonomous the machines are

going to aren't going to replace all

humans at least for the f for Zipil

future. So for us um if you're part of

our network, you are going to get more

requests than the player who's doing a

standalone because we already have the

demand. The request is going to come

from much closer. So instead of, you

know, a pickup who's 15 minutes away for

a 10-minute ride, you're going to get a

pickup that's 3 minutes away for a

10-minute ride. So the utilization in

terms of the revenue generating miles as

a percentage of total miles driven is

much much higher on on our network. So

the player that you know if you have

fleet player A who's going direct

standalone fleet player B who's working

with us fleet player B will have much

more business will have many more miles

that are that are creating revenue as a

percentage of the total miles driven and

as a result each of their cars are going

to get much more revenue per car per day

than than the fleet player who isn't

working with us. So I mean that

ultimately is you know even if you if

you think about Uber Eats right there's

this drama which is hey do you go direct

only or do you work with a marketplace

and the fact is every major food player

McDonald's has a direct channel but they

have a box and they want that box to

create as much revenue as possible so

they have a direct channel and they work

through our marketplace Door Dash

marketplace other marketplaces as well

because that's how you drive

utilization.

And so I think that most of these

players, there are going to be some

players like a Whimo, like a Tesla who

can build their direct channel, but we

think if they want to drive maximum

economics out of these really expensive

cars for now, they're going to also want

to work with us.

>> Do you think you will need to buy and

deploy your own fleets or can you rely

purely on third party fleet owners? So I

think that um there's going to

ultimately if you look at the end state

I think all of these cars are going to

be financable. So if you look again in

the hotel business I used to be in the

travel business a Hilton or a Marriott

who's the brand doesn't own any of their

hotels. Those hotels are owned by

financial only players. And I think 10

years down the line you know there are

these things called REITs real estate

investment trusts. You're going to have

fleets. You're going to have financial

owners that own big fleets of cars that

are on our network, maybe on other

networks.

>> The new the new enterprise kind of a

thing.

>> I'd say it's going to be more financial

players. So, it's not, you know, Hertz

and uh enterprise are operators. These

these are going to be like pure stones

of of the world and they own fleets and

they're just trying to monetize those

fleets as much as possible. That's the

end state. Between now and the end

state, we will take balance sheet risk

because we can sign up. We know exactly

how much revenue a car can produce in

said market because that because cars

are already producing revenue. So we can

sign up for the revenue. We will prove

out the business model. We'll use our

business we'll use our balance sheet to

prove out the business model and then at

some point the whole thing is going to

get financialized and we'll be able to

take it off balance sheet.

>> Is is Whimo willing to work with you?

actually Whimo is working with us now in

Austin and Atlanta.

>> Okay.

>> So, in Austin, Atlanta, if you're using

Uber, uh you can be picked up uh with a

Whimo. Our customers love it.

>> Uh is it the driverless aspect of it

that they love or

>> you know, they're so I think I think one

is they're new cars. They're really nice

cars.

>> Yeah.

>> Um it's kind of freaking cool.

>> Yeah.

>> Uh and you do have privacy in that car

as well. So I think the combination of

it works out really well. We see

customers who experience the product,

they rate it really high highly, they

use it again. Uh and so it's just it's

just an absolute

dynamic product.

>> So we've we've mostly only spoken about

the XY axis

>> and we have a couple of our friends

who've built businesses that are, you

know, trying to launch these EV tall

businesses,

>> some of our other friends who are

experimenting with small drone delivery.

tell us where all of those things play

in your infrastructure going forward.

>> So we're we're absolutely believer in uh

EV tall. We're an investor in Joby uh

and we are going to work with them as

those vehicles become available. We know

that there are some other vehicles but I

think that the kind of Z uh axis if you

if you want to call that makes a ton of

sense. Listen in cities of the world

essentially they have built in the third

dimension because there's only so much

that you can expand you know in the x

and y dimension. So businesses have

expanded in third dimension uh

residences have expanded in the third

dimension but our transportation

uh uh infrastructure has only expanded

in two dimensions.

>> So it's no wonder that traffic just

keeps getting worse and worse and worse

because that third dimension is isn't

available. So we are absolutely

believers in uh both EV talls uh and

drone delivery. Now I think on the

delivery side that there are two areas

that we're working on. One is sidewalk

robots. It's easier tech to develop.

>> Explain what that is. A sidewalk robot.

>> So sidewalk robots um there are some of

them in LA and Santa Monica. They are

autonomous vehicles that uh drive on the

sidewalks. They drive pretty slowly.

They're very, very safe. Uh they look

kind of cute. Uh and they're appropriate

for deliveries that are a mile or less

uh long. So deliveries in a tight space.

And so there's a certain addressable

market for us in deliveries where those

sidewalk robots work. And we're working

with Serve, Cardan, and number of other

players in the US, in Japan, in a number

of other markets. Then on the other side

is drone delivery. and drone delivery is

appropriate for markets where, you know,

they're more spread out, suburban, no

highrises, etc. Those two together we

think can cover 50 plus% of our delivery

uh TAM so to speak. But then there's

another 50% that we're going to have to

work on in terms of the first and the

last mile, you know, coming out of the

restaurant and then getting the the food

into your apartment as well. Humans take

care of their own first and last mile,

but you need something to take care of

the first and last mile of the food.

That's where the challenge is going to

come in. And we're working with a number

of players to see how we can get that

first and last mile for food.

>> I want to talk to you for a minute, if I

may, about the balance sheet. Um, one of

the great,

>> you know, sort of early uh insights we

had at Uber was around profitability and

the press and the narrative was, "Oh,

Uber could never be profitable." And I

would talk to TK about it and and and

William and all the Josh in New York and

they're like, "Yeah, we could flip it at

any moment in time to $2 more a ride. We

would lose no rides and it would be

wildly profitable." And in fact, under

your stewardship, Uber has become a

money printing machine to the point at

which you announced a $20 billion stock

buyback.

>> Yes.

>> And I saw it and I said, "Wow, this is

just incredible." However,

>> did you tweet about it by chance?

>> I might have. I might once in a while

I'll retweet you and and give you a

little shine. Um, but I did have this

thought that

um, and I had Chris from Neuro on the

program and you have this great

partnership to put 20,000 Lucids on the

road. Um,

>> what wrong podcast, but keep going.

>> The other podcast. Um,

>> and so I'm wondering how you think about

the war chest, the money printing

machine and deployment of that asset.

How do you decide $20 billion stock

buyback versus putting 300 million into

Nuro or we had Travis on the podcast and

he said um he's had many opportunities

to look at things like Pony which has

been in the press and um it would be

pretty great to have the original

founder maybe I don't know you've got a

couple of billion laying around and

maybe help him have Pony come to the

west so how do you think about deploying

that capital in order to you know

continue to grow from Where are we at?

1% of rides globally are ride sharing

approximately

>> a little more, but it's between 1 and

2%. It's a very low number.

>> It's clear it's going to go to 20 with

autonomy. And so if we all believe that

and that's obvious,

>> is that the best use of the capital? How

do you make that decision?

>> So I I think the good news for us is

it's not either or. We can walk and chew

gum at the same time. Uh in the past 12

months, we've had over 8.5 billion of

cash flow. the business is growing you

know top line 18% bottom line 35%. So

that cash flow is going to grow by a lot

over the next 3 to 5 years and we

announced the 20 billion buyback because

in looking forward to areas in which we

could invest aggressively for example in

AV because we should because it's an

enormous opportunity whether it's

vehicles or fleets etc. We are very

comfortable that we've got enough uh

capital to be super aggressive there

appropriately and at the same time buy

back our stock. There's a great company

we know of. Uh management team can get a

little better but they're okay and we

think it's a great deal. So it's not

it's not an either or. It's it's it's an

and for us and we're lucky to be in that

position at this point.

>> You um have a very big business in Uber

Eatats. Um

>> it competes with folks like Door Dash.

Mhm.

>> When Travis was on the pod a few weeks

ago, maybe a month ago,

>> he he talked about sort of the

robotization of food and all of that.

Can you just talk to us about your

vision of where all of that stuff goes

to? And

>> so, we're we actually work with Travis

uh and his cloud kitchens business. He's

also built a a restaurant tech business

in in Otter as well. And I do think that

you are, you know, any food business

that is not deep in delivery is going to

lose share period for the foreseeable

future. So every single player, food

player, grocery player, even now retail

player has to get into delivery and has

to get into on demand delivery.

Otherwise, they're kind of missing the

most attractive segment of of consumers

out there. Uh and I think as the cost of

labor is going up um all of these

businesses are building are uh investing

increasingly in roboticization. It's not

something that we are getting into but

as more food healthy food delicious food

becomes more available lower prices then

our delivery business kind of will

benefit a lot. I'm hearing consistently

from you and you can just tell me if

this this is wrong that you are becoming

increasingly an asset light highly

liquid distribution network like you

have this incredible network effect. You

have these hundreds of millions maybe

approaching a billion users and you can

just pour them into all of these things.

We we are essentially we bring demand to

the assets that are driving the movement

of people and things and food and

grocery and these are all asset heavy

businesses. So the next incremental

piece of demand that comes from our

network is incredibly valuable for them

and we can do so staying largely capital

light at the same time to the extent

that I can use my capital to invest in

the AV ecosystem or fleets etc. We can

also do that.

>> There's one company that wants to go on

go on its own. A friend of ours runs it.

Um I'm think that you probably have had

some conversations obviously publicly

you have. What's the best pitch to Elon

to put a 100,000 robo taxis into the

Uber fleet while still doing his own

because his app is doing spectacularly

well and the and the pilots are doing

well so he'll obviously figure it out.

But what's your best pitch to him to

joining the Uber network? Uh I think

listen the the pitch is simple which is

if you're looking to maximize the

revenue of those robo taxis

>> today

>> uh today we are your ticket to the

maximization of that revenue to the

extent that you're looking to have these

fleets owned by people you know kind of

the digital shepherds which is is an

amazing vision that that Elon has to the

extent that those uh owners are not able

to monetize their assets on the Uber

network they will under monetize and if

there's a competitor who is offering

those vehicles to be on the Uber

network, the monetization of those

vehicles are going to be superior and

those digital shepherds are going to go

elsewhere. So I think that is the pitch

and again Elon is you know he kind of

believes in full stack.

>> Yes. um and he's proven it and and I

think that this market is large enough

for there to be multiple winners but in

the end to the extent that you know we

would love to partner with them

>> uh but at this point they're looking to

go it alone and I think the market is

large enough to carry a number of

winners in this

>> I see a tough question about uh humans I

was talking to Will Barnes who ran um

originally in Los Angeles and then half

of the country for for Travis

>> and uh Will Barnes had a pretty amazing

insight which Because in the early days,

we had humans protesting humans

competing for, you know, the taxi

drivers versus the ride share drivers.

Um, in China, in Wuhan, in fact, there's

been a lot of civil unrest. And they're

talking about limiting the number of

licenses for self-driving cars because

of the disruption that would happen if

young men who have those jobs are not

able to have a job. And we saw the

Whimos get called to their death here in

Los Angeles. And that was a pretty clear

message as well. How do you think about

that group of people losing their jobs?

These drivers who built the Uber

network, who built Lyft, who built Door

Dash and China's overwhelming concern

about this um because these are robots

taking human jobs and there's an you

know there there's a lot of discussion

about this and I think maybe in the tech

industry we don't talk about it headon.

>> I think listen this is it's a big issue

for AI in general and uh job

displacement. You see it with younger

graduates as well. I think for us at

least for the next 5 years uh the number

of robot cars coming onto the platform

are not going to be displacing people

because the platform is just growing so

quickly that we can very easily take

that take that demand and and there is a

natural turnover of our driver base. So

in a market like in Austin uh or other

markets in which we're launching uh uh

autonomous we will turn down the driver

recruitment uh machine so the robots can

come in and the drivers who are

currently driving in the platform can

make as much money. So Austin drivers

now are making as much or more money

than they were before we introduced

Whimo. So I think for the next 5 to

seven years we're we're going to have

more human drivers and delivery people

just because we're going so quickly. But

I think you know 10 to 15 years from now

this is going to be a real issue. And

Jason I don't have a neat answer for it.

Now we're finding like other kinds of

work. We've got uh drivers and couriers

uh you know uh labeling AI labels and

looking uh you know uh we have a whole

Uber AI solutions business. So we're

essentially one way to look at Uber is

we are a platform for work and

transportation is the first kind of work

and now we're expanding into other kinds

of ondemand work as well to uh be able

to adjust the kind of work available to

people who uh want to earn our own

platform. But I think longterm this is a

big big societal question that we're

going to have to struggle with and lots

of others are going to struggle with

too.

>> Absolutely.

>> All right. Thank you very much.

>> Thank you. really appreciate it.

>> Great.

Crushed it. Thank you, my brother.