Uber CEO on Winning the Robotaxi Race, the End of Car Ownership, and Uber’s Next $1 Trillion Bet | Dara Khosrowshahi (Uber CEO) | 243

0:00The robo-taxi race is heating up. How are you going to win that race? Well, when you joined taking the mantle of Uber, I think Uber was losing$4.5 billion a year. Today, it's earning over$10 billion a year. You really focus the organization. Autonomous technology and autonomous vehicles, they are increasingly a reality on the streets. As we speak, there isn't going to be this kind of binary outcome. It's going to develop in a hybrid way. And you are going to have fleets in cities that consist of some autonomous vehicles and then many human-driven vehicles as well. A hundred years ago, we had this massive shift from horse and buggy to cars.

0:42And it took about 15 years to make the transition where 50 % of the vehicles were cars. How long do you expect that transition to take where 50 % of the cars are self-driving cars? uh now that's the moonshot ladies and gentlemen quite the greeting wow yeah uh the energy is awesome and and you deserve it pal first of all you look amazing thank you very much staying in good health yes trying excellent well looks so far so good i mean the biggest challenge we have is uh stress levels and way too much travel. So, you know, I want to not take it for granted. Thank you for coming out. Happy to do it.

1:25I'm grateful for your friendship. You know, we've known each other since you were at Expedia. And, you know, you had an incredible success story there, right? When the highest, if not the highest paid CEO, you actually walked away from a$200 million stock package from Expedia to take the mantle of Uber. And I remember I just looked this other day, when you joined taking the mantle of Uber, I think Uber was losing, what's the number,$4.5 billion a year. And that was quite the buzzsaw to walk into. And today, I mean, this is the hallmark of an extraordinary CEO. Today, it's earning over$10 billion a year.

2:10What a turnaround. Thank you.

2:16Really extraordinary. And just the scope of what it's done. I remember you really focused the organization. I think one of the things that a lot of companies fail about is doing too much at once. Yeah. And I think we were definitely guilty of that as well. And one of the great pieces of advice that I got from a good friend of mine, Barney Harford, was strategy is just as much about what you're doing and what you choose not to do. It's very easy to say yes to another idea. It's very difficult to say no. But sometimes the no's then amplify the yeses. And it's about pointing the company, having a point of view, pointing the company in a singular direction, and then putting everything you've got behind it.

3:03Well, you've done that and with huge success. And now you're going back to the stuff that you left on the table before. Yeah. Which is, we'll talk about flying cars and all of that. So the robo-taxi race is heating up. Definitely. Yes. And so I'm going to start with the hard question. How are you going to win that race? Well, we are going to win that race with the autonomous community. So autonomous technology and autonomous vehicles, they are increasingly a reality on the streets as we speak. It's been 15, 16 years of development. Since the DARPA challenge. Exactly. With lots of long tails, et cetera.

3:46And Waymo is a leader and a big partner of ours in Austin and Atlanta. And what we view is that there isn't going to be this kind of binary outcome, which is either all autonomous or no autonomous. That really the world, as autonomous technology develops, it's going to develop in a hybrid way. And you are going to have fleets in cities that consist of some autonomous vehicles and then many human-driven vehicles as well. And that ultimately, that transition and the part that we play in that transition because of the incredible demand that we bring to both human drivers and robot drivers, we will have a big part to play in that transition as well.

4:32So we partner with Waymo, but we've got over 20 partners now in the autonomous space, including NVIDIA, for example, WeRide, Pony, Wabi, amongst others. and just like we want every terrific licensed human driver on the platform, we're going to want every terrific licensed robot driver on the platform as well. And we'll be in 15 cities by the end of the year with our partners. And by 2029, we think that we will facilitate more autonomous and robo-taxi rides than anyone else in the world. Mason, do you ever think Elon would come on platform or is he just, I'm doing it all on my own? He doesn't play well with others.

5:18You know, his, I think Elon's approach typically has been a vertical approach, right? They even own their own refinery. Again, when the day comes, when the day comes when those Teslas are safe with a camera only approach, we love to have those Teslas on our platform as well. We've got tens of thousands of Teslas on our platform now. And some of our drivers use FSD. Sure. So we've got a lot of data. It's a great car. It's a safe car. We'd love to work with them as to whether we will or will not is TBD. But there are plenty of other partners in the space. And we think there are going to be many, many winners.

5:55Yeah. When you talk about platforms and for, you know, when Peter and I wrote this book, Exponential Organizations, Uber is a poster child of an organization that scales as fast as technology scales. and you're turning it into a platform, you have to have so many sockets and connectors to all of these different hybrid, robotaxi, human, et cetera. How do you think about that? And what are the major obstacles in building that platform? Well, the platform, actually, what we're finding is that humans are actually much more complicated than robots, right? There are many more unexpected behaviors. There are very significant differences as to how you set up your platform to be able to be operational in Bangalore and also be operational in San Francisco as well.

6:41So with our autonomous partners, there are standard APIs that you can put out there. We are a very big partner in terms of data collect, the amount of data that we are collecting to help in training of the models, where you should pick up, where you should drop off fleet management services. If you think about an Uber driver, They drive the car. They take care of the car. They own the car. They repair the car. They clean the car, etc. All of those services are going to have to be kind of a part of the autonomous ecosystem. And we are essentially providing all of those services so that our partners can focus on the core, which is how do you build a safe and affordable autonomous driver?

7:30And we can take care of everything else. So I'm curious, I saw the announcement you had with Lucid and NVIDIA. Lucid and Neuro, actually, but we also had another announcement with NVIDIA as well. I guess both at the same time at CES. Can you talk a little bit about your tech ecosystem, your automotive ecosystem? Who are the major players that you're building relationships with? So there are a number of players. If you think about the ecosystem, there's the demand aggregator, which is Uber. Then there is the autonomous driver. And there are many players who are building out the autonomous driver, whether it's a Waymo, a WeRide, Pony.ai, NVIDIA is building out its own autonomous driver, Neuro, AvRide, and many, many more.

8:20Wabi, for example. So there are many companies that are building out the driver, and we are helping them in different ways of building out the driver. Zoox is another one building out the driver. Are you going to play with Zoox as well? Well, we certainly would love to work with that. There's some that we're working with and some that we're in discussions with or different places in terms of partnership discussions. Then you actually need the car, right? And the car needs to have a very, very sophisticated compute, needs to have redundant steering, braking, et cetera. So the needs of the car are different.

8:57And we're working with Lucid, for example, has a great car that already has a bunch of the redundancy and the sensor systems already built into that car as well, which is one of the reasons why we partnered with Lucid. But you can expect many other partnership announcements as well, OEM announcements. And then you need essentially the fleet management and fleet ownership as well. Early on, we will go out and buy cars. But then over a long period of time, just like Marriott doesn't own any hotels, it's actually financial players, these kind of real estate investment trusts that own the hotels that Marriott manages.

9:39We think that autonomous will also kind of move into this asset light model where we'll be operating in the fleets, we'll be repairing the cars, we'll be cleaning the cars, either ourselves or through partners. and then there will be financial players, the Blackstones of the world who are going to own large fleets of cars that give a 9 % yield, so to speak. So it's a big ecosystem that we're building and we're essentially working with everyone in that ecosystem. And we think it's going to be another trillion dollar marketplace and we're very, very excited for Autonomous to become a reality, not to also mention that the streets are going to be safer.

10:19right these these cars they don't get these drivers don't get distracted they don't get tired uh and uh we do think that kind of the regulation is coming into place that will make sure that the safety case is one where the autonomous drivers the data's in it's 10 times safer to be on in a tesla and fsa the the early data certainly suggests that that it's quite safe now most of those teslas have a driver as well as a backup, but there's no doubt that eventually the drivers are going to come out. The human drivers are going to come out. How do you handle the liability side? You know, when a Waymo gets in an accident, it's very clearly the fault of the Waymo.

11:01When something happens on Uber's platform, who's liable there? How do you handle that? Do you have special insurance that navigates that? So, as it relates to on our platform, you know, liability laws are different everywhere. But we provide essentially commercial insurance for drivers, human drivers, who are on our platform. And I think that with the autonomous model, more the way it looks is, Waymo is, for example, responsible for their own drivers. They are building a software driver, and they speak to the safety of those drivers. These cars are very expensive, but we are quite confident that the driver is going to be much safer than a human being so ultimately liability is going to come down in the industry and it'll be savings that we can pass on to the consumer essentially.

11:50I'm curious Waymo right now the numbers I've seen come in at like 150k of a car something on that order of magnitude and then CyberCab is saying they're coming in at 30k. you know how how important is the asset cost going to be for a profitable business and i let me ask you a different question how many different providers do you expect there to be on the streets of la a decade from now put it that way so i i think if you think about 10 years from now i think every single new car sold is going to have autonomous software associated with it sure and just like you know we we like uh gms on on the uber network and we like toyota's on the uber network we're essentially going to have every single model autonomous model on the network as well so i think it'll be you know 10 plus different providers now the software space may consolidate to some extent right so i don't know if there'll be uh 10 plus software providers uh but there's no reason to think that this won't be a very very big fragmented industry just like the oem the car manufacturing business is a very large fragmented industry i can't wait till your original uh position of expedia overlaps with uber because my autonomous vehicle is going to become my hotel room and it's going to transport me from las vegas to la right you'll be able to get a real hotel room as well.

13:20But yes, we are in some ways in the business of wiring up things that move. And we've tiptoed into travel. So for example, you can take in the UK and Spain, you can take trains on Uber as well. You can take boats on Uber, et cetera. For us, it's just like reimagining the way the world moves. Anything that moves, we're going to wire it up. Or anything that you want to move, whether it's food or it's groceries or your local drugstore, et cetera. We're going to be there to wire it up to make your life just a little bit easier. Are there certain services like you do health, you do EATS? Are there other services you've got planned?

14:03We have our hands full right now in terms of moving people in every single way and then moving things in every single way. I'd say the focus right now is EATS started, obviously, as online food delivery. What we're seeing now is a friend of mine, a VC who was involved with Uber early on, he said, never underestimate the power of human laziness. And you can build huge businesses there. So what we're seeing is that people want anything and everything delivered to their home, and they want it now. So the expansion of Uber Eats, and we've debated ourselves, does Uber Eats travel to non-food items?

14:44what we're seeing is the expansion into grocery, into every single part of retail, whether it's Best Buy or make-up of Sephora, et cetera, has been growing much, much faster than we expected. And so that, I'd say, is a focus for us, which is delivery of anything and everything to your home within an hour. That business is just exploding for us. A hundred years ago, we had this massive shift from horse and buggy to cars. and it took about 15 years to make the transition where 50 percent of the vehicles were cars how long do you expect that transition to take where 50 percent of the cars are self-driving cars so i i do think that in the next 10 years uh i think every single new car sold is going to have autonomous uh driving software on it and it'll have a sensor stack you know the cost of LiDAR is really coming down.

15:40Costs of cameras are coming down. So within 10 years, every new car is going to be autonomous ready. Now, there's going to be a huge inventory of existing cars. And the average life of a car in the U.S. is over 10 years. So it's going to take a very, very long time. The lifetime of cars is, I guess, similar to horses, too. Horses can live for a while. But I think it'll take a while for that fleet to turn over. and then i do think that the this this product it is a relatively expensive product right today now the cost curves are going to come down and you will see autonomous become a very very big part of developed markets but also keep in mind that we operate in 70 plus countries and a lot of developing markets autonomous is going to take a while to penetrate there was a moment when i did the some of the research years ago and looked at that an electric autonomous car could be four times cheaper than owning a car.

16:38I think ultimately, we think the promise of autonomous is exactly that, which is it's just not going to make sense for you to own your own car. As these cars proliferate, the cost of autonomous, the cost per trip is going to come down. Safety per trip is absolutely going to come up. You'll have your own privacy. You'll be able to have your stuff essentially loaded up in the car in terms of your music or whatever you like. So we do think that autonomous is an enormous opportunity in terms of the expansion of the tan for both mobility and delivery of all kinds. Let me give you my vision of what it looks like five years from now.

17:19So you're sitting at breakfast with your kids and you stand up from your breakfast table and you start walking. Hopefully breakfast delivered by Uber Eats. Let's do that. And you start walking towards the front door. Your AI knows your calendar. It has cameras in your home. It sees you walking towards the front door. And automagically, it's my favorite term, an autonomous Uber pulls in front. You didn't have to call it. You didn't have to ask it. And you hop into it. And it knows that you didn't get a good night's sleep last night from your Uber data. So it decided to bring you a car with a lie-down bed in the back as well.

17:59Sign me up, Peter. Yeah. I'm just going to give you some product advice here. So the international side you just brought up, where are we going to see these roll out? Obviously, U.S. and China, but what countries are most pro-autonomous vehicles, do you think? So I'd say the Middle East is actually the most open and leaning forward in terms of… Investment and lucid. Yeah, innovation of all kinds. I mean, it's not just autonomous, but you look, for example, at Joby, vertical takeoff and landing vehicles. Whether it's Abu Dhabi or Dubai or KSA, Kingdom Saudi Arabia, these are all countries that recognize the transformational power of technology.

18:46They're kind of run by governments and administrations that are very young and incredibly tech savvy. And they want to lead. And so we are seeing the Middle Eastern. So, for example, we are in Abu Dhabi as we speak with autonomous vehicles, with our partner WeRide. And you will see many more autonomous vehicles on Uber in the Middle East. And I'd say Europe is also opening up. Europe is leaning forward. Which country in Europe do you think would step forward? I think, well, there are a number, but we're pretty excited about the potential in the UK with Wave, who is a terrific partner. They have incredible AI talent, and they're essentially building a software stack that they will sell to any and all OEMs.

19:39So we're very excited about that model. I still remember when France made Uber illegal. and I was like okay that's a message to entrepreneurs out there not to start your company or tech entrepreneurs. Fortunately things in France are much better now but I do think there's real promise in in the UK and and and there'll be some exciting announcements coming from from Wave who's one of our great partners. People forget the secondary benefits right I remember there's this big issue where the finance minister in France was trying to shut down Uber And around Paris, you have what we call the banlieue, the suburbs of radicalized folks and drugs, et cetera.

20:20Not the kind of place you usually tour. South Central Alley in the 80s, like that. And the French government had spent$40 billion trying to solve that problem with zero impact. It was worse than ever. And then Uber comes in, and 18 months later, the crime rate has dropped 10x because they're all out driving. And so they're trying to shut down Uber while you're saving them a$40 billion problem. It's just incredible to watch. Earning a flexible living. And same thing, for example, drunk driving. And when we enter into markets, the drunk driving incidents go down significantly. So there are many, many ways.

20:58It's one of the reasons, getting back to how we started the conversation, why I wanted to come to Uber, is this is a company that is having real impact on society and how society moves. And I think with autonomous revolution, even more so. Amazing. I remember I was one of the first speakers at the first Uber Elevate conference. Yeah, many months ago. Yeah, when Uber was sort of pioneering the idea of eVTOL, which is a name that rolls off the tongue onto the floor. You pull it off pretty well. and when you came in the ceo uh you ended up selling uber elevate to jovi and you put all of that on hold which honestly i was like really disappointed about but it was the absolute right to say we have issues with that well it's turned out all right wait no it's it's absolutely it was absolutely the right decision because it was still you know a decade away and it wasn't the right place to focus.

21:58And again, just for all of you here, so many companies fail from lack of focus. I've had companies where I serve as chairman, the CEO starts a whole bunch of different divisions, and it just takes the focus off where you need to be earning your money. So you now partnered with Joby. Yes. And what's your vision on flying cars? I'm going to call them that versus eVTOLs. It is a little bit easier. And, you know, we had found Elevate as a way to, we wanted to catalyze the industry to get real investment into eVTOLs. Because with battery technology and battery density for the first time, the math behind the mass of a battery and how much power the battery had kind of made sense to actually build these eVTOLs, these electric flying cars as well.

22:51and and once we kind of provided that that that catalyst and we saw funding come into the marketplace we thought listen we could then have specialized hardware makers uh fund this and and joe b was just the best that we had seen of all the lot obviously joe ben is an amazing ceo he's absolutely extraordinary and and the vision for us is kind of end-to-end uh trip planning so a A little bit like you said, and what we're hoping is in Abu Dhabi this year, towards the end of the year, you'll be able to push a button, get an Uber to the VertiPort where you get onto a Joby and then take a Joby to your destination and then maybe another Uber at the end of it to wherever you're going.

23:35And save yourself hours of travel. You know, the amount of time that you spend in traffic is extraordinary. Cannot happen fast enough. Absolutely. Absolutely. So it's happening again in the Middle East. It's happening now. And hopefully it will come to the U.S. sometime next year as well. The technology is absolutely real. Now it's about getting the technology licensed with the authorities. And production up and running and enough of these vehicles and enough experience and enough AI oversight. Well, Joby has a partnership with Toyota. So they have the best in the world in terms of manufacturing and safety.

24:13Salim? You know, one of the things I've been critical in the past about Uber is being extractive with the social contract, right? Because you're layering on existing society, but you have a plan to turn drivers into autonomous vehicle owners. And I think that's an amazing transition from shifting the focus on labor to capital. Can you talk about that and how quickly that's being rolled out? Because when you can enable that, you give people so much agency. That's really a powerful direction into the future. Yeah, absolutely. So I'd say there are two angles here, which is one way of obviously looking at Uber is Uber's a transportation, on-demand transportation company, moving people, moving things as well.

24:54Another way of looking at Uber is we are a platform for work, flexible work. And so we have consistently, over a period of time, expanded the kind of work available, whether it's driving, delivering, shopping. And now actually we have a group called Uber AI Solutions where we're doing data labeling. We are looking at models and picking which model is the right model, et cetera. You've got drivers tagging things. Exactly, tagging images, et cetera. So we're kind of expanding the kind of work available. And then at the same time, exactly as you said, as the world, to some extent, you've got these capital assets, that's these cars, that are going to augment and then at some point replace some of the labor with their drivers.

25:45The approach for us is how do we make sure that there are other kinds of work available that lean into kind of the technology versus kind of running away from the incoming technology wave and then also give drivers, et cetera, an opportunity to be their own fleet manager. I love that. I love the idea that an Uber driver that gets displaced gets to buy a car or a couple of cars that work for him or her during the day. And you can kick back and work out at the gym. And it's out there. I mean, it's a beautiful. There's always some work involved in that. And you've got to maintain the fleet, et cetera, right?

26:21Yes. Yes. Yes. Maybe you'll kick back and you'll have some drivers running cars for you. yeah i've thought about that you know buy 100 cars have them going around la um you know and and what i'd want to do is put sort of leds on the side and then have my claw bot start experimenting with with different marketing pitches as it's driving down the street differential pricing i will make sure i give you a call when we open up in la okay uh besides flying cars uh drone delivery i've got keller clifton from zipline yes here tomorrow they're terrific an amazing company right? And I know you know Keller.

26:59I've had CEO of Starship, which is the wheeled ground robot. Talk to me about how you're going to start incorporating autonomy in your delivery. I think we're talking to Keller, and we work with a number of drone companies, Skytrax, Mana, et cetera. And delivery is actually a little bit harder because as it relates to mobility, the passenger kind of gets to the car and gets out of the car, right? Food doesn't do that. So you need to kind of make sure that the positioning of the pickup and drop-off is different. Did you see the robots we had here earlier? I mean, they could jump out of your car.

27:42That could be part of the solution, right? It's a first-mile, last-mile issue as well. And there are two modes that we're working on right now as it relates to delivery. One is drone delivery, which is for suburbs, markets that don't have high rises, et cetera. And we're very excited about that because suburban markets are kind of a new growth opportunity for us. And I do think that drone delivery is going to be one of those surprise and delight moments where you get your food in 10 minutes. Usually prep time is 10 minutes. Maybe take two more minutes. You get it within 15 minutes, which will be absolutely spectacular.

28:17in the urban markets we've got these cute little sidewalk robots whether it's coco or a number of we have coco where they're all over the place and and you know for those they they're they're about right for short deliveries within a mile or two because they don't go very fast and they use the sidewalk and so ultimately you're going to have this multimodal kind of uh delivery network that we're putting together, whether it's on the sidewalks or in the sky. And eventually, you will have specialized delivery robots that go on bike lanes or on the road as well. We're going to be going to your questions next in a couple minutes, so get them ready.

28:57Salim? You know, there's roughly a million active drivers in the U.S. Yes, more than that, but yes. And you've got like 10 million globally. Yes. Okay. As you see the rollout of autonomous vehicles, what's the curve in which you expect the drivers to drop? I think that looking forward at 2030, we're going to have significantly more drivers on the platform, including the US than we have today. Just the growth of the business, the business is growing, you know, over 20%. And we need to add that many drivers, essentially to keep up with the growth, you know, that our audience is growing at 20, almost 20 % as well.