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Uber planned on running 13,000 self-driving taxis by 2019

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According to court documents unsealed last week, Uber envisioned running 75,000 autonomous vehicles in commercial applications across a geographic spread of 13 cities – all by 2022. These extrapolations date back to 2016, and are part of the cache of documents that have been submitted by Walter Bratic as an expert witness to rebut Waymo’s valuation claims for the economic damages that it incurred due to a trade secret theft.

Waymo had accused its former engineer Anthony Levandowski of stealing technical secrets from Waymo and founding his self-driving truck startup, Otto. Less than a year into Otto’s existence, Uber bought the startup in 2016, and has been in hot soup with Waymo ever since over the alleged trade secret theft.

Waymo made claims that set its economic damages at $1.85 billion, for which Uber’s Bratic responded with a well-toned down $605,000 for perceived damages – a value roughly 3,000 times less than Waymo’s assertion. While Waymo did settle for 0.34 percent of Uber’s equity, what is interesting in those case files is how Uber’s estimate of its self-driving future has remained wildly optimistic at best.

Uber’s documents reveal that the company was spending $20 million a month trying to develop autonomous driving technology. Travis Kalanick, the ex-CEO and co-founder of Uber, had spoken on the existential crisis that Uber would have to contend with in a future where manual driving becomes an outlier. The only way for the company to remain unscathed in such a transition would be when it could commercially launch its own fleet of self-driving cars.

This necessitated the company to dip its toes into the development of autonomous driving technology. Though a $240 million annual investment into Uber’s self-driving program sounds like a lot of money, it pales in comparison to more than $1 billion that Google has been sinking annually into its self-driving startup Waymo – making it one of the primary reasons for Waymo to lead the way in autonomous driving technology.

However, of all the different companies fighting for space in the autonomous driving market, Uber has the most to lose. At the end of the day, Tesla and General Motors are equipment manufacturers, and Google is a search engine giant. Unlike Uber,  a successful commercial advent of self-driving technology by a rival would not require any of the equipment manufacturers or software behemoths to look at revamping its core business model. Uber, which is at the epicenter of the taxi-hailing business, would understandably be in a spot of concern when the economies of scale tilt towards driverless cabs in the future.

From the documents, it can be seen that Uber’s initial estimate on the potential extent its self-driving business was not modest either. A company presentation from early 2016 stated that self-driving cars would be profitable for Uber by 2018, and another report claimed that Uber would run 13,000 self-driving taxis by 2019 –- assertions that have been largely off the mark.

And then there was the March 2018 accident in Arizona where a self-driving Uber test car killed a pedestrian upon impact, causing Uber to close down its autonomous driving operations in Arizona, Pittsburg, San Francisco and Toronto. Further investigation by federal safety authorities into the accident revealed that the self-driving system had detected the pedestrian before impact, but Uber had disabled the car’s automatic braking system, leading to the catastrophe.

More recently, Uber has gone back to testing autonomous vehicles, but the number of vehicles on the road is only a fraction of what it was before. Although a minor hiccup in the larger scheme of things, the timing of the incident and its return to the testing field is in the background of Uber’s upcoming public offering this year – making the situation unpleasant for the cab-hailing giant.

Then again with regard going public, Uber has made sure it has its eggs spread across many baskets. Though the autonomous driving segment is by far one of Uber’s biggest investments, the company has also made sure to invest in other transportation verticals like electric bike sharing, food delivery, freight hauling, and even in vertical take-off and landing (VTOL) aircraft technology, while steadily expanding its geographic reach across each of these segments.

One Comment

  1. Pet

    You write: Waymo made claims that set its economic damages at $1.85 billion, for which Uber’s Bratic responded with a well-toned down $605,000 for perceived damages – a value roughly 3,000 times less than Waymo’s assertion. Hey! Wake up.. how can something be worth 3,000 times less? 1 times less $1.85 billion is zero. It is worth 1 3,000th the value is what you need to write.

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