Getty
- According to Goldman Sachs, Uber's real goal is "for Uber to truly become a legitimate alternative to car ownership."
- Autonomous fleets of Uber cars will be much cheaper than owning a car.
- Private car ownership costs about $0.80-$0.90/mile today. Using an Uber costs $2.50/mile. Autonomous cars will bring the latter cost down, CEO Dara Khosrowshahi told a Goldman Sachs conference.
- Are you ready to live in a world where owning a car is like owning a horse: Something that rich people and rural people do, but most of us don't?
When Uber CEO Dara Khosrowshahi appeared at Goldman Sachs' tech conference in San Francisco last week, most of the headlines centered around the company's legal settlement with Alphabet and Waymo, the company's lack of profits, and its upcoming IPO.
But a note from Goldman Sachs' technology analyst group summarised the discussion by leading with something that got a little less attention: How Khosrowshahi and Uber view the future of the car. Specifically, your personal car.
Uber doesn't want you to buy cars anymore, Khosrowshahi told Goldman Sachs President/Co-COO David Solomon.
Historically, the Uber narrative has been about the replacement of traditional taxi drivers and their expensive, highly regulated taxicabs with cheaper Uber drivers in their own private cars. More recently, that story has changed a little as Uber's ambition to create driverless autonomous fleets has become more clear. Uber is developing tech to replace professional drivers as an entire class of workers, according to the company's patent filings.
The Goldman note, however, underlines something even more ambitious than that. The ultimate goal of Uber's driverless fleet will be to replace car ownership as much as possible, the note says:
"Uber stressed the importance not only of autonomous technology for the future of the company, but also the value it can create from developing that technology within its existing network. In order for Uber to truly become a legitimate alternative to car ownership it must take its per mile cost below the cost of car ownership, or $0.80-$0.90/mile, from the $2.50/mile it costs on average today for an UberX, according to management. While initiatives like pooling (50% of rides in some cities) and driver density can help to lower costs, autonomous is the single most transformative piece of the equation. Uber expects to partner aggressively on this front, noting that 'winning' is making sure every single autonomous player is plugged into its network."
Khosrowshahi: 'We don't want you to buy cars'
A report in The Street added a little colour:
"We don't want you to buy cars," [Khosrowshahi] said. "We want you to use shared mobility."
This is going to be a new idea for most people. It will also mean a huge cultural change. if Uber's plans come to pass, owning a car will become a bit like owning a horse: something that rich people and rural people do, but most of us don't.
The idea has already got traction on Wall Street, however. In a research note to investors last year, UBS speculated that autonomous car fleets could be as much as half the price for commuters than the cost of owning a car:
"The shift towards electric autonomous vehicles, combined with more advanced fleet optimization and servicing platforms, next-generation traffic management and more intense competition, should reduce the fee charged to passengers of robotaxis by as much as 80% versus a ride-on-demand trip today. The technology to make robotaxis a reality is already available. In this new paradigm, owning a private car will cost almost twice as much as using robotaxis regularly."
UBS also speculated that the cost of running a driverless robot fleet might become so cheap that companies could sell advertising on them and inside them that might be lucrative enough to let passengers ride for free.