Is Anybody Big Enough to Acquir

Kirsten Korosec has a blockbuster story in TechCrunch about Uber’s efforts to spin off its Advanced Technology Group (ATG). This marks the latest twist in the too-crazy-even-for-Hollywood saga of Uber’s self-driving unit.

Korosec reports that Uber is in discussions to sell ATG to Aurora, although Korosec notes that:

“Even with the expected depletion in Uber ATG’s valuation, it would be seemingly out-of-range for Aurora unless it was able to secure additional outside investment or structure the deal in a way that would allow Uber to keep some equity.”

Uber ATG has twice as many employees as Aurora, further raising the question of who would be acquiring whom.

ATG has been through all sorts of drama — starting with controversy related to hiring away a large portion of Carnegie Mellon University’s robotics team, to subsequently acquiring Otto, a startup headed by former leaders of what is now Waymo (and was then called the Google Self-Driving Car Project). Google sued Uber and Otto founder Anthony Levandowski, in particular, settling just as the case went to trial. That particular controversy was a factor in the ouster of Uber founder and CEO Travis Kalanick.

The biggest ATG crisis was the fatal collision with pedestrian Elaine Herzberg in Phoenix, Arizona, in early 2018. That collision prompted ATG to halt all on-road autonomous vehicle testing for months, and cast a shadow over the whole industry.

I have always been impressed by the caliber of the ATG team, particularly the individuals who worked with Udacity to build our Self-Driving Car Engineer Nanodegree Program.

As Korosec’s article points out, Uber is trying to divest non-core groups across the board, including its JUMP bicycle division and several international affiliates. ATG is part of that effort. But, at 1200 employees, ATG may be the single largest self-driving car organization in the world right now — perhaps only Cruise and Waymo are of comparable size. Which raises all sorts of questions about who might be able to or interested in absorbing all that talent.

Uber Resumes Testing Self-Driving Cars

Uber ATG announced in a blog post last week that it is restarting its self-driving car tests in Pittsburgh, along with manual driving tests in San Francisco and Toronto.

Uber has been telegraphing this return for weeks, and it’s good to see the changes the company has made since one of its autonomous vehicles fatally collided with an Arizona pedestrian last spring.

The trigger for returning vehicles to the road appears to have been approval from the Pennsylvania Department of Transportation. This approval was not required — Pennsylvania law places no restrictions on self-driving cars — but Uber solicited the approval nonetheless. Presumably the company plans to work more closely with regulators than it has in the past.

When Uber shut down self-driving operations last spring, it had recorded approximately 2 million autonomously-driven miles. That put it solidly in second place, behind Waymo’s then-8 million miles and ahead of the 500,000 or so miles driven by Cruise.

Since then, everyone else has kept testing while Uber has been on pause. The latest numbers aren’t publicly available, but Waymo announced 12 million autonomous miles a few months ago, and Cruise may well have passed Uber’s 2 million miles by this point.

It’s still early days, but it will be interesting to see how long it takes Uber to get back into the full swing of testing and development.

Ridesharing Moves Toward Subscriptions

In the last few weeks, both Lyft and Uber rolled out (very different) subscription pricing models.

Lyft’s All-Access Plan offers 30 rides per 30 days (up to $15 per ride) for $299. This is basically a bulk purchase option. A Lyft power user would save $150 per month by subscribing instead of paying per ride. (30 rides * $15 per ride— $299 subscription price =$151 savings)

Uber’s Ride Pass, by contrast, is essentially insurance against surge pricing. For $14.99 per month, Uber users escape the risks of surge pricing, plus they save approximately 15% off of normal fares. A user would probably need to spend $100 or more per month on Uber to come out ahead.

Each of these offers is a tiny, baby step toward all-you-can-eat subscription ridesharing. The marginal cost of each ride probably prohibits Lyft and Uber from diving headfirst into all-you-can-eat ridesharing. Hopefully self-driving cars will lower that marginal cost to the point that it becomes feasible.

My first professional job was with America Online, now AOL. I joined as a college intern in 2001, but there were still veterans around who could recall AOL’s switch from hourly to unlimited pricing.

22 years ago, AOL switched from plans that allowed for metered hourly Internet usage to plans that allowed unlimited Internet access. The pricing change brought in a wave of new customers, along with per-user usage increases that overwhelmed AOL’s infrastructure. It was one of the most significant things AOL ever did.

Ridesharing is getting closer to its all-you-can-eat moment.

Waymo v. Uber is Over

They settled for $245 million in Uber stock and Uber denies using Waymo’s technology.

Per Uber CEO Dara Khosrowshahi:

To our friends at Alphabet: we are partners, you are an important investor in Uber, and we share a deep belief in the power of technology to change people’s lives for the better. Of course, we are also competitors. And while we won’t agree on everything going forward, we agree that Uber’s acquisition of Otto could and should have been handled differently.

And hopefully that will be the end of that.

The Self-Driving Polity that is Arizona

What’s different is that this time, Uber has the blessing from Arizona’s top politician, Governor Doug Ducey, a Republican, who is expected to be “Rider Zero” on an autonomous trip along with Anthony Levandowski, VP of Uber’s Advanced Technologies Group. The Arizona pilot comes after California’s Department of Motor Vehicles revoked the registration of Uber’s 16 self-driving cars because the company refused to apply for the appropriate permits for testing autonomous cars.

As Louis Brandeis said, the states are “laboratories of democracy”.

Read the whole thing (it’s short).

Uber Elevate

Somehow this story slipped past me last October, but apparently Uber circulated a whitepaper outlining their plane to bring personal VTOL (vertical take-off and landing) aircraft to the masses.

The whitepaper itself is 97 pages long, but a more concise summary is on their Medium channel.

Uber outlines eleven major challenges for bringing VTOL to market at scale:

  • Certification
  • Batteries
  • Efficiency
  • Reliability
  • Air Traffic Control
  • Cost
  • Safety
  • Noise
  • Emissions
  • Infrastructure
  • Pilots

It’s a brave new world out there.

Uber and Daimler Build Self-Driving Cars Together

Uber and Daimler are teaming up to build self-driving cars. This is particularly great news for me because Uber and Daimler / Mercedes-Benz are two of Udacity’s best partners for the Self-Driving Car Nanodegree Program. I’m glad we’re all working together.

According to the press release by Uber CEO Travis Kalanick:

In the coming years, Daimler has planned to introduce and operate their own self-driving cars on Uber’s ridesharing network.

This is a new and interesting business model that is a little different than what I’ve seen before.

There has been speculation that some automotive manufacturers like Tesla might launch their own mobility services and compete directly with Uber. And there has been speculation that tech companies like Google might manufacture their own vehicles.

In this case, Mercedes-Benz is still manufacturing the vehicles, and they are retaining ownership, but they are deploying them on Uber’s network.

This might be a way for Mercedes-Benz to learn about ride-sharing from Uber, and for Uber to learn about automotive manufacturing from Mercedes-Benz.

Self-Driving Cars and Regulators

Business Insider has a great inside-baseball story on the early days of Otto, particularly the negotiations and maneuvering that took place in running their first self-driving truck tests in Nevada.

The Nevada regulatory bureaucracy is generally very amenable toward autonomous vehicles, but there’s still a certain amount of required testing and licensing.

According to the BI article, Otto had to figure out a way around that in order to keep up their frantic development pace:

Before an autonomous vehicle can be operated on the state’s roads, it must be issued a testing license and special red license plates. It has to be able to capture driving data in case of crashes, have switches to engage and disengage the autonomous systems, and have a way to alert the human operator if it fails.

To obtain a license, Otto would have had to produce evidence of 10,000 miles of previous autonomous operation and submit a truck for a self-driving test, such as the one completed by Google in 2012. It would also need to post a $5 million bond and file reams of paperwork. Even with all those requirements fulfilled, Otto’s demo would need two people seated up front, one of them poised to take over in the event of a failure.

…

Otto’s founders were faced with a stark choice. They could submit to the DMV and undertake the laborious process of modifying, testing, and licensing their truck. This would likely take a month or more, and could risk their first-mover advantage in driverless trucking. Or the engineers could continue with their test as planned.

Taking Uber to the Game

I’m not afraid to say it.

I am a Phoenix Suns fan.

I still wear the orange and purple, even though the Suns are 3–8 and sit near the bottom of the Western Conference. Charles Barkley 4ever.

And so I paid good money and trekked to the Oracle Arena tonight, all to watch the Suns collapse in the final minutes of the game, as soon as the Warriors decided to actually start trying.

On my way in, I saw a giant Uber sign, with an arrow pointing into the stadium lots. As far as I can tell, the Warriors are actively facilitating Uber, even though it undercuts their take from stadium parking.

Maybe it’s because fans demand it. Maybe it’s because Joe Lacob, the Warriors’ venture capitalist owner, has a stake in Uber.

Whatever it is, hello future.

Beer Run

Our friends at Otto just announced their first delivery: a 120-mile beer run from Loveland, Colorado, to Fort Collins.

From the details in the Times article, it sounds like the truck drove autonomously on both highway and surface streets, which is a real accomplishment.

Otto’s truck departed Anheuser-Busch’s facility in Loveland, Colo., in the early morning before reaching the interstate in Fort Collins. The truck drove through Denver — alongside regular passenger car traffic — and navigated to its destination in Colorado Springs without incident.

Uber is expanding from the business of moving people and into the business of moving everything.

The delivery was indicative of Uber’s larger ambitions to become an enormous transportation network, one in which the company is responsible for moving anything, like people, hot meals or cases of beer, around the globe, at all hours and as efficiently as possible. Travis Kalanick, Uber’s chief executive, has said he envisions a future in which transportation will occur in different ways, using both manned and unmanned vehicles.