When Uber first began testing driverless vehicles in Pittsburgh back in 2016, then-CEO Travis Kalanick told The Wall Street Journal that the promise of such technology was “so real” and “existential.”
Just about a decade later, though, the ridesharing company’s self-driving vision remains quite a ways off, if recent comments from its CFO are any indication.
Speaking at the Bernstein Strategic Decisions Conference in New York City on Thursday, CFO Balaji Krishnamurthy noted that the rollout of autonomous vehicles will likely proceed in “fits and starts” and “not a straight line.”
For comparison, Krishnamurthy drew a contrast to the relatively rapid proliferation of artificial intelligence across the computing world and on devices within recent years.
“It is important to remember that physical AI, in terms of deployment in the real world, is not as frictionless as virtual AI’s deployment in the digital world,” he told Bernstein Senior Analyst Nikhil Devnani, who moderated a fireside chat with the finance chief. “What I mean by that is you’re going to have multiple bottlenecks that will dictate how quickly AVs can roll out across the market.”
He added: “Software that looks mature will still run into issues, whether it’s related to weather or stalled traffic lights in a city.”
Krishnamurthy, who was appointed CFO in February, pointed out that some of the concerns Uber faces in rolling out AVs mirror similar ones the company faced as it first began to scale across the globe. That includes questions about the company’s impact on labor, congestion and safety. “This is not a new theme,” he said.
Uber certainly has faced a range of challenges on its way to an IPO and profitability. The company, which was founded in 2009 and went public in 2019, didn’t announce a profit until 2023. In its most recent fiscal year, Uber posted a net profit of $263 million, down from $1.78 billion in the prior year.
When asked about what kinds of AV-related outcomes investors could expect in the years ahead, Krishnamurthy suggested that it may take another decade before the industry surmounts hardware scaling challenges. Ditto for expectations on a clearer regulatory environment, he said.
On a five-year time frame, Krishnamurthy said, the impact of AVs is likely to be “immaterial” relative to Uber’s global business. Even assuming an “exponential curve” on a five-year period, self-driving vehicles likely wouldn’t have a big impact on Uber’s overall global trip volumes, he said.
But, within the next 10 years, Krishnamurthy predicted that AVs’ impact could become “quite interesting.”
“The buildout that you need across our footprint … will be materializing at that stage,” he said.
And that’s not to say that Uber is abandoning its longstanding bet on self-driving technology in the meantime. Krishnamurthy said he’s prioritizing investment to support the company’s wider “AV strategy” in a bid to “future-proof ourselves against the opportunity that’s in front of us.” That includes making equity investments in software companies in the space, as well as in original equipment manufacturers.
“We think this is going to be a massive (total addressable market) expansion for Uber, and we’re making appropriate investments against that,” he said of AV technology.
