The CEO of Uber, Dara Khosrowshahi considered shutting down the company’s money-losing autonomous vehicle operation but a visit to Pittsburgh changed this thought. There, Khosrowshahi and other Uber executives were briefed on the state of the company’s self-driving vehicle research, which is based in Pittsburgh.
They were impressed by the progress its autonomous division had made in testing driverless cars in Pittsburgh and Arizona. The meeting convinced them that Uber needed to forge ahead with self-driving cars.
But a few days after the summit, one of the autonomous cars of Uber struck and killed a woman in Tempe, Arizona. A video of the collision showed a distracted safety driver failing to react in time as the vehicle barreled into the pedestrian.
This incident threw autonomous vehicle efforts of Uber into flux. It immediately forced the suspension of its self-driving car tests in cities including Tempe, Pittsburgh, and Toronto.
A few months later, the executives of Uber were divided over what to do with the autonomous business. While one camp was pushing Dara Khosrowshahi to seek partnerships or even a potential sale of the unit, called the Advanced Technologies Group, a rival contingent is arguing that developing self-driving technology is crucial to the future of Uber.
The CEO, Khosrowshahi remains undecided on the matter, though he had expressed a desire to partner with other companies on autonomous technologies. Then, Uber started talking with a few auto manufacturers about potential partnerships, including supplying Uber’s autonomous driving technology for use in Toyota’s minivans but Toyota declined to comment.
In the recent months, top engineers have left self-driving project of Uber for other lucrative opportunities. Also, some senior engineers and executives with expertise in self-driving vehicles had left, one of those was Don Burnette, one of Otto’s founders, who became the chief executive of a new self-driving company called Kodiak that focuses on long-haul trucking.
Uber’s self-driving cars recently returned to the road in Pittsburgh but with human drivers at the wheel (as a safety measure), this means the employees are driving around like any other car on the road except for the fact that the vehicles are carrying billions in technology.
Uber was valued at 62 billion dollars and has racked up billions of dollars in losses since it was founded in 2009. It needs to persuade investors that it can eventually create a sustainably profitable business soon. The self-driving efforts, which have been losing 100 million dollars to 200 million dollars a quarter, do little to help that case. Since Khosrowshahi joined Uber, he has been shedding money-losing businesses.
In its restlessness to get on the road with driverless cars, Uber also skipped some of the regulatory measures. It started testing its autonomous vehicles in San Francisco in 2016, without a permit from California’s Division of Motor Vehicles. The state agency ordered Uber to apply for a permit, but it refused to do so by giving a statement that permits were not necessary since safety drivers were monitoring the cars. The DMV ultimately revoked the registrations for the sixteen self-driving cars that Uber was testing in the city.
In May, Uber announced that it was shutting its driverless testing hub in Arizona and laying off three hundred employees. A day after this announcement, preliminary findings from federal regulators confirmed what many self-driving car experts suspected – Uber’s self-driving car should have detected a pedestrian with enough time to stop, but it failed to do so. Dara Khosrowshahi has started to de-emphasize the role of the company in developing the driverless technology.
In July, Uber announced that it was closing its autonomous trucking business and instead the company would focus exclusively on building self-driving cars.
Burnette said that Uber would most likely continue to pursue its vision of driverless cars. This is because many companies have been working on it for so long and they have an enormous amount of money behind them.