Uber sells self-driving unit in deal that will push Aurora’s valuation to $10B (opens in new tab)

(Disclaimer, I work for Lyft but this has been said in public many, many times by both companies.)

But in context, he didn’t mean Uber needed self-driving to exist. He meant Uber can’t be left out if self-driving becomes a reality.

In that sense, the sale seems pessimistic. They no longer see self-driving on the horizon, or they aren’t on track to deliver the technology themselves.

Their real problem is if some other company perfects self-driving cars and doesn't sell them. Perhaps Uber have decided that's unlikely, either because no one will or because a company that isn't looking at ride-sharing will.

OR: they finally accepted the fact that self-driving cars aren't realistically happening anytime soon, at least to the level needed to entirely eliminate the driver cost.

That, and they probably realize they have enough market share at this point to be able to (long-term) raise prices instead of lower expenses.

If you assume that self-driving cars eventually become a commodity, Uber and Lyft could just buy them rather than develop the tech in-house. The key strategic bit of the landscape to own would be the app that everyone uses to book them.

I've been long hoping, for their own sake, that they'd sell off the SDC division, since it was hurting their balance sheet anyway. Glad they've seen the light.

This happens to human drivers all the time, and humans are really bad drivers even in situations that have happened before.

I fully expect AI drivers to be safer than human drivers.

People screw up every day driving and the lives lost is very high but going by how my Tesla drives I am going to say impede traffic by slowing down. My car does slow down, safely, when it gets confused or contradictory feedback, and I am curious what the in beta FSD software will do. Their new technique looks vastly improved.

Traffic aware cruise control which many cars have along with limited lane keep assist can go a long way to making the drive safer but many don't use TACC except on highways

Look at it this way, its coming. However it is all one sided because again I emphasize, we need better and more consistent signage and road marking.

US wise, the HOV and Express lanes are probably the most perfect use case for self driving cars. Get into the lane and it should be hands off until exit.

I think most people ask this kind of question because they assume the entire system is some kind of big if-else-if-else statement. The question about swerving and hitting the kid or the grandma follows the same logic.

What we have to realize is that a neural net can and will react to things it hasn't specifically been told about using heuristics and "similar" stuff, just like human drivers. (see video of Tesla FSD avoiding a deer recently [1])

This is exactly like a new, or student driver. They have not yet encountered every possible situation, but they're able to apply reason and logic to new things and the more they drive, the better they get. So although they've never seen a deer jump out, they know it's good to avoid things when possible BUT NOT to swerve into oncoming traffic if there is traffic. So even a new-ish driver who has never seen a deer on the road will do a decent job of slamming on the brakes and swerving if save to do so. Same goes if a tire bounces towards you on the freeway, etc. etc.

Tesla are working towards billions and billions of miles of this kind of "learning driving", where the system keeps getting better and better.

And even after those billions of miles there will be situations it has never seen before, but the required response will be extraordinarily similar to things it has seen before. Chances are it will do a better job than you or I, because it's reaction time is close enough to 0 not to matter, and emotions won't cloud it's judgment if something really extraordinary happens (plane lands on highway, flood washes away road, etc)

[1] https://www.youtube.com/watch?v=pWJoe8hwu_I

Obviously there is still a ton of work to go from easy-to-drive areas to global but it seems like that is a huge notable step.

I think, though, that that's a tangential point, because Uber is not a car company. As others have theorized, Uber has an interest in developing it themselves because self-driving represents an existential threat. They have absolutely no defense against someone else using self-driving to do to them what they used gig economy labor pricing to do to taxi companies.

without the self driving vertical promises, uber is a middleman with a booking app, and they're one squeeze away from tesla or waymo into irrelevance.

Not many car manufacturer would market the airbags, breaks or tires as superior. However, car makers that develop their own engine constantly brag about how efficient or powerful their cars are compared to their competitors (e.g. Mazda and their Skyactiv, Toyota and their Hybrid).

If a company builds an autonomous driving capability and is able to hold on to a monopoly over it, they would either simply drive uber out of business, or license the tech to them in a way that would leave them with very thin margins.

Ride services/Food delivery company cannot function without humans.

Because we all know that VC's don't invest in non-tech companies anymore.

[1] https://www.extremetech.com/computing/192430-ibm-dumps-chip-....

Seems to me this is a clear attempt to get ATG off the books (16% of net loss in Q3 was due to ATG https://investor.uber.com/news-events/news/press-release-det...). If Uber felt that ATG would actually deliver eventually, I doubt they'd be doing this deal to rid themselves of the department.

Why did you write this as ATG equity? Wouldn't it still be their class A/B shares? Or is it structured as a separate entity?

There are two types of sales that are beneficial to a companies bottom line: selling something of value for cash, and selling a liability for little to no cash.

Uber did the latter of the two. Effectively taking a business unit that was 5-10 years behind Waymo and Cruise and dumping it off on someone who might be able to turn it in to something in exchange for a piece of the future upside. But the real win for Uber shareholders here is that it isn't costing Uber R&D dollars anymore.

Do you mean Uber ATG employees? Were they getting stock packages for ATG or for Uber?

All about risk.

Uber's competitive advantage now is their mindshare, app experience, and subsidized pricing. With or without self driving doesn't really change that.

* Tesla driver assistance features that they market as self-driving features. You need a driver that is alert and monitoring the vehicle because it can return control to the driver without warning.

* Waymo has launched limited L4 pilot in the "easy" Tempe, AZ area. They have remote teleoperation / monitoring but no driving in the car.

* ATG has prototypes that run with safety drivers

* Cruise has prototypes that run with safety drivers + they are working on tele-monitoring / teleoperation.

* Comma.AI has a consumer-available L2 driver-assistance device that you can add to your car to do ACC and lane keeping.

* Aurora has prototypes that run with safety drivers

* Zoox (bought by AMZN) has prototypes that run with safety drivers

* Smattering of other companies that are working on the tech, but are no where close to a product launch (Lyft, Toyota, Argo etc)

In general, there was a bunch of hype and bunch of money poured into the industry in 2016-2018. Others saw people pouring money into it and assumed a breakthrough was close and so they poured more money in. The cycle continued to spiral into huge multi-billion dollar investments into technology that is still IMO quite far away from a public launch. Turns out that several years later, it's really hard and no one is actually that close to useful AVs.

Waymo has a publicly available product launched, but I'm confident they are running that program at a significant loss.

Cruise has struggled to hit the milestones set in their funding deals to unlock the next levels of funding.

In my opinion, Comma is going to crush it in the next 2 years, Tesla will keep refining their AP tech, but still won't be FSD. I think autonomous robotaxis will be the norm eventually but not until after 2025.

They have a Level 2 system, which is certainly an impressive technical achievement, but not what most of us are thinking of when we think, "self driving." They are hoping to grow it into something more, but it remains to be see whether that will be possible. Other companies also have Level 2 systems, and, while I've personally never used any of them, some sources do report that Autopilot is not the best one out there, just the most hyped one. So, even if we are just focusing on assisted driving rather than self driving, I'm not sure one can say with too much confidence that they are the clear leader.

I would not interpret the existence of a functional consumer product as evidence of a technical lead in the race toward true self driving. Waymo never had any intention of commercially releasing a level 2 system. Their plan was to go straight to level 4 without any detours. Reports would seem to indicate that they are far, far ahead of everyone else on achieving that goal. It may be that they now have an unbeatable lead. Or it may be that some more direct competitor catches up. Or it may be that a company like Tesla or Cadillac is able to use profits and data collected from their commercial level 2 systems to accelerate their development and catch up. This, too, remains to be seen.

Waymo seems to be closest to a robust 3D lidar based solution, but Tesla maybe be closest to 'a' solution, but the community is split on whether their 2D approach will work.

Then there seem to be a laundry list of companies that entered the market late, and are propped up panicking car companies which aren't sure which one of these companies is the real thing. So, they hedge their bets by taking a piece of all of them.

The solution will come out of 1 of the following:

1. A slow race to making a more and more robust vision system that is eventually good enough to get through regulation. In this case, the earliest to start and one with the most data will win. So, either Waymo or Tesla. By the time others get there, they will have captured the market and made billions.

2. Some smaller company has an 'a-ha' moment. Waiting for an a-ha moment doesn't sound like the most prudent investment decision, but the one that finds it will become a billionaire overnight. This change is so important (like Mapreduce) that it will quickly be reverse engineered and one of Google/Uber/etc. will release a self driving hardware kit + api or come pre-installed in cars like android auto. The solution transforms the vision field with a reach far beyond just cars.

What 'self driving car'? I think you meant 'semi-autonomous cruise control' as there is no Tesla car that is fully 'self driving'.

As for Uber's situation, they had no chance. Mounted losses everywhere caused by the pandemic, government lockdowns and drivers who are now classified as Uber employees make the costs of it all unsustainable for them to justify keeping a 'self-driving unit'.

The only certain and sustainable long term players in this 'self-driving' or 'cruise control' game are Tesla and Comma.ai.

Tesla does not use Lidar as a cost savings measure, and only uses camera output to determine how the car drives. It is unknown if this is enough to account for enough permutations of traffic, but they're calling it full self driving while using car owners as paying (!) beta testers.

AFAIK, no one is close to releasing an autonomous vehicle that can drive on par or better than an average human driver, but that several have a path to getting there.

I believe many companies can thrive until M&A whittles down that list. I don't think this is a first mover takes all kinda deal because safety will have to be proven over a long time allowing other entrants to prove their worth.

No, they don't. And it will take a while to get there.