To The Moon

In a recent interview on the podcast "Hard Fork," Uber $Uber(UBER)$  CEO Dara Khosrowshahi discussed the future of robotaxis, comparing Tesla $Tesla Motors(TSLA)$  and Waymo. He believes both companies will eventually address their respective challenges, but in the short term, Waymo is more likely to achieve a scalable operational fleet.

Tesla Robotaxi VS Waymo

On social media, many supporters of Elon Musk argue that Tesla will launch a large-scale, fully autonomous fleet within a few years, operating legally without needing intermediaries like Uber. They contend this could lead to Uber's decline.

Uber

Interview Highlights: Waymo vs. Tesla

Khosrowshahi provided a detailed comparison between the two approaches. He noted, "Waymo's robotaxi solution is already operational; this is not just theory. There's a significant difference—Waymo utilizes more sensors, including cameras and lidar, which adds a level of redundancy."

He further explained that Waymo generally has greater computing power, enhancing its ability to interpret data. The use of high-definition maps simplifies real-world recognition, making the challenges more manageable. He acknowledged that hardware costs are likely to decrease over time, indicating that while Waymo has hardware-related challenges, they are surmountable.

In contrast, he pointed out the greater hurdles faced by Tesla: "Under Elon's model, software bears a very heavy responsibility. In Waymo's approach, you don't need to invest as much in training, making the problem easier to tackle computationally."

Khosrowshahi believes both methods could ultimately succeed but has differing views on their timelines. "I think both will reach their goals, but if I had to bet on who will achieve scalable operations first, I'd put my money on Waymo in the next five years, even though I believe Elon will reach viability eventually."

Potential Collaboration with Tesla

Despite Uber's current partnership with Waymo, Khosrowshahi did not rule out the possibility of collaborating with Tesla. "If they develop their own autonomous vehicles and decide to operate solely through the Tesla app, they would become competitors. If they choose to partner with us, we'd work together. Both scenarios are possible."

He added, "Elon's vision is quite compelling, especially concerning potential rideshare fleets. Fleet owners would likely want to maximize profits by utilizing the Uber platform."

Timeline for Autonomous Driving

When asked when 50% of Uber rides might be autonomous, Khosrowshahi offered a cautious estimate: "I would guess it will be close to 8 to 10 years, though I'm sure this guess could be off, possibly leaning closer to 10 years. Many people overestimate how quickly this will happen; this is just a rough guess."

Political and Social Implications of Autonomous Driving

Addressing potential political resistance to autonomous driving, Khosrowshahi stated, "I think there will be resistance. I hope we can avoid it through proper dialogue. Historically, society has adapted to job transitions, and even in today's highly automated world, employment rates are at historic highs."

He acknowledged the reality that AI will replace jobs and emphasized the need for discussions about the pace of progress and its implications. "These are conversations we need to have; without them, there will undoubtedly be resistance. Significant societal changes always face pushback."

Khosrowshahi also mentioned that Uber is exploring new job opportunities for drivers, stating, "We're currently working with drivers on tasks like AI mapping and model training. We're expanding our on-demand work solutions for drivers, as driving jobs may diminish or slow in growth over the next decade, and we will seek to adapt accordingly."

Conclusion: Tesla as the Potential Winner

Personally, I think despite Khosrowshahi's cautious perspective on timelines, there are strong arguments for Tesla emerging as a major winner in the autonomous driving space. Tesla's unique approach leverages its vast fleet of vehicles already on the road, collecting invaluable real-world data that significantly accelerates the learning curve for its AI systems. This data-driven model allows Tesla to refine its software continuously, potentially leading to quicker deployment of fully autonomous vehicles.

Moreover, Tesla's vertical integration—controlling both hardware and software—gives it a competitive edge in innovation and cost efficiency. While Waymo relies on extensive sensor arrays, Tesla's reliance on cameras and neural networks can lead to a more streamlined and scalable solution.

Elon Musk's ambitious vision, combined with Tesla's robust infrastructure and aggressive investment in AI technology, positions the company to capture a significant share of the autonomous ridesharing market. As regulations evolve and consumer acceptance of autonomous vehicles grows, Tesla's early mover advantage and brand recognition could help it dominate the landscape, ultimately positioning the company as a formidable competitor to traditional rideshare models like Uber.

Tesla Robotaxi

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