HomeFeaturedUber self driving car causes $20 million loss per month

Uber self driving car causes $20 million loss per month

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Uber self driving car causes $20 million loss per month

Uber thought it would have 75,000 autonomous vehicles on the roads this year and be operating driverless taxi services in 13 cities by 2022, according to court documents unsealed last week. To reach those ambitious goals, the ridesharing company, which hopes to go public later this year, was spending $20 million a month on developing self-driving technologies.

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The figures, dating back to 2016, paint a picture of a company desperate to meet over-ambitious autonomy targets and one that is willing to spend freely, even recklessly, to get there. As Uber prepares for its IPO later this year, the new details could prove an embarrassing reminder that the company is still trailing in its efforts to develop technology that founder Travis Kalanick called “existential” to Uber’s future.

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Reports

The report was written for Uber as part of last year’s patent and trade secret theft lawsuit with rival Waymo, which accused engineer Anthony Levandowski of taking technical secrets with him when he left Google to found self-driving truck startup Otto. Uber acquired Otto in 2016. Uber hired Walter Bratic, the author of the report, as an expert witness to question Waymo’s valuation of the economic damages it had suffered — a whopping $1.85 billion. Bratic’s report capped at $605,000 the cost to independently develop Waymo’s purported trade secrets.

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Waymo eventually settled for 0.34 percent of Uber’s equity, which could be worth around $300 million after an IPO if a recent $90 billion valuation of the company is accurate.

Bratic’s report provides details of internal analyses and reports codenamed Project Rubicon that Uber carried out during 2016. A presentation in January that year projected that driverless cars could become profitable for Uber in 2018, while a May report said Uber might have 13,000 self-driving taxis by 2019. Just four months later, that estimate had jumped to 75,000 vehicles.

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Uber Decisions

The current head of Uber’s self-driving technologies, Eric Meyhofer, testified that Uber’s original estimates of having tens of thousands of AVs in a dozen cities by 2022 were “highly speculative” “assumptions and estimates.” Although Meyhofer declined to provide any other numbers, he did say, “They probably ran a lot of scenarios beyond 13 cities. Maybe they assumed two in another scenario, or one, or three hundred. It’s a set of knobs you turn to try to understand parameters that you need to try to meet.”

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One specific goal, set by John Bares, the engineer then in charge of Uber’s autonomous vehicles, was for Uber to be able to forgo human safety drivers by 2020. The company’s engineers seemed certain that acquiring Otto and Levandowski would supercharge its progress.

“At one point, John Bares and [ex-Google engineer] Brian McClendon estimated that it would help accelerate [AV development] by 12 to 24 months,” testified one Uber corporate development manager.

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External decisions

In a newly unsealed note from a January 2016 meeting with Levandowski, Bares thought that simply talking with Levandowski might be worth tens of millions of dollars: “He would bring (filtered) advice about what to try and not try…that is a day with him and our team could save us months towards 2020 (month = $20 million run rate).”

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If Uber had maintained a $20 million monthly run rate since beginning its AV program in early 2015, and allowing $200 million for its Otto purchase, TechCrunch has calculated that Uber could have spent more than $900 million on automated vehicle research. In contrast, Waymo spent $1.1 billion on its own self-driving cars from 2009 to the end of 2015, and could be spending as much as $1 billion a year today.

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But the honeymoon period for Otto and Uber was brief. In a deposition for the lawsuit, Bares said that his expectation that the Otto acquisition would advance Uber’s self-driving car efforts lasted for “a three- to four-week period, starting in early January 2016.” By August 2016, he testified, it was actually proving a setback: “We never got any lasers out of it. It had… a huge managerial disruption on our staff… as a result of Anthony’s effort to manage and lead.”

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Bratic Report

The Bratic report details the number of people Uber had working on automated vehicles. It says the headcount of Uber’s hardware department in June 2017 was 155 people, with 405 people working on software. A separate Uber filingfrom two months earlier stated that it had more than twice as many people, 1,500, working in its AV unit, although this number may have included Uber’s test operation team and vehicle operators.

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The newly unsealed document also reveals that Waymo claimed Uber’s alleged misappropriation of its trade secrets had accelerated the commercialization of Uber’s autonomous technology by over three years and 10 months.

“This would mean that, applying [Uber’s] assumption of commercialization in 13 cities by 2022, Uber should be ready to commercialize AV technology in 13 cities by 2018,” wrote Bratic. Clearly, this did not happen. In fact, Uber only recently resumed testing a handful of AVs on public roads, following a fatal crash in Tempe, Arizona, last March.

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Uber reported a net loss of $865 million in the last quarter of 2018, and has never made a profit.

Samuel Jim

Am a Software developer with a 3 year professional experience in several technologies not limited to PHP PYTHON and JavaScript, furthermore when am not coding or writing tech articles, you'll find me watching movies.

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