Invest Like the Best with Patrick O'Shaughnessy
00:24:09 · Patrick O'Shaughnessy
[00:24:09] S0: of itself. In AV specifically, what does that feel like? It feels obviously like we're just at the very early, early part of the S curve. I'm sure that if the answer is supply, you want to just be the demand aggregator with the most supply. So what does that feel like? What does the state of AVs feel like to you?
00:24:26 · Dara Khosrowshahi
[00:24:26] S2: It's very early, but it's moving very fast. So we've got over 30 partnerships now with incredible partners like a Waymo to a neuro and lucid to an Nvidia that is building not just compute and sensors, but also a software driver now to companies like Wabi and Wave. We Rides of the world, Pony AIs of the world. Just like you're seeing in the foundation model space, there isn't going to be a single winner. There are going to be many players on the foundation models. There'll be open source models as well. We're seeing the same kind of acceleration in the development of AV. And as a result, we want to be your go to market solution for companies that are building out these digital drivers. What we're allowing these companies is to really focus on building the driver. We are building services around them. We're going out and securing depots and charging in cities in which we see the regulatory landscape moving in the right way. We're working with fleet partners. We're securing financing. We just announced a billion dollar financing line with Santander for EV fleets and AV fleets. We're working on autonomous insurance as well. So we're building the entire ecosystem. So someone who builds a driver can get those cars in the road and then we have all the supporting infrastructure. We are collecting data as we speak in the streets that we can feed to the model. And then when they hit markets, we've got instant demand for them. And what we're seeing is consumers love the product and AVs that are on our network are 30% or more busy than, let's say, 1P AVs who aren't using our network. That 30% in terms of trip per vehicle per day, in terms of revenue per vehicle per day can make a huge difference in terms of your ROI of investing in these expensive cars.
00:26:17 · Patrick O'Shaughnessy, Dara Khosrowshahi
[00:26:17] S0: What has surprised you most so far about the product of AVs? Like you get to see all this interesting, the 30% thing makes me wonder about this question. What is interesting to you about the nature of the product and the physical cars themselves and the consumer experience versus the more traditional experience? [00:26:34] S2: So the one thing that is surprising in a different way is how quickly magic turns to normal. When I first experienced Uber, it was in New York City. I was at Expedia. I'm like, oh my god. This thing is absolutely magical. Push a button and a car shows up in five minutes. [00:26:52] S0: They say, like, where's my damn car? [00:26:53] S2: Yeah. Exactly. You're like, it was six and a half minutes. I can't believe that. How dare they? And with AVs, you get in them and it's magical. The cars are nice. There's a sense of privacy, peace, you play your own music. And for the first two minutes, you're like, oh my God, this is amazing. Look at what's happening. Then at three, here you are doing the same thing. So I think what's incredible is what's magical now is going to seem normal to all of us ten years from now. And then it's about getting you from point A to B safely, efficiently, affordably. We want to make sure that these AVs aren't just available for rich people in the middle of cities. We want make sure that they're available everywhere. But I think this technology, the speed to market is going to be fast and the interactions are going to normalize faster than you think.
00:27:38 · Patrick O'Shaughnessy
[00:27:38] S0: I'm so interested by the whole build, partner, buy decision that I'm sure you're making in a million ways every day. You've got these advantages. You've got all this capital, all this free cash flow you can allocate, all this infrastructure, and of course, the demand aggregation that you've already built, which are huge advantages for creating liquidity, etcetera. How do you think about partnering with companies like a Waymo or something that you could certainly see being a competitor in part of what you do if they get a big enough network and the service is good enough, people are always going to buy for huge markets. What is that like navigating that specific example or in general right now with AVs, partnership versus having your own fleet?
00:28:12 · Dara Khosrowshahi
[00:28:12] S2: It's a coexistence that frankly I'm quite used to coming from the travel business. If you think about OTAs, these online travel agents, they compete with a Marriott, they compete with a Delta for the consumer. They compete with an independent hotel as well, all of whom are building a direct channel for the consumer, many of whom have loyalty programs. But at the same time, they want incremental consumers coming from the platforms because they have a big box to fill they and want to drive as much utilization of that box as possible. The returns for a hotel that has 70% of its rooms filled versus 90%, it's night and day. You will take the 90% every single day. The same is true for example in Uber Eats. We work with McDonald's, we work with Starbucks, we work with Chipotle. All of these companies to some extent also compete with Uber Eats as well. And the same will be true of a subset of AVs, which is a Waymo. Of course, they want to build their own brand and their own channel, but at the same time, we are able to drive more utilization for them when their cars are on our network. The same will be true of Zoox. The same will be true of neuro, etc. So we're going to have some players, for example, a wave who's focused on building one end to end model that they license to OEMs. And we will be responsible essentially for all the demand. So there are going be lots of bottles, but I don't think it's going to be black or white, is do we only compete or do we only work together? We think there's going to be an amalgamation of business models. There already is in travel. There already is in food. Same thing will happen in transportation.
00:29:52 · Patrick O'Shaughnessy
[00:29:52] S0: What's your pre mortem for this going wrong? It's five years from now and Uber has screwed up this opportunity. What do you think the most likely reason for it is?