Uber CEO Dara Khosrowshahi Ramps Up Robotaxi Deals as Freight Revenue Jumps
Observer ·
Dara Khosrowshahi runs a platform used by 215 million monthly active consumers. Bringing more driverless cars onto it changes the costs he has to manage.
Uber CEO Dara Khosrowshahi is trying to expand the supply of rides as demand grows. Gross bookings rose 20 percent in the three months ended Sept. 30, according to results released Nov. 4 . The platform had 215 million monthly active consumers, a measure that covers both rides and delivery.
Uber’s non-GAAP operating income rose 38 percent to $2.3 billion, and free cash flow was $2.5 billion. Revenue increased 10 percent to $14.8 billion from a year earlier. The company reported earnings of 25 cents a share under standard accounting rules and 88 cents on its adjusted measure.
For Khosrowshahi, two businesses still have room to grow: freight and autonomous vehicles.
Ed Kim , president and chief analyst at automotive research firm AutoPacific , sees an opportunity for Uber to apply its experience in rides and food delivery to freight. “Can they shake up the logistics industry in the same way?” he tells Observer.
Uber Freight is essentially a digital broker that connects companies that need to ship goods by truck with trucking companies and independent drivers to make the trip happen. Businesses pay Uber Freight, and Uber Freight pays the trucker; the arrangement mirrors the role Uber plays between customers and drivers in its core mobility business. Uber Freight aims to address a problem that has long plagued trucking: wasted trips with empty trailers and a slow process for finding loads. The industry calls these “empty miles,” or “deadhead” miles.
Freight revenue jumped 34 percent to $1.76 billion in the three months ended Sept. 30, though the division still recorded a $33 million segment operating loss under Uber’s adjusted measure. That growth helped the overall business, but it was not enough to make freight profitable. Uber launched the business in 2017, a few months before Khosrowshahi became CEO.
Kim says it’s possible that Uber will be able to change the market and compares the opportunity to the growing expectation across industries for on-demand service. “Everyone’s in a rush. Everybody needs their solution yesterday,” he says.
Autonomous vehicles and capital investments also stood out to Stephanie Brinley, an automotive analyst at Mobility Global . In April, the Financial Times estimated that Uber’s deals put it on course to invest more than $2.5 billion in equity stakes and spend over $7.5 billion on robotaxi fleets over the following few years, Reuters reported at the time . The agreements depend on partners meeting deployment milestones.
Uber has announced partnerships with Nuro , Rivian , Avride , Lucid and, in certain cities, Alphabet ’s Waymo . Waymo plans to offer rides through its own app in Austin and Atlanta starting in January 2028, ending Uber’s exclusivity there, according to Bloomberg’s Nov. 4 reporting . That does not by itself establish when all Waymo rides would leave Uber.
“Uber is the platform and the connector, and that’s where they started, and that’s largely where they are,” Brinley tells Observer. For that model, she says, partnering with a vehicle maker makes sense. She sees a different strategy from Waymo’s, rather than one approach being inherently better.
Khosrowshahi expects about 700 fully driverless vehicles on Uber by year-end and more than 2,000 in 2027. Uber and Motional launched a service in Las Vegas in March; Motional is majority-owned by Hyundai Motor Group . Amazon ’s Zoox also announced not that one approach isa Las Vegas rollout through Uber for this year.
Brinley says companies operating robotaxi fleets still have to prove that doing so costs less than paying a driver. “The jury might still be out on that,” she says.
Brinley says robotaxis are still too small a part of the wider national market to change what people pay to get around. In her view, they won’t drastically change household transportation costs for most people over the next five to 10 years.
Kim says the next few years will probably be the hard part for Uber’s autonomous vehicles. He says broader deployment is at least two or three years away and depends on hardware costs coming down. “The returns aren’t going to be immediate,” he says, noting that Uber will have to manage cost, price and investor enthusiasm at once. It will be “a very careful balancing act,” he says.