After failing to develop its own self-driving technology, Uber (UBER) is hoping to work with Tesla (TSLA), adding its upcoming robotaxis to Uber’s ride-sharing fleet. “No one wants to compete against Tesla or Elon, if you can help it,” Uber CEO Dara Khosrowshahi said in an interview on Ben Thompson’s podcast Stratechery this week. “Ultimately, we’re hoping that my charm and the economic argument gets Tesla to work with us.”
Tesla unveiled its robotaxi service, called “Cybercab,” in October, claiming it will roll out an unsupervised driving service across certain vehicles this year in Austin. Texas. The company also plans to begin producing a fleet of Cybercab vehicles without pedals and steering wheels as soon as 2026.
Khosrowshahi is confident that Tesla will pull its ambitious autonomous driving vision off. Alongside Apple, it’s one of the few companies in the world that excels at both hardware and software, he noted. But that doesn’t mean its exempt from “economic laws,” he added. “We already have 150,000 drivers who are driving Teslas, and if they get FSD, they’d love to plug it into Uber as well,” said Khosrowshahi. The subsequent revenue would ultimately “increase the value of the Tesla so that the residual value of that car improves.”
Similarly successful collaborations have already taken place in the food business, according to Khosrowshahi. who pointed to Uber Eats’ work with major restaurants like McDonald’s. “McDonald’s has its own app, and has an incredible brand, has a lot of capital, has terrific reach,” he said. “They still work with Uber Eats and DoorDash, because they want to drive utilization of the box called the restaurant, that same economic value is going to be true going forward.”
Uber is no stranger to autonomous vehicle partnerships. It’s gearing up to offer Waymo’s self-driving taxis in Austin and Atlanta via the Uber app later this year. The company has also struck a deal to bring U.K. startup Wayve’s cars onto Uber’s global network.
This isn’t the first time Khosrowshahi has publicly advocated for a partnership with Musk. In an October interview with the Financial Times, he outlined his hopes to tap into Tesla’s self-driving technology and reiterated that competing against Musk is “no easy matter.”
Building a viable business out of autonomous driving still has a long way to go, the Uber CEO told Stratechery. Besides hammering down cost-effective hardware programs and on-the-ground operations, the industry’s barriers include working out regulatory kinks and producing vehicles with a “superhuman” safety record to alleviate societal hesitations towards the technology.
But when it finally turns commercial, Uber is confident that money will flow. The autonomous vehicle marketplace could eventually be worth more than $1 trillion, said Khosrowshahi. “We think it’s an enormous, enormous long-term opportunity.”
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