Uber Started Self-Driving in Secret in 2012, Then Sold It to Survive Covid

Around 2012, Travis Kalanick, Uber's co-founder and then chief executive, quietly started moving the company toward self-driving cars. It was a secret project inside Uber.

Andrew MacDonald, Uber's president and chief operating officer and its longest tenured active employee, takes no credit for the foresight. The foresight was Kalanick's. Like many visionary founders, Kalanick could see years ahead of everyone else, MacDonald said. MacDonald said he did not remember the exact year, but they "would have quietly started working on this" around 2012, 2013, and 2014.

It is the story of a bet that was early and right, but that Uber had to abandon to survive. It matters now because Uber calls autonomy existential, and describes it as its largest single standalone investment, with the caveat that it kind of depends how the spending is defined.

MacDonald is blunt about why the bet matters. A driverless ride is a better product than Uber's core product in many uses, and those uses grow over time. Pickups may be slower today, and the cars still cannot handle every weather condition or street corner, but passengers like the privacy to work, sleep, or talk. In his words, autonomy is as bad as it is ever going to be today, and it will get better every day.

At the time, though, talk ran well ahead of reality. MacDonald noted the forecasts came "not just from Elon Musk, from many people in the industry," and repeatedly promised that self-driving was just around the corner, but that moment never arrived. Uber did not believe it was leading. It was trailing, whether behind the whole field or just behind Waymo, but it was not in pole position.

Then the pandemic hit. In three weeks, Uber's mobility business lost 84 percent of its revenue. The core business was burning billions of dollars a year and was not producing cash. MacDonald said Uber "had a lot to prove that we could just lead and win and make money in our core business."

So Uber divested ATG, its internal autonomy group, selling it to Aurora Innovation. It focused on turning the core businesses into machines that produced cash, and took the company public. A decade after Kalanick's secret start, Uber is spending on autonomy again, through stakes in developers, promised vehicle purchases, operating infrastructure, and a fleet that gathers driving data.