Real Estate Model Could Financially Enable Self-Driving Cars, Says Uber CEO

The dilemma of who will take ownership and manage the costs of self-driving car fleets persists among companies advancing autonomous vehicles.

According to Uber's CEO, Dara Khosrowshahi, inspiration might be found in the real estate sector's methodologies.

At a recent 'All-In' podcast summit, Khosrowshahi addressed inquiries about Uber's plans for autonomous vehicle ownership as they expand this technology in future operations.

Video snippets of this dialogue were shared online by the podcast.

"Fleet ownership by financier groups operating within our network seems viable," Khosrowshahi predicted.

He emphasized, "Each vehicle will have financing options available."

Previously, as the head of Expedia, Khosrowshahi observed a similar business logic with hotel chains like Hilton and Marriott. These brands generally do not own their properties; instead, they are held by real estate investment trusts (REITs) or financial entities.

"Financial players are the actual owners," Khosrowshahi said, drawing parallels to these trusts.

Such trusts manage property expenses, from upkeep to taxes, while they generate revenue through renting.

Potential Paradigm Shift in Vehicle Ownership

In a decade, a REIT-like financial model might emerge for firms utilizing extensive self-driving vehicle fleets, Khosrowshahi speculated.

Historically, Uber achieved profitability by minimizing asset ownership obligations.

Presently, Uber's drivers function as freelancers, using their personal vehicles for ride-sharing and deliveries.

While some driver expenses are partially offset by Uber benefits like fuel discounts, vehicle maintenance remains their responsibility.

While human drivers are expected to remain part of the workforce, the gradual shift to self-driving cars might lead to employment challenges. Khosrowshahi acknowledged this as a significant societal issue during the summit.

For Uber, crafting a sustainable business model that leverages autonomous technology while keeping asset ownership lean is the ultimate objective.