BackUber working with auto makers to design EVs customized for ride-sharing, deliver
Vehicles with lower top speeds and smaller footprints could be more efficient and lower cost for drivers, CEO says
PremiumDAVOS (SWITZERLAND) : Uber Technologies Inc. is working with auto makers to design lower-cost electric vehicles tailored for its ride-hailing and delivery businesses, part of its effort to electrify its fleet.
Speaking Thursday at an event hosted by The Wall Street Journal, Uber Chief Executive Dara Khosrowshahi said the company is working with manufacturers on vehicles optimized for city use, ferrying passengers and deliveries. For ride-sharing, that includes cars with lower top speeds and with seating areas where passengers can face each other.
“I do think that top speeds, for example, that many cars have are not necessary for city driving that’s associated with ride-share," Mr. Khosrowshahi said. “That can reduce the specs and if you reduce the specs you can reduce the ultimate cost."
For delivery vehicles, Mr. Khosrowshahi said the company is considering smaller vehicles with two or three wheels and trunk space. Such vehicles “can get through traffic easier and have a much smaller footprint, both in terms of environmental but also traffic footprint than, let’s say, a car to go deliver groceries," he said.
The announcement comes as Uber is working to convert the fleet of vehicles its drivers use to electric by 2030 in many parts of the developed world, and in some places like London by 2025. Uber has previously said it was working in the U.K. with electric-vehicle maker Arrival SA to build a vehicle aimed for ride-hailing drivers. On Thursday, Mr. Khosrowshahi declined to say which car makers the company is working with.
The tech sector may be facing a rough year ahead, with Microsoft Corp. joining other companies in announcing layoffs this week. Mr. Khosrowshahi said Thursday that Uber doesn’t currently have plans for across-the-board cuts, but will be watching costs closely.
He also said that consumer spending on services remains strong, at least judging by how its users are ordering rides and food deliveries—something that has been a looming question for the company.
“We’ve obviously, because of all the prophecies of doom coming up, been taking a very careful look," Mr. Khosrowshahi said. “What we are seeing in terms of consumer spending on a local basis is still quite strong."
Mr. Khosrowshahi was one of the first big tech CEOs to start warning of souring investor appetite for big technology stocks—sending a memo in May that the company had to cut costs and freeze hiring.
Mr. Khosrowshahi recalled Thursday that at the time interest rates were rising and capital was being pulled out of the market, and he concluded that there would be a new focus on profit rather than just growth in a new post-free-money environment.
“I felt like our definition of good in terms of performance, in terms of what our own plans were, was no longer good enough," Mr. Khosrowshahi recalled of writing that memo, which he said was initially a tough pill for the company to swallow. “We were pretty early in making that call."
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