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'Autonomous future is almost upon us,' Uber Freight head says

Uber Freight Head Lior Ron joins Yahoo Finance Live to discuss self-driving tech, autonomous trucking, reducing the truck driver shortage, and the outlook for an autonomous future.

Video Transcript

[MUSIC PLAYING]

- Welcome back, everyone. Uber Freight making a big bet on autonomous trucking, tapping into self-driving tech from once competitor Waymo and Aurora. Uber hopes that this is going to be enough to keep its freight offering competitive as others enter into the space.

So joining us now with more, we've got Uber Freight Head Lior Ron and Pras Subramanian of Yahoo Finance, of course. Great to have you both here with us for the conversation.

Lior, first, starting off with you, when you think about some of the investments that Uber Freight has had to make in order to accelerate its plans to really address the market and bring that service to life, what does that look like even over this past year?

LIOR RON: We think that the autonomous future is almost upon us. It's been through sort of cycles of readiness. And if you look at the technology maturity, we believe that in the next few years, we're going to see autonomous trucks deployed on US highways.

But to really have the impact, the safety impact, the efficiency impact, the logistics impact of that technology, we need to have the right commercial infrastructure to support that, which is what we're doing to the freight.

We're getting ready for that future with drivers that will be available on both sides of the autonomous freight, available to pick up and drop off the freight that is being hauled by the autonomous truck by providing a network of drop trails on both ends that will allow for that move to happen.

And by working with shippers, tens of thousands of shippers, that cannot wait for that help in terms of capacity. In surveys we've done, 75% of them are saying they are very likely to adopt autonomous trucks once the technology is ready.

So working with shippers and being the consultant for how would the future of their supply chain might look like when autonomous technology is being deployed.

- Hey, Lior, Pras here. I know you guys are betting big on the hub to hub model. Explain to us what that means exactly and why it's a better system for autonomous trucking right now.

LIOR RON: We think hub to hub is the easiest way to deploy the technology at scale. Hub to hub essentially means that you only do the autonomous freight between a hub off the highway, close to the origin of the load and a hub close to the destination of the load. In between, the autonomous freight can run on the highway in a very predictable, very repeatable way.

And then the first mile will be done by a human driver, by an Uber Freight driver that will hold those loads from the distribution center to the hub. In the hub we'll do a switch. And that trailer will then be switched and carried by the autonomous truck that will carry 100, 200, 300 miles, to the other side of the highway where another driver will wait and do the last mile delivery.

We believe that model is much more scalable. We believe that model can actually have the density of freight you need. This is going to be like the airline. You need to have as much freight going on that truck back and forth. And we believe that can really accelerate the deployment of the technology at scale.

- Lior, obviously, that doesn't get rid of the need for drivers entirely. But what you're talking about really goes toward solving probably the biggest issue for trucking right now, which is finding people to drive the trucks.

You said a moment ago we're a couple of years away from perhaps seeing more full implementation. Where are we in that process? Is the technology ready? Where are we from a regulatory perspective? Where are we in that whole process of getting there?

LIOR RON: First of all, to your point, there's just a huge need. We all want more and more stuff delivered. And there's just not enough truck drivers.

The average age of a truck driver in the US is 55. Based on conservative estimates, we need another 200,000 to a million more drivers in the next couple of years. And those are very hard to recruit into that profession.

So there's an acute need to keep logistics moving for the technology. In terms of technology maturity, there's a lot of activity. And there's a lot of progress.

I think the technology will be deployed in a couple of stages. The first stage that everybody's focusing on right now, which I do think will happen over the next couple of years, is on a specific lane. Let's say Texas, Dallas to Houston, Dallas to San Antonio, or somewhere in Arizona.

One of those lanes is actually being solved technology. You can actually start hauling goods hub to hub.

Once that milestone is reached, we think regulation, consumption, shippers, the infrastructure, will be ready to accelerate. We believe this will happen within the next couple of years.

Once we have that initial deployment, one lane, nighttime, low traffic, perfect weather, then it's going to be about scale. Scale is going to take years and years.

But again, that hub to hub model will allow you to scale within a specific geography, a specific lane that was solved technically in a pretty fast pace.

- Lior, real quick, how does the partnership work with Waymo and Aurora exactly? How are you guys working with that in terms of putting their technology into trucks right now?

LIOR RON: So this is really a partnership about partners that know how to develop the technology, are the best in the game in developing the core technology of self-driving, Waymo and Aurora, and the commercial partner that can help them and help the technology be unlocked and commercial deployed at scale.

So for example, with Waymo, we've secured billions of miles on autonomous miles that Waymo will deploy on the Uber Fleet network. We will then provide the shipments, the shippers, the partners, to be able to actually fill those trucks and fill those loads.

And every Waymo truck will come with the Uber Freight app pre-installed so that the truck driver and carrier can utilize the network and find loads to actually take them back to the origin and to have the full commercial wrapping in terms of drop trail and whatnot.

With Aurora, we're actively testing in Texas as we speak. We're hauling a couple of those loads on a weekly basis to really understand the operational model. How will those transfers look like? What will be the economics of switching back and forth between human driver and autonomous truck?

What will be the full details that we will need to share with shippers, with regulators, with the ecosystem, to be able to deploy that technology at scale?

So we're very happy with both partnerships. And we believe that this is going to take a decade plus to transform. So having that decade plus long-term partnership allows us to turn back to the biggest shippers in the country and start the journey with them on transforming the supply chain and be ready for that autonomous future.

- Lior, thanks for being here. Lior Ron is Uber Freight Head. And also, our Pras Subramanian joining us for that interview. Thanks, Lior.