An engineer at Uber's self-driving-car unit warns that it's more like 'a science experiment' than a real car capable of driving itself (UBER)

Dara Khosrowshahi

Uber has spun out its self-driving-car unit as an LLC with Eric Meyhofer as CEO, as part of its $1 billion investment deal.
People inside the company said that Uber is taking safety more seriously since its car killed a pedestrian last year.
But they said the car still doesn't drive itself all that well.
One person likened it to a "science experiment."
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On the road to one of the biggest tech initial public offerings in years, Uber CEO Dara Khosrowshahi has secured $1 billion from investors for the company's self-driving-car unit, valuing the unit at $7.5 billion, Uber confirmed on Friday.

That investment, from SoftBank and Toyota (both of whom own stakes in Uber), spins out a new limited liabilities corporation for Uber's Advanced Technologies Group (ATG). The new LLC has named ATG's leader, Eric Meyhofer, as CEO, Business Insider has confirmed from people knowledgeable of the deal.

Most of the board will be run by Uber, but there will be one board seat for SoftBank and one for Toyota after the deal closes, which is expected in the third quarter.

Uber's development of its own self-driving cars is an important part of convincing investors that Uber has a long, bright future full of financial growth when it becomes a public company. Uber mentions autonomous vehicles 103 times in its prospectus, calling "autonomous vehicle technologies" part of its "growth strategy."

And Uber has dangled financial incentives in front of Khosrowshahi worth about $100 million if he can convince investors to value the company at $120 billion or more for 90 consecutive days, it said in its prospectus.

Many believe that self-driving cars will be the future of transportation, particularly the future of Uber's niche, transportation for hire.

But people inside that unit have been telling Business Insider for months that Uber's self-driving cars don't work very well and that they perform reliably only on limited well-mapped routes, and aren't making much progress handling more.

We have also heard that some engineers working there question Meyhofer's leadership capabilities for the task, as his background is in robotics hardware, but self-driving cars rely on autonomy software as their brains.

"Seemingly, if you look at the way Eric Meyhofer runs ATG, I don't know if we're actually building a product," one employee, who asked to remain anonymous for fear of retribution, said. "It seems like we are running a science experiment."

ATG is overhauling the car's "autonomous stack," meaning the robot-driving software, the employee said.

Others close to the company described these changes as "always making improvements."

Two grabs of the wheel every mile

There is some data that backs this person's dismal characterization of Uber's self-driving tech.

In February, California released self-reported data on "disengagements" from all autonomous-vehicle companies licensed to drive in the state. That refers to how often human safety drivers "disengage" the car's self-driving capabilities and take control of the car themselves.

Uber reported that its cars had driven nearly 27,000 miles in self-driving mode in the state between March 8, 2017, and November 30, 2018. Human drivers manually took control more than 70,000 times. That means that for every mile the car drove itself, a driver grabbed the wheel 2.6 times.

Eric Meyhofer Compare that track record with Waymo's, the self-driving-car company spun out from Google that pioneered the field and is considered the market leader. Waymo reported that in 2018 human drivers were taking control of its robot cars only one time per 11,017 miles while in self-driving mode.

It's worth noting that Uber's report covers only about a year.

On March 18, 2018, one of its cars killed a pedestrian in Arizona, and Uber benched the cars until December. They haven't returned to California roads but are driving in Pittsburgh, the home of ATG's headquarters. Pennsylvania does not require autonomous-vehicle companies to disclose disengagement information.

The employee we talked to said the cars have not made giant strides of progress in their ability to drive themselves in the four-plus months since they've been back on the road.

Insiders previously told Business Insider that before the crash, the cars had trouble around foliage, certain shadows, tree branches, and other things. One former safety driver told us he needed medical attention from the time when his car continuously slammed on the brakes whenever it detected a pedestrian on the sidewalk.

When Uber released the disengagement report, the company explained the comparatively high number by saying that drivers are trained to take the wheel.

"We measure self-driving system performance by looking at a variety of measures including computer-generated simulation of real-world events and test track results. Safety is our priority. Our Mission Specialists are trained to err on the side of caution and to take manual control of our system any time they think it is necessary," the company said.

$400,000 and counting

The person we talked to said the big bright spot is that ATG has made progress on the 16 internal safety-related goals it set for employees after returning to the roads.

These include developing better metrics to measure safety and improving the safety-driver-operator program. People at ATG feel empowered to speak up over safety issues, according to the most recent employee survey we obtained.

uber self-driving car However, others told us that the pay is so good, many folks are in heads-down mode, not wanting to rock the boat over how well the car is performing.

Some don't want to kill their cash cow, this person said, echoing what a half dozen former employees have previously told us.

A typical senior ATG engineer, not a director but an experienced worker bee, can make $300,000 to $400,000 a year between salary, bonuses, and stock, multiple people have told us.

Many highly paid engineers believe their stock will be worth another couple hundred thousand if Uber's IPO goes well, one person said.

And those inside Uber speculate that Meyhofer will be worth millions, if not tens of millions, after the IPO, thanks to his years at Uber and hefty stock awards for his senior role.

With that much money at stake, this insider echoed what others had told us: Some people feel working at ATG is increasingly political, with promotions and plum jobs doled out based on who you know.

Others close to the company said those complaints are invalid, saying the hiring process at ATG is rigorous.

Many employees there don't much feel the presence of Khosrowshahi.

"I really like Dara. But he has got to be more visible at ATG. This whole culture is broken and broken in the same way that Uber 1.0 was broken," this employee said.

But now that ATG is its own LLC, with board members — including one from Toyota — assigned to the task, people are hoping that oversight of the project will improve. One ATG employee said the group won't be able to rely on controlled demos anymore and will likely have to back up performance claims with data.