Tesla Rebuffed Uber Partnership on Self-Driving Cars in 2016
The ride-hailing company’s chief approached Elon Musk to work together, according to an upcoming book.
The discussion came after Apple Inc. invested $1 billion in Didi Chuxing, then a fierce competitor of Uber in China. Kalanick pitched Musk on teaming up against Apple, according to Wild Ride, a book by Fortune magazine’s Adam Lashinsky scheduled for release next week.
“I said, ‘Look man, we should partner,’” Kalanick recalled in the book. “Elon spent the rest of the call convincing me that it’s too far out, and it’s not realistic, that I should just stick to what we do best and be focused, or I’m going to f--- it all up. That’s when I knew Tesla was competing.”
At the time, Tesla was rolling out the semi-autonomous driving system Autopilot to its vehicles, and work was already underway within Uber on its own self-driving technology. As Musk was playing coy with Kalanick, one of the Uber CEO’s top deputies learned from a Tesla executive that autonomous cars were a top priority for the carmaker, Kalanick said in the book.
Days after the call, Musk put out a 10-year plan for Tesla. The 1,500-word manifesto, published in July, included a proposal for an Uber-like ride-hailing service allowing Tesla owners to make money by renting out their robocars. A person close to Musk said he declined the partnership offer by Kalanick but that he didn’t attempt to dissuade the Uber CEO from working on self-driving cars. Spokesmen for Tesla and Uber declined to comment.
Uber works with Daimler AG and Volvo on self-driving cars, but Kalanick has long expressed admiration for Tesla. Steve Jurvetson, an investor in the automaker, said in 2015 that Kalanick wanted to buy 500,000 Teslas if they were fully autonomous by 2020. Uber has since given up the battle with Apple in China by selling its business there to Didi.
As Uber has been mired in crises this year, senior management and investors have begun to look at Tesla with envy. Musk has gotten relatively little pushback for his associations with President Donald Trump, while Kalanick faced a boycott. Another scandal at Uber involves its self-driving car program. It’s trying to fend off a lawsuit from Alphabet Inc. saying Uber’s project benefited from stolen trade secrets. Uber denies the claim. Alphabet said this week it’s working with Lyft Inc., the main rival to Uber in the U.S., to test autonomous cars on the road.
The turmoil at Uber makes an initial public offering in the near term unlikely. It hasn’t stopped Kalanick from toying with the possibilities. In Wild Ride, he and his top dealmaker, Emil Michael, float various unconventional strategies for taking the company public in a conversation with the author. The book frames the discussion as one that shouldn’t be taken too seriously.
On a private jet last summer, Kalanick said Uber may not need investment bankers to go public, according to the book. Michael, who has overseen much of Uber’s fundraising efforts in recent years, said the company could instead conduct a reverse merger, in which Uber would buy a public company in order to list its shares on the market. Kalanick offered another idea: Instead of paying bankers 3 percent of the money raised, the company could donate the fees to charity. Uber is unlikely to puruse these avenues, a person familiar with the matter said.