Uber Regains Its “Moral Compass” and Establishes a Safety Culture After Tragedy Shakes Its AV Ambitions
After my book The Future is Autonomous launched, Uber sold the Advanced Technologies Group responsible for the testing and deployment of its autonomous vehicle fleet for a $400 million investment in start-up Aurora Innovation, Inc. on December 7, 2020.
However, the steps that Uber took to create a “safety culture” and the emphasis it placed on creating a standard for the industry to test autonomous vehicles is still relevant and important. The “Fleits” financial model could also still be an option for companies seeking to create a ride-hailing “robotaxi” fleet.
The question posed by the fatal collision between Uber’s test autonomous vehicle and Elaine Herzberg is still ongoing. While Uber as a company was not held criminally liable, the vehicle operator behind the wheel of this vehicle has been charged with criminal negligence, but her case has not yet made it to trial.
Uber Emerges from Tragedy to Restart its Autonomous Vehicle Program
On Sunday evening on March 18, 2018, an Uber autonomous test Volvo XC90 SUV struck and killed forty-nine-year-old Elaine Herzberg. She was walking across the street with her bicycle outside of a crosswalk in Tempe, Arizona.
According to the National Transportation Safety Board’s (NTSB) report of the incident, the SUV had three sensors — radar, LiDAR, and camera — designed to detect an object and determine its velocity. However, the vehicle could not determine whether Herzberg was a pedestrian and failed to determine her path and velocity. According to the report, “The system did not include a consideration for jaywalking pedestrians.” Computer engineers at Uber failed to program this very common “edge case” scenario into the system’s driving algorithm and this failure resulted in a woman’s death.
There was a backup driver behind the wheel who could have taken control of the car. The report mentions 1.2 seconds before the crash, the system recognized Herzberg as a bicycle and not a pedestrian. By then it was too late to safely brake and avoid a collision. According to The Arizona Republic, Rafaela Vasquez was watching an episode of The Voice on her cell phone while operating the vehicle.
Uber CEO Dara Khosrowshahi tweeted his condolences the following day. He wrote, “Some incredibly sad news out of Arizona. We’re thinking of the victim’s family as we work with local law enforcement to understand what happened.”
Uber offered to pay for the victim’s funeral, but this was a weak statement of regret. It never mentioned her name and described the accident like a PR news release with little emotion or believable empathy for her family. This fatal accident badly damaged the American public’s already shaky trust in autonomous vehicles. It brought up many questions about civil and criminal liability as well as whether the vehicle itself was safe enough to be on the road.
Almost a year later. in early March 2019, the Yavapai County Attorney’s Office prosecutors declared Uber as a corporation did not commit a crime in the fatal crash. However, on August 27, 2020 prosecutors from the neighboring Maricopa County, Arizona charged Ms. Vasquez with criminal negligence She appeared in court for the first time on September 15, 2020 and the trial is set to take place in February 2021.
After the crash, Uber suspended its autonomous vehicle testing on public roads for nine months. Herzberg’s family chose not to sue Uber, which is a welcome sign for companies in the autonomous vehicle industry. However, they did sue the city of Tempe for ten million dollars. This lawsuit could have long-term implications for the industry. Cities might not want to risk losing millions of dollars in lawsuits by allowing autonomous vehicles on their public roads.
This incident also raises questions about the lack of federal regulations and safety standards. Unfortunately, these are still open questions today. According to Ethan Douglas, senior policy analyst for Consumer Reports, “We hope Uber has cleaned up its act, but without mandatory standards for self-driving cars, there will always be companies out there that skimp on safety.”
Bills have been introduced since this incident in both the US House and Senate to create federal safety regulations for autonomous vehicles. However, neither bill has been passed to enact the laws. Therefore OEMs, universities, and other autonomous vehicle companies are forced to deal with a patchwork system of many different state and local laws which form a confusing and occasionally contradictory regulatory framework.
This chapter discusses Uber’s turn to autonomous vehicles to become profitable. It describes the safety standards enacted by Uber in response to the first, and only, fatal collision involving an autonomous vehicle in the US. Uber has also encouraged other companies in the industry to adopt standards for safety in the absence of federal regulations. Finally, this chapter outlines the innovative new financial model Uber’s CEO Dara Khosrowshahi has proposed to finance the company’s autonomous vehicle fleet. Because of the media attention related to accidents involving autonomous vehicles, companies in the industry need to be more proactive in demonstrating their commitment to safety. A more coherent and unified approach will be necessary in the future for the autonomous vehicle industry to succeed.
From an Iranian Exile to the CEO of Uber, the World’s Largest Ride-Hailing Platform
Uber had the right man to navigate through the difficulties of the fatal accident with their CEO Dara Khosrowshahi. This was not the first time he had to deal with scandal and disruption to his life. He was born on May 28,1969 to a wealthy family in Iran. His family founded the Alborz Investment Company. Under his father, this company became an investment conglomerate involved in pharmaceuticals, chemicals, food, distribution, packaging, trading, and services.
In 1978, when Dara was only nine years old, and one year before the Iranian Revolution, his father was targeted because of his wealth. His mother decided to flee the country with Dara. They were forced to leave everything behind. After the Iranian Revolution, Alborz was nationalized, leaving their family with no money.
His family first fled to southern France. They wanted to eventually return to Iran because Dara’s father thought the Iranian Revolution would fail. When the revolution did not fail, the Khosrowshahi family moved to the US and lived with Dara’s uncle in Terrytown, New York. Dara achieved his first academic success when he was admitted to Brown University. He graduated from Brown University in 1991 with a BS in electrical and electronics engineering.
His degree was in electrical engineering, but Khosrowshahi chose not to become an engineer or develop new electronics technology. Instead, he followed in his father’s footsteps and joined Allen & Company as an investment analyst. There he advised his clients about their respective business.
Khosrowshahi continued to work as a business and financial consultant and was later promoted to senior executive positions at the companies he worked for. His meteoric rise in the business community continued when he was promoted to CEO of Expedia in 2005. Ten years later, recognizing Expedia’s gross value of its hotel and other boking services more than quadrupled from the time he took over as CEO, he was given ninety million dollars in stock options to keep him at the company.
His work in investment would prove to be invaluable later in Khosrowshahi’s life when he devised a plan to finance Uber’s autonomous vehicle fleet. His early work as an analyst exposed him to many different business and financial models to advise both small and large companies. His work as CEO of Expedia gave him experience leading a global company. The company provides consumers with a way to make reservations for hotel, airline travel, and car rentals, all from one location. Expedia gave him the experience of optimizing the business-to-consumer strategy that would make him ideally suited to take over as Uber’s CEO.
Khosrowshahi joined Uber as their new CEO in August 2017. Why would he leave Expedia, where he had so much success? Maybe he was bored with his current job and wanted a new opportunity, or to take on a new challenge. Or maybe the 45.3-million-dollar salary plus forty million dollars in stocks was just too enticing to ignore. Whatever the case may be, he was entering a situation requiring all of his training and skill for the company to survive.
Following allegations of widespread sexual misconduct and discrimination in Uber’s executive offices, their former CEO and founder Travis Kolanick stepped down. Khosrowshahi claimed Uber’s “moral compass” was missing under Kolanick’s leadership. Khosrowshahi then appeared in ad campaigns and worked tirelessly to regain the public’s trust and plan for the company’s future.
Uber’s switch to autonomous vehicles was still in its early test stages at that time. From a business planning point of view, the idea of this switch was appealing considering the money that could be saved by not needing a driver in the vehicle. However, this idea was controversial with people worried about autonomous vehicle’s impact on the potential job losses of the ride-hailing and delivery truck drivers.
Even potential passengers would need to be convinced as well. I interviewed Karolina Chachulska, director of customer experience and growth at Infoedge. She said companies should first focus on near-term use cases like for food and grocery delivery with UberEats. She mentioned using a “robotaxi” would probably need to wait because “human expectations are way, way higher. Especially since most of the Lyft and Uber drivers are really good at getting us from point A to point B.” This was a sentiment shared by several other people I interviewed for this book.
As a business model, the decision to turn to autonomous vehicles does make sense for Uber in the long term. Khosrowshahi began to plan for this future after he re-established the company’s “moral compass.” He also needed to resolve the year-long legal dispute surrounding the hiring of former-Waymo executive Anthony Levandowski and allegations of intellectual property theft. A settlement was reached after five days in court in February 2018. The agreement favored Waymo. Uber guaranteed never to use Waymo hardware or software intellectual property in any of its future vehicles. Uber would also pay Waymo 0.34 percent of its equity, valued at approximately two hundred forty-five million dollars. While this was a blow to Uber, it was not as bad as the billion-dollar settlement Waymo sought initially.
Uber’s Effort to Create a Safety Culture and Industry Standards
After eight months of not testing its autonomous vehicles on public roads following the fatal collision, Uber released a safety report. The report stated that since the accident, Uber engineers were working on “reducing the latency,” or the delay between when an object is recognized and when an action is taken by the vehicle. Khosrowshahi also said there is pressure for companies to stay silent about their technology in this highly competitive push to develop and produce autonomous vehicles. Uber wanted to join with its competitors to find ways to “measure and demonstrate” autonomous vehicle performance. He also said he hopes to encourage “a culture of transparency rooted in safety” within the autonomous vehicle industry.
Was this just pandering or did this indicate a genuine desire to reform Uber and the industry’s strategy an attitude toward safety? The report and the statements from Khosrowshahi were vague, so it really was not clear.
It wasn’t until I listened to two plenary discussions by people from Uber’s Advanced Technology Group (ATG) at the 2020 Automated Vehicle Symposium (AVS) from July 28 to 31, 2020 that I learned about the changes Uber made following the fatal accident. Christopher SanGiovanni, director of organizational safety management at Uber ATG, discussed the massive organizational changes made by Uber to create a “safety culture” in the “Lessons Learned from Uber Crash” plenary discussion on July 28, 2020.
Mr. SanGiovanni described how the accident was devastating to Uber as an organization. They needed to dig deep, have a lot of introspection, examine any contributing factors for the accident, and keep the focus entirely on themselves. What organizational failures led to this accident and how can they make changes to try to avoid similar failures in the future?
Uber conducted an entire safety review with external support from the NTSB, the same government organization which created the report from the fatal collision. The review was very extensive and examined everything from the organizational structure, who reports to who, down to the safety operator in the driver’s seat during test runs of the autonomous vehicles on public roads.
For organizational changes, Uber fostered a culture of openness and transparency with issues related to safety. The safety department became more proactive in gathering data related to safety and there was a continued educational emphasis on safety for every department within the organization. The safety department was made independent from the Operational Safety Division and communicated any concerns directly to the CEO.
Not only was training increased and another vehicle operator added to the autonomous vehicle during test runs on public roads, but their name was changed as well. Vehicle operators were now referred to as “mission specialists.” This led to greater pride in their work, more compensation, and they received the same perks and benefits as other employees. Similar to aviation, these “mission specialists” would go on “missions” instead of test runs and were given “command authority” like a pilot.
Not related to the organizational changes focused on improving safety for Uber ATG, but still vital, was the emphasis on testing on public roads. According to Mr. SanGiovanni, “Prior to the crash, the goal was to log as many miles on public roads as you can.” Following the crash, however, he stated they would only test the vehicles on public roads when it was absolutely necessary to prove the testing was done in computer simulations and on private tracks.
Testing procedures are another area of weakness in the policy framework governing autonomous vehicles in the US. California alone has approved sixty-six permits for autonomous vehicle testing on public roads. NHTSA has twelve policy guidelines for testing on public roads, but compliance is cursory and there are no safety parameters. Submission of safety reports is also voluntary and there have only been twenty-three submissions. The detail of these submissions also varies based on the company submitting them.
With no federal mandates for testing, Uber and other companies have pushed for the adoption by companies of Underwriters Laboratories (UL) 4600. I became aware of UL 4600 in another plenary discussion at the AVS 2020 called “UL4600: Industry Approach and Applications.” UL4600 creates a robust standard for a safety case-based approach to testing. According to Director of Uber ATG Safety Standards Chris Mullen, this approach is their goal and he states, “The safety case is a structured case that ensures that the risk of harm has been reduced to an acceptable level.”
Autonomous vehicle technology is still relatively new. ISO 26262 functional safety standards describe benchmarks for the functional safety of the technology itself. For example, as Brian Jee described, the automotive ethernet cables are a very robust technology that can effectively send massive amounts of data at incredibly fast speeds. Therefore, it would meet the standards of the ISO 26262 functional safety standard.
UL 4600 does not preclude companies from following other safety standards but serves as an additional benefit to existing standards. It creates robust standards for testing based on a continuous feedback loop. It is relatively unaffected by large changes in technology, even though it is still updated every year. Ms. Mullen indicated Uber ATG uses UL 4600 and Uber pushes for other companies to use it as well. They want to create standardization of testing currently lacking within federal regulations. This would build the public’s trust in the technology and create more certainty for industries such as the auto insurance industry.
The organizational emphasis on safety by Uber, the independence of the safety department with direct lines of communication to the CEO, and the changes to the vehicle operators indicated Uber’s complete overhaul of the “safety culture” throughout every aspect of the organization. Since stringent federal guidelines and regulations were absent, the next step would be to attempt to ensure these, or similar, changes were adopted by companies in the industry as a whole. After reestablishing Uber’s “moral compass” and overhauling the organizational structure to create a “safety culture” following the fatal collision, Khosrowshahi would need to create the financial structure to support Uber’s autonomous vehicle ambitions.
After restoring Uber’s “moral compass” following the sexual misconduct and discrimination allegations and creating a “safety culture” Uber needed to turn to the more difficult task of creating a profitable company. He would also need to devise a plan for a fleet of autonomous “robotaxis” This will be the subject of the next article in the article series.
If you are interested in learning more about the steps that other companies have taken to create a safety culture or business models they seek to use for autonomous vehicles, read my book, The Future is Autonomous!
Link to my book on Amazon: https://www.amazon.com/Future-Autonomous-China-Develop-Driverless-ebook/dp/B08PVRL38J