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Standing Committee on Infrastructure, Transport and Cities
28/02/2019
Current and future developments in the use of land-based mass transit

MALLIGAN, Mrs Natalie, Head of Cities, Australia and New Zealand, Uber

WILLDER, Mr Richard, Public Policy and Government Affairs, Australia and New Zealand, Uber

[12:04]

CHAIR: We'll kick off again. I now welcome representatives of Uber to give evidence today. Although the committee does not require you to give evidence under oath, I should advise you that this hearing is a legal proceeding of the parliament and therefore has the same standing as proceedings of the respective houses. The giving of false or misleading evidence is a serious matter and may be regarded as a contempt of parliament. The evidence given today will be recorded by Hansard and attracts parliamentary privilege. I now invite you to make an opening statement before we proceed to discussion.

Mrs Malligan : Thank you, Chair and committee, for hosting us today. We're excited to have the opportunity to speak with you about the future of transport and our vision of how technology can help shape mobility in Australia. Uber started with a simple idea: use a smartphone app to push a button and get a ride, the basic premise being that the Uber match app matches someone looking for a ride with a driver partner looking to provide one. Now we see almost four million Australians regularly using Uber's apps to get a ride from A to B or dinner delivered to their home, supported by over 80,000 Australians accessing flexible earnings opportunities. From Cairns to Perth, you can now use your phone to request a safe, affordable and reliable ride in 39 cities across Australia.

But our vision for ridesharing is just the beginning. I want to touch on some of Uber's work in emerging technologies, starting with self-driving technology and then covering urban aviation. We believe that self-driving technology can help make transporting people and goods safer, more efficient and more affordable around the world. Like many of the other participants in this inquiry, we see the future of road mobility as shared, electric and automated.

We launched our Advanced Technologies Group in Pittsburgh in 2015 with a mission to introduce self-driving technology to the Uber network. As you may be aware, we're currently focused on developing safe self-driving technology through our trial program in the United States. We are building our self-driving network in two ways. The first approach is developing self-driving Ubers in partnership with Volvo. Uber is using select Volvo vehicles and adding on self-driving hardware—for example, lidar and cameras—and developing self-driving proprietary software. The second approach is developing a self-driving platform that will allow other companies to build their own technology and deploy it on Uber's network.

While we are very excited about the future of self-driving technology, it's important to be realistic about the time lines for a truly autonomous future. Even when the technology is ready, adoption will take time and depend on a number of factors. For the foreseeable future, we expect to see a hybrid model where both self-driving and driven vehicles form part of the network.

We are also working on shared rides above the ground through on-demand aviation. Uber Air is Uber's initiative to create a network of all-electric, on-demand, vertical take-off and landing aircraft that will integrate into the Uber platform. Just as riders can now push a button and get a car, in the future they'll be able to push a button and get a flight via Uber Air. We are working towards a goal of flight demonstrations in 2020 and commercial availability in 2023. Australian cities are on the short list as ideal trial cities alongside Paris, Tokyo, Mumbai and Sao Paulo. We believe on-demand aviation has the potential to change the way we think about urban transport and radically improve urban mobility.

However, given that these technologies are still some time away, in Australia we're increasingly focused on developing what we call Uber as a platform, our plan for an integrated future of transport where someone can push a button and get from A to B through multiple modes. For example, a customer journey in the Uber app could be the booking of a shared e-bike to the train station, the booking and payment of public transportation within the app, and an UberPool scheduled to pick you up at the other end. We believe integration of these public, active and shared modes of transport can offer a better journey than choosing to drive yourself.

We're focused on asking ourselves some of the bigger picture questions about the future of transport in Australia—for example, what happens if we apply innovative technology to existing transport networks? How can we extend the reach of fixed public transportation, complementing rather than cannibalising public transportation? Can tech like ours help solve the first mile, last mile problem by taking people to and from transport nodes? The short answer is that we see ourselves as part of the solution for each of these challenges, and we are also pleased to see support for transport innovations across a number of other submissions made to this inquiry.

However, unlike most, who are thinking about the 30-year horizon, we see our technology as being able to realise benefits for cities today. Uber is a real-life example of how technology is changing the way people move around cities, not in the future but now. A perfect example is that first mile, last mile problem and how we can help complement public transport and drive increased patronage by making it easier for people to get to and from transport hubs.

In the ACT, Uber has collaborated with Transport Canberra to provide Late Night Rapid bus passengers with a $10 discount if they use Uber to travel to and from bus stops, effectively extending the reach of the network.

In New South Wales, Uber was recently selected as a successful incubatee as part of the Transport for New South Wales Mobility as a Service Innovation Challenge. As part of this initiative, Uber, in conjunction with TfNSW, is piloting a program where riders who take an UberPool trip to or from the Manly ferry wharf within a defined geofence receive a flat $5 fare in addition to a 20 per cent discount on a connected Captain Cook ferry trip. This means riders can leave their car at home and save time trying to find a parking spot, helping reduce emissions and congestion.

We believe on-demand services can also help governments provide better access to transport in a cost-effective way. We're excited to share our submission and vision with you in more detail today. We're very pleased to be here and happy to take any questions.

CHAIR: Thank you very much.

Ms BIRD: Thanks so much for your submission today and your comments. One of the things we've been exploring is exactly what you've described: that intersection between private transport providers and a public transport system. Some of it is around, obviously, as you may have heard in the previous presentation, the physical connection—so coordinating and the sorts of case studies you've given us of your service connecting to public services, which then extend their capacity—and some of it is around the technology that supports that, how much sharing and interaction has to happen between systems, and the security and privacy issues around that. I'd just be interested in what you see as the emerging policy challenges around the two systems working together in that way. Obviously, the ACT people might be able to give some feedback on that.

Mrs Malligan : Yes. I think some of the challenges are just thinking about it in a different way—the thought that buses, when they're on trunk routes, when they're on very high density routes, are the most efficient ways often to get from one mode of public transport to another or from point A to point B. But thinking about the sharing of cars as a means of filling in transport deserts, filling in low-density routes, and the use of sedans for sharing as opposed to necessarily high-capacity vehicles—I think that shift in mindset is one of the challenges.

Another is around the integration that you talked about. In order to truly integrate public transport into the same technology platform, we need governments openly sharing data and sharing API access. That's something we're in open conversations about with governments around Australia. Actually, just recently we launched the first ever globally in Denver, where it's now fully integrated and you can see the full public transport timetabling within the Uber app. Very soon to launch will be actually being able to book and pay for your public transport in that app as well. But that obviously takes openness from governments to allow access to systems and to allow access to the payments and about some of the infrastructure challenges that go with that.

Ms BIRD: Also, are you addressing the issue around two levels: the individual person's concerns about privacy of their information—obviously, the capacity to have all this stuff integrated also means that there's the capacity for somebody to get into the system and get a whole lot of information—and, secondly, the system itself and its robust protection from ill-intentioned intervention?

Mrs Malligan : Absolutely.

Mr Willder : Yes, we take privacy incredibly seriously. We consider that, when users trust us with their information, it's absolutely paramount that we treat it judiciously.

Security of information is absolutely critical to our operation, and we integrate that holistically into the design and development process. In San Francisco our engineers very actively think about this, and we have leading teams who are very focused on ensuring the sensitivity of this information on our end. You're exactly right, though, that in conversation with governments as we begin to integrate those systems and think about sharing together it's going to be incumbent on both government and the private sector to work very closely together to ensure that that information is protected carefully, which is, frankly, exactly what consumers and constituents will expect.

Ms BIRD: You've talked about your carpooling idea. We've had various presentations about the increased likelihood of people—particularly with highly automated vehicles—instead of just parking and then getting on the train to go to work in the morning, having them available for other use. What do you see as the barriers to that sort of option, and what's your view on whether that actually just increases congestion problems rather than addressing them?

Mrs Malligan : We launched UberPool in Sydney and Melbourne almost a year ago now, so it's been in operation in both of those cities, and what we've seen is that, for the vast majority of those trips, you actually are getting more than one passenger in that car. So the match rates are very high. We've also seen fantastic opt-in of these services: around the 20 per cent mark in Australia. But, if we look overseas where these products have been operating for many more years, such as San Francisco, we see that up to 50 per cent of people requesting an Uber are actually requesting a shared ride. So that's what it can look like in a more mature model. It is a change in mindset. It is a behavioural change for consumers, so it does take some ramp up, but we have absolutely seen people opting into that. If you've got two people who would have been in two different cars now in one car, significantly reduces congestion.

The second point I'd add around that is on the micromobility front: the e-scooters and the e-bikes. You might be aware that Uber acquired the company JUMP in San Francisco, which operates both of these products. Since introducing these in San Francisco, we've seen an overall increase in Uber usage but a decrease in car usage. On those short trips and during highly congested hours—so peak times—we've seen very high uptake of scooters and bikes at the cost of a reduction in Uber rides. So people are taking cars off the road and replacing them with these micromobility solutions. So we see that micromobility and shared rides together are having a really significant impact on the reduction of congestion.

Ms BIRD: In terms of the pool of cars, are there implications around insurance and things like that? Are they some of the barriers that you have had to look at?

Mrs Malligan : All Uber trips are insured on the road. This is whether they're shared with another passenger or not.

Ms BIRD: Okay. So, instead of the individual person who owns the car having normal insurance covering that trip, it's actually the company's insurance that covers that trip.

Mrs Malligan : Every driver has their own insurance. They are required to in order to be on the platform. But we also have a contingent insurance policy should there be an issue with a pay-out under the driver's insurance policy.

Ms BIRD: Right. In terms of the first and last mile, which is obviously where the problem is that you're seeking to address by and large at this point in time, one of the things being raised with us is technologies like minibuses and so forth that are able to move around in suburban streets and then join up to major hubs. Is that a space that you're looking at as well?

Mrs Malligan : Yes. We have trials going on globally around the world at the moment in the high-capacity vehicle space using similar matching technology to the one we're using in sedans, but that's very much a bigger picture question that we're trying to answer. In what situations do you actually need a high-capacity vehicle versus in what situations will a sedan suffice, or is there a form of cross-dispatch model where it depends on the time of day or the demand on a particular route where you dispatch the right vehicle for the right demand at that time, be it a minibus or a sedan?

Ms BIRD: Yes. It would seem to me that, if you're looking at pooling options, there is that capacity to upscale that with good technology to run something bigger.

Mrs Malligan : Absolutely. We actually we have some trials on the road internationally at the moment and we could provide further detail on them if you're interested.

Ms BIRD: Okay. I go to self-driving technology. My understanding of your model is that it's people who own cars who buy into the service. Are you talking about a service where the self-driving cars are provided by you? How does the economics behind that model work?

Mrs Malligan : We're exploring lots of different models. We have a partnership with Volvo where we're developing our own cars. We're also likely to open the platform to any other company who has developed their own self-driving technology to dispatch those cars on our system and also different fleet models as well. So the final business model has not necessarily been locked down, but we very much see ourselves as a platform rather than necessarily just providing our own self-driving technology.

Ms BIRD: On the other area of your innovation, Uber Air: one of the things that we've been discussing is that technology advances faster than the community's capacity to deal with it. The classic example is the controversies around drones and so forth currently. What's your experience in this innovation with those broader planning and public amenity types of issues.

Mrs Malligan : Yeah. So our global team have been down here a couple of times talking with CASA and trying to nut all of those things out. It's obviously a very technical space and I'm not super close to the detail, but I know that there's already significant engagement going on with government bodies around this.

Mr Willder : To add to that: we really see the development and rollout of these technologies as a partnership with cities at federal, state and local government levels. We really want to engage very deeply with regulators, government bodies and communities to ensure we're delivering a solution that's fit for purpose. We're very actively engaged in conversations around the world to ensure that we are providing a solution that's appropriate for the communities.

Ms BIRD: One of the things that's been said is that governments need to be thinking ahead, talking about the sort of city that they want and then engaging with people like yourselves because you've got a vision and an idea of what you want. Do you think we're well enough advanced in that, or are there some policy areas in which we could do better in being prepared for these sorts of approaches on innovation?

Mr Willder : Just talking specifically to the Uber Air example, we've found that the Australian regulatory environment and Australian partners have been incredibly progressive in their in their conversations with us about how they see this technology and their eagerness and passion to work with us to develop mutually agreeable solutions that are valuable to the broader community. We've found them to be in that instance very close to it. Further, when we've had international visitors on broader transport matters to Australia, they have similarly been impressed at the degree of experience and nuance taken to the planning process in Australia. We've found that cities are very engaged in it. I think that, from an industry perspective, it's just an area we're keen to continue being very actively involved in and part of that dialogue.

Mrs Malligan : I think it's actually it's one of the key reasons why Australian cities are on that shortlist. One of the key determining factors of where our headquarters will decide the best launch cities are is where they feel there are governments that are willing to work with us for workable solutions.

Ms BIRD: Okay, thank you.

CHAIR: When somebody is willing to share a ride, what is the incentive to price-wise?

Mrs Malligan : It's significantly cheaper. Right now it's up to 50 per cent cheaper to take an UberPool versus a normal Uber. Obviously the price can change depending on time of day, the likelihood that you actually will share a ride versus not, in which direction you're going et cetera. All of the pricing is up-front, so the rider will know before they take the trip what the price is going to be.

CHAIR: So even the willingness to share the ride—do you get a discount for that?

M r s Malligan : Yes.

CHAIR: Just on the Manly ferry shared ride: you will deliver someone to their home within a certain radius?

M r s Malligan : Yes.

CHAIR: At $5, and that comes down to $4 if they've come off the ferry?

M r s Malligan : No. It's on the road right now. The Captain Cook ticket is where you get the discount. So there is a $5 flat fare for the Uber trip and then, if you catch a Captain Cook, Captain Cook will give you 20 per cent off their ticket when you show proof that you have ridden to or from—

CHAIR: Okay. Excuse my ignorance, is it Captain Cook that runs the Manly ferry?

M r s Malligan : They run the Manly to Barangaroo route. There are different ferry providers: there is My Fast Ferry and the state provided ferries. The $5 applies no matter what you do. When you get to the ferry wharf, the Captain Cook discount is additional, on top of that Captain Cook—

CHAIR: And that may involve sharing that—

M r s Malligan : It is UberPool. It's on the road right now. If you take a UberPool it's $5.

CHAIR: Did I understand that you may be looking at blending your Uber sedan service with a larger vehicle to feed a fixed transport hub?

M r s Malligan : Right now we have two different products globally: we have UberPool, which is the sedan version, and we've also been trialling globally the high-capacity vehicle version—so, the minibus version of matching.

CHAIR: Which seats how many?

M r s Malligan : It depends on the particular trial and what vehicles are used.

CHAIR: But something like a Toyota Coaster—a 20 capacity or something like that?

M r s Malligan : Something like that, yes. And then the vision down the track is to ask how you integrate both of those modes so that you're using high-capacity vehicles when they're needed but you're only using sedans when you don't, for example.

CHAIR: Yes. The experience in a lot of Australian suburbs, where we have our sprawl, would be very different to a lot of other cities in other parts of the world, maybe with the exception of the US. Does the strategic development of your product seek to address that plight, to get people from their homes that first mile, last mile?

M r s Malligan : Absolutely, we have a lot of data. We spend a lot of time in the data, trying to understand what the density is of trips that we already see on Uber to or from a particular transport node, for example, to see what the demand might look like. What is the density? How much overlap is there in routes to understand likely matching? Is UberPool going to work? Are we going to see significant overlap in people's journeys so that we're going to end up with an economic model that would work and where we'll end up with more than one person in the car? We run simulations and things like that to try to understand what the uptake is going to look like and what match rates are going to look like in those areas.

CHAIR: Can you build habitual travel into that? You might have four people within quite a small area who don't know each other but who UberPooling is actually going to put together, and maybe for three out of the five working days they would all share the same vehicle. Would that be a—

M r s Malligan : Our analysis is usually more aggregated than that—looking at much higher volumes of numbers over the week—particular days and times et cetera. But, yes, we do look at people moving within a defined period: how many are there and how much overlap is there on routes, for example.

CHAIR: And the advent of autonomous vehicles, I would imagine, would be a boon for your operation?

M r s Malligan : We envisage that it would operate in a very similar way, in terms of being on demand, being shared and being pooled. Obviously, there are economic efficiencies as well, given that there's not necessarily a driver in all instances. But there are also huge safety benefits that we see as well, once the technology has developed over time. But in many ways it will operate very similarly to the existing service in being on demand and shared.

Mr Willder : We certainly see the future of autonomous vehicles and the rollout here as part of a broader fleet model, where it's used as part of an integrated shared platform. That's our primary value proposition in how we would add value to that chain as a technology provider.

CHAIR: So the opportunity would be for a person who is currently an Uber driver, a contributor, to actually dedicate their vehicle to the UberPool or, at times, use it for their private vehicle, drive it to the train station, go on to work and give their autonomous vehicle over to Uber for the next umpteen hours until they need to come back. Would that be possible?

M r s Malligan : Yes. The business model hasn't been locked down yet, as to whether it would be private individuals offering their cars versus companies offering fleets of vehicles, for example, on the app. That hasn't yet been worked out, as to whether it's an individual vehicle model or a B-to-B model.

Mr Willder : On the autonomous front, for example, with a partner like Volvo, once those vehicles are developed—and we also have a partnership with Toyota—they might have a pool of vehicles that could be deployed on a platform like Uber, in the first instance, to complement the existing fleet in the market at the moment.

CHAIR: Is Uber Air designed with densely populated areas in mind, or more regional areas?

M r s Malligan : It's designed, mainly, for getting to a CBD, like from an airport to the CBD, or from places like the Central Coast or Western Sydney to the CBD, for example. So high-frequency routes, but where there is a lot of congestion and quite a bit of distance, for example. It would be much faster to get from those nodes to the central business district.

CHAIR: What's the nature of these vehicles? Do they actually exist at the moment?

M r s Malligan : There have been trials. We've been working with a number of different partners and those trials are happening at the moment.

Mr Willder : One of our partners, Boeing, has recently done a demonstrator flight in the United States. And Bell, another one of our partners, has unveiled a prototype model at the CES conference in the United States earlier this year.

CHAIR: Sorry, I feel like I've been living in a cave, because I'm unaware of this! They're a sort of electrified helicopter of some description?

Mr Willder : Electric vertical take-off and landing vehicles. They're quite a unique design. I'm happy to provide some more information afterwards which gives some detail into exactly what they look like.

CHAIR: Good.

Mr Willder : They're uniquely designed vehicles that are very different in technical specifications to existing offerings in the market—for example, a helicopter or a plane. They're quite uniquely different.

M r s Malligan : And they land on the top of buildings in the CBD.

CHAIR: And because they're propelled electronically you don't have the noise problem of a helicopter?

Mr Willder : And they have distributed propulsion, so rather than having one rotor, like a helicopter, for example, they have multiple.

CHAIR: These vehicles carry how many people?

Mr Willder : Four to five.

CHAIR: Okay—fascinating.

Mr Willder : Obviously, we're still in no way the best-placed people to give you information on this one in the immediate term, but it's a fascinating piece of work that we're undertaking. We have very active conversations around the country and around the world on what that would look like. The idea would be to begin demonstrator flights in 2020, with a view to looking at commercial operations in 2023.

CHAIR: And the cost per mile—how does it compare with ground transport?

Mr Willder : The economic modelling is quite extraordinary. At the time of launch, we would see the price being—

CHAIR: Literally, 'launch'!

Mr Willder : Quite right, literally! At the time of launch, it would be equivalent to the cost of an Uber Black—our premium luxury car offering. For example, just to give a practical case study, a Melbourne-airport trip would cost about $100 in an Uber Black at the moment. So an airport trip in an eVTOL would cost $100, or around there, the first time. Details haven't been worked out exactly, but that's what the modelling shows.

Over time, as we start to introduce scale into that marketplace, the price reduces even further. We see a future where, at scale, it would be around the same price as taking a regular Uber X.

CHAIR: Fascinating. Sharon, do you have any more questions?

Ms BIRD: No, thanks, Chair. It's very comprehensive. It's good, thank you.

CHAIR: It is absolutely fascinating that your business is really pursuing the very essence of what we're looking at, and gaining various efficiencies. It seems very much that this is like a private-public partnership of integrating; it's using your type of business—not that there's anything else like your business; you're one and alone—to feed our fixed-mass-transport systems and to do that as efficiently as possible. It's fantastic that you've come and provided your evidence today, because it is so relevant. Do you have anything else that we've omitted to ask? We're down to 1½ people here—Sharon is half capacity!

Ms BIRD: Thank you for the deflation of my capacity to a half!

CHAIR: Yes, well, you're not operating on all eight cylinders, or whatever you want to call it, but it's fantastic that you've been able to stay with us.

Ms BIRD: No problem.

CHAIR: Do you have anything else that you'd like to offer?

M r s Malligan : No.

CHAIR: Well, thank you very much for your attendance here today. If you've been asked to provide additional information, which I think you have, would you please forward it to the secretariat by Wednesday 6 March. You'll be sent a copy of the transcript of your evidence and will have an opportunity to request corrections to transcription errors.

Proceedings suspended from 12 : 36 to 13 : 35