Thursday, May 7, 2015

Autonomous (The Self-Driving Future)

What you see above is the Freightliner Inspiration: the world's first road-worthy self-driving truck. It was issued a driver's license today in the state of Nevada. It will--assuming the story (MSNBC*)  is accurate--have a human driver "in case of an emergency" but it is the technology of the future brought forward today. The future--which The Omnivore had placed at 5 years off--is here. In terms of 'disruption' this is a hammer-blow to the American economy, way of life, and perhaps even our spirit itself.

The Shape Of Things To Come
The Omnivore has been tracking the sign-posts for this future for a while. Here are some points on a line.

The Facts
Here are some things you should know about cars:
FatalitiesA total of 32,719 people died in motor vehicle crashes in 2013. These deaths occurred in 30,057 crashes involving 44,868 motor vehicles. This was a decrease in deaths, fatal crashes and motor vehicles involved in fatal crashes compared with 2012. It was the second-lowest number of fatal crashes and crash deaths since 1975.
Unintentional Injury is the #4 leading cause of death in the US, #1 for age-brackets 1 to 34 years. Car accidents are about half of that, coming in at around 33k deaths per year in the US.
Insurance: The average cost of car insurance in the US was $907.38 in 2014 (although for a 19 year old male, the cost is over 2100.00). Compare to home insurance: $978 per year. Automotive insurance is a 220bn dollar industry employing around 277,000 people.
Cost: The average family spends around 9k a year on "transportation" (owning 1.9 vehicles). Compare this to 17k on housing (the highest) and 6k on food (the next highest). The average price of a new car is 31k and the 'average price' is climbing. A break-down (har-har) of the cost is around $408.00 per vehicle on repairs per car and 1007.00 on gas and oil. Here is a visualization of car/truck types and how they are selling.
The Status-Quo Future: According to a study released by the Department of Transportation shows us a future that is horrifying. Crumbling traffic-based infrastructure (it gets a D+), a boom in older drivers, and a massive increase in road-based freight gives us a future where mega-traffic jams and absurd commutes are a way of life.

Uber / Lyft And The Rise Of Distributed Taxis
Uber and Lyft are two of the big-name competitors in the distributed "taxi" space wherein 'employees' sign up (go through a vetting process) and then use their own private vehicles to ferry passengers around at much lower rates than traditional taxis. Enabled by smart-phone technology, these companies have huge growth potential although the profits the drivers see are often not as good as what's advertised.

Still, what Uber and Lyft do is provide an convenient, cost-effective alternative to owning your own vehicle. They are reliable, easy to use, and the transaction is designed for maximal ease (payment and receipts are all handled electronically, etc.).

Uber and Lyft can service residential neighborhoods where calling for a taxi would be tremendously expensive (since a traditional taxi only has a few specific points it can pick someone up if it is not operating in an urban area).

The Future: Driver-less Taxis
Uber/Lyft are the emerging tip-of-the-iceberg: they are the human-enabled version of what technologists are driving towards: fleets of unmanned vehicles that use an Uber-like interface to provide vehicles in close-to-real-time for people who need them at a fraction of the cost of owning one. This future projects massive efficiencies cost-saving, car-utilization, and, if the technology works, safety.

A study that proposes replacing New York's 13,000 yellow cabs with 9,000 self-driving cars shows the price going from $4.00 per mile to less than .50 cents. This would, of course, impact some 50k people's jobs--and Taxi Driver is not a horrible job--but the pay-off would likely be one the city itself would want to make even so.

Enter The 'Goober' Scenario
Google sat on the board of directors--and invested heavily in Uber. That was all well-and-good until it looked like their self-driving car project is designed to deliver the Taxi-Swarm which would, well, replace Uber. While time-tables, capabilities, and how-well-it-would-really-work questions have yet to be proposed, let alone answered, it appears that the information Google has gleaned from Uber is probably sufficient to give them a clear-eyed view of what such a venture would look like.

Google does not have a great track-record with product launches and hardware in general--but they their coffers are deep and they certainly know how to navigate things like regulatory waters and the creation of efficiency-driving algorithms which would be central to the Goober-Swarm's ability to deliver.

Also: There's an 'Ap' For That
In this case, 'Ap' stands for Apple. Apple has a secret project code-named 'Titan' which has been harvesting talent from automotive companies, Tesla, and electric battery makers. It is happening at a secret location near Apple HQ and the word is that they're creating an "Apple Car." While the specifics are unclear, the rumors are:
  • Mini-van like appearance
  • Electric Powered
  • May be self-driving
Whatever Titan is really about, Apple's entry into the automotive space under the helm of Apple design Jedi Jony Ive (who is both obsessed with cars and brought us the signature Apple Products) seems likely to be impactful. If they don't deliver a Taxi-Swarm, they may very well deliver high-but-not-too-high end self-driving family vehicles that would boast a for-real 21st century user-experience. Maybe it'll have one button: 'Go' that takes you where you most need to be?

Apple is not known for failed product launches and if Titan is as big as it sounds, there will be perhaps the richest company in the world's money behind it.

What Happens Next?
While the time-lines here are very foggy (we see self-driving cars appearing today in prototype from companies like Lexus and Apple's car is rumored to launch in 2020) one thing is clear: this--or something like this--is happening. Regulatory issues are being ironed out. Technology is being, erm, road-tested. Certainly the big auto-makers have to be looking into the future and planning their responses. One thing is certain: whatever the car of 2030 looks like, it'll exist in an entirely different environment than today. How come?

The first reason is societal: the current trends in driving imply that America is losing its car culture anyway. Millennials don't drive like their parents did and their parents (the Baby Boomers) are getting older and therefore driving less. Combine this with lack of car ownership by many in-debt, under-employed young people, more traffic on less well up-kept highways, and patters of employment that work against commutes and you get less need to drive. The massive rise of telecommuting is also making car ownership less imperative than it used to be.

The rite of passage of learning to drive may be replaced with staring at your phone as a Johnny-Cab whisks you around town. That sounds like something young people would prefer anyway. The Johnny-Cab will come with its own high-speed hot-spot just in case.

The second reason is that the economic infrastructure around cars is going to be changed significantly by any portion of this technology. The anti-crash stuff will alter auto-insurance hugely. Electric cars will change the gasoline economy and supply chain. New players like Apple, Google, and Tesla will compete dramatically with the traditional auto-industry. All of this is disruptive. Some of it hugely so.

The advent of a self-driving truck, essentially five years early, is a sea-change in the American way of life. Now, maybe the tech-test here is an aberration--maybe it won't work so well or the conditions of Nebraska (a low-traffic state) will not be replicable elsewhere--but this is, as far as The Omnivore is concerned, like a working iPhone showing up in the late 1990's.

In the near future, everything from JiffyLubes, to tire stores, to gas stations may be diminished and geared towards a few die-hard drivers rather than the masses (whose self-driving Ubers are serviced at "The Hub" instead of private businesses). NASCAR may become more antiquated--like horse racing: a betting spectacle perhaps rather than a "sport." 

Today, for the first time, The Omnivore used Uber. It was fast, cheap, and friendly. The two Uber drivers were slightly chatty (and both pretty new)--but the service was efficient, clean, and trouble-free (even when The Omnivore had to change his destination as the car pulled up).  The total cost was around 15.00 for driving a moderate distance in two legs--a cab would have easily topped three times that and been much slower to arrive.

Uber is really on to a model that delivers value. Self-driving Ubers might, actually, compete with car ownership. If The Omnivore could reliably have a ride waiting every morning, on time, to take him to and from the gym--or to go to the grocery store in an 8 minute call-to-arrive time (which is what Uber took)--if the cost was 1/10th what he paid today (or there was a Netflix like service that would ferry The Omnivore around town wherever he needed to go for, say, 10.00 per month?)--that would compete with ownership. It would compete with varying gas prices, periodic repairs, and the hassle of buying a new car (The Omnivore made the terrible mistake of putting his personal information into TrueCar and to see what a car he was interested in would 'really' cost and was deluged with telephone calls and emails during the day--during working hours--by people who really, really wanted a sale).

The self-driving future will miss some things: cruising, the first-car junker, maybe learning some change-a-tire repair skills? It'll lack muscle cars and The Omnivore supposes this means Drive Ins and Roller-skate car-side service restaurants aren't coming back either . . .  but not having to worry about your children driving drunk after a party or being hit with an 800.00 bill for "all four tires" at an inopportune moment would be nice. Telling the auto insurance companies to go stick it wouldn't suck either.

The future that's coming towards us is a mixed bag--but on the whole, probably cheaper and safer if a little less cool.

* A parody news source combining real and fake news

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