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There are four waves of innovation sweeping through the automotive industry that will disrupt vehicles more in the next 10 years than they've changed in the last 100.

Each week, we explore connected cars, electrification, changing ownership models, and autonomous self-driving vehicles, as we seek to understand and prepare you for the future of transportation.

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Apr 25, 2019

EP008 - ICRS Recap and Industry News

http://www.vehicle2.getspiffy.com

Episode 8 is a news-focused episode, recorded on April 25th, 2019. We start off with a recap of last week’s International Car Rental Show (ICRS) from Karl Murphy, President and Co-Founder at Spiffy. After talking with Karl, Scot dives into a variety of recent news items, including:

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The four pillars of Vehicle 2.0 are electrification, connectivity, autonomy, and changing ownership models. In the Vehicle 2.0 Podcast, we will look at the future of the auto industry through guest expert interviews, deep dives into specific topics, news coverage, and hot takes with instant analysis on what the latest breaking news means for today and in time to come.

This episode was produced and sound engineered by Jackson Balling, and hosted by Scot Wingo.

 

Transcript:

Scot:

[00:51] Welcome to the Vehicle 2.0 Podcast. This is Episode 8 and it's being recorded Thursday, April 25th, 2019. Welcome back Vehicle 2.0 listeners this week on the show. We are going to take a break from all the guests we've had on. We've really enjoyed and learned a ton in the last arc of gassed. And we're going to cover some news here in the automobile industry related to Vehicle 2.0 in last week's episode seven, we had Chris Brown from Bob Business Media and he is the editor of auto rental news where they think a lot about the changing ownership models out there. And if you recall, he curates the international car rental show, also known as ICRS. First, uh, to kick off this news episode, we have the co-founder of spiffy our very own Karl Murphy and he's gonna give us a trip report, a fresh off the heels of his trip to Las Vegas last week to the show. Welcome to the show, Karl.

Karl:

[01:52] Thanks Scot.

Scot:

[01:53] So you were in Vegas last week at the trade show. It's our first time ever going to this trade show. We were a, uh, we were an exhibitor, um, and uh, you know what? Uh, so it was a great show for spiffy and enjoyed a really exhibiting there. Uh, but that's not what we want to talk about today. What are, I know you were able to peel away and see a bunch of the content. Um, what were some of the trends and topics going on at the show?

Karl:

[02:16] Sure. So it's, uh, an interesting show. It had a mix of both large companies like Avis and Hertz and Ford and Toyota and small entrepreneurs. You know, companies like spiffy that makes software and entrepreneurs that have small fleets, maybe 10 or 20 cars and they're renting to a, uh, small Mitch. So it was interesting to talk to global companies and small folks. Um, it's uh, like three quarters us attendance and maybe 25% international. So we spoke to people from Brazil and Australia, Canada, a couple of Europeans were there. And so it's, it's interesting to get their perspective. It's, it's interesting, you know, um, their, their challenges are the same year. They all sort of a, from a vendor standpoint talk about the same things and want the same things.

Karl:

[03:01] Um, it was well attended. It was at the, you know, it was in Vegas at the Paris hotel in a, from a, from a provider's standpoint or vendor stand standpoint, really high quality attendees. It's like the people who showed up at our decision makers, they were running the fleet or they're the CEO or their, you know, sort of at a, at a corporate, you know, if they're smaller company, if it's a corporate level, it's sort of the, the decision maker or sort of one level away. So there wasn't a lot of um, you know, sort of distracting boost traffic, people looking for chotchkies and that sort of stuff. Nobody, nobody cared about our pens and penguins. They cared about our service and um, and sort of the things that we're doing to help fleet operators provide better preventative maintenance.

Scot:

[03:43] Cool. So, um, uh, so when we had Chris on the show, he talked about a lot of the different trends. Um, it feels to me having come from the ecommerce industry that, that it must feel a lot like a kind of retail shows where everyone, you have kind of the, the, you know, the, the industry stalwarts there kind of a little bit in shell shock and then this whole new group that kind of sees the future. Uh, did you get a vibe that, you know, folks are in denial about what's going on or is everyone kind of onboard with it?

Karl:

[04:12] Uh, there's like two camps, right? So there's the accepting the changes in the industry and the, and the changes in mobility that are going on and that, that Uber and Lyft exist and those companies are gonna be around for awhile and they impact the rental industry. Uh, clearly, um, the large auto companies see those guys as a threat to people taking, you know, taking their business. Um, there was an enormous amount of, uh, small entrepreneurs and small, you know, I mean it could be 2000 cars. It's sort of a small fleet, um, to, you know, maybe 20 or 30, but small entrepreneurs looking to get into, uh, you know, the changing mobility landscape. So they're either subletting, sub leasing cars to Uber drivers on a, on a short term basis. You know, it could be a day or a week or a month depending on sort of their model. They're software companies, they're providing all kinds of software to solve those problems for entrepreneurs.

Karl:

[05:06] Um, you know, some of those were companies that didn't make the comp competitive cut against Uber and Lyft and they repackaged and rebranded and now they're trying to help smaller entrepreneurs who are delivering services. Um, and, but there's clearly like there's some definite old school companies trying to solve old school problems. Um, I attended a, um, for like 10 minutes, there was a presentation on the, the um, sales characteristics and recruiting profile of a high performing counter agent, you know, and, and, and essentially, you know, they just want to sell you insurance, right. Um, and get you in, you know, they want to take you from the, the Toyota Tercel to the Tahoe. And then add, you know, double secret, leave the keys in the road, incentives at grid, coordinate insurance. You don't owe us anything. Um, and, and I, I was here for like 10 minutes. I'm like, you know, it's sort of like you who's selling buggies today, you know, like, I need somebody really good to sell buggies.

Karl:

[06:02] Um, because as a client I don't ever want to have my, my car rental customer experience breaks down when I go see the counter agent. Yeah. It's like the opposite of what the customer experience should be. Yeah. Yeah. It's like, I just want to like get keys and go to the car and drive away. Like you have my Amex and you have my id and my driver's license and I'll give you a retina scan and a fingerprint if you want. I would put a track, I mean, I'm sure you have a tracker on the car already. Right? And there's some of that stuff too. And, and so there's this dichotomy of there's all this connected car data and they talked about being able to shut down cars, you know, because I guess there's some issue where people will, you know, they'll rent in San Antonio and drive to Mexico and strip the car apart.

Karl:

[06:38] And, you know, you never, you never see the vehicle again. They, that's, that's a problem the industry for them. Um, and I was like, you know, this, this is sort of a wasted, you know, this is a 1970s, um, uh, session versus, you know, sort of impact of micro mobility and, and, and, and there's a lot of opportunity for it. I think. Um, you know, as the previous guests said, you know, there's all this data being shared that cities and governments are looking forward to, to reduce traffic problems. Um, and, and that, you know, I think that's a way for the industry to get on the side of, of government, hey, we got all this data. We can, we can better route traffic or we can charge different fees for different access points and when there's rush out and that sort of thing.

Scot:

[07:22] Yeah. Um, I saw a fair amount of Twitter traffic around. Um, there's a lot of pundits that come to these shows and kind of share their vision into the future. A Cox auto's has a, an economist there. Uh, it must be nice to have an economist. We don't, we're not big enough. It's 50 to have our own economist yet.

Karl:

[07:39] That's you, Scot.

Scot:

[07:40] Yeah, I'm a, I'm a couch economist. The uh, uh, what, what were some of the trends he was talking about and they've certainly been really active in this space.

Karl:

[07:48] Yeah. So it's interesting. They, they, uh, so at a, at a high level, they thought, um, GDP was like in the high ones, so like one five to, to sorta depending on, um, trade tensions, Paris and that sort of thing, you know, x, some sort of a dramatic positive or negative impact on the economy, you know, terrorist incident or some crazy tax cut or something. He was outside of things we can't forecast. He thought he was sorta like, here's my bets. Like one, eight, one, nine. Um, and then, uh, at the car level, it was interesting. I just don't, I don't really think about this stuff, but he's like, the average cost of a new car is going to tick over $40,000 in the next year or so. I can 2019, maybe 20, 20. Um, and it's, it's being driven by the desire for consumers, for larger cars, SUVs and trucks.

Karl:

[08:38] Um, and then the dealers just, you know, from a manufacturing standpoint, not making small cars like Fords, like not making sedans minus the Mustang and the mustangs like to get into a Mustang with like, you know, without a radio. It's like 45 grand or something. And so that was interesting. And then dovetails Edo, he talked about some of the trends that we talk about spiffy about millennials and their changing behaviors. And you know, they prefer to live in cities. They prefer to have experiences over owning things like, and in some cases, you know, we have, you know, millennial, you know, you're 17 and you don't have a driver's license. You know, I know you and I talk like that was like the first thing to get your freedom at 16 was to get your driver's license and get out of here, get out of your house.

Karl:

[09:19] And so, um, it's, uh, all those things swirling together, um, make it difficult for dealers. Right. Um, and, and so it was interesting to see that. Um, he had some interesting data and I know we talked about this offline, about the cost of ownership for like, say a baby boomer versus a millennial and it's like 20 cents a mile higher, right? And so they do it in cost per mile. Uh, and like if you're like 50 or 60, it's like 50 cents a mile to own a car. And for a millennial it's like 75 or 77 cents. And it swirls into, you know, higher insurance rates because you're younger, a higher interest rates because you have less credit history or some smaller incomes. And that you live in an urban environment. So then just things like parking fees and that sort of stuff get higher and you're using your ma, your car less if you do own a picture in an urban environment.

Karl:

[10:12] So all of those things come in. And then it, it really pulls people out of buying cars new, which makes the used car market bigger, which is relevant to the car rental agencies piss a bunch of them, have a model where they just make money selling their cars on the secondary market. Um, and so there's a lot of discussion about how do you sell cars? Do you sell them direct? Like enterprise has their own used car sales lots so you can drive up and by car from enterprise today. Um, or do you go through auctions, um, traditional auctions that our dealer to dealer, um, which would then put you into like a, you know, a local used car guy, um, or some of the newer platforms where you're like a Carvana where you're selling it, um, online to someone. And so it was, uh, he had, he had a lot of insights about that.

Karl:

[11:00] He felt like the Oems, we're going to survive. Um, he thought the dealer networks, we're sort of at risk. Um, and he felt like the auctions had to really evolve. Ppas. There's a lot of, a lot of people chipping away at the edges of the traditional auction business. Um, it was interesting. It's interesting to sorta hear the side talk among people depending on who they were. Um, you know, again, we're sort of side participant vendors in that market, but the people were pretty, it was interesting to hear that. Yep. Cool. And then now when we had Chris on the show, one of the big topics he talked about is, so if we have this change in ownership model from individual ownership to more business ownership, uh, and um, you know, who's going to take care of all, all these vehicles, this is obviously near and dear to our heart.

Karl:

[11:43] Um, so he kind of talked about fleet management as a service. A, is that something that was talked about at the show or were there a lot of vendors there for that? Uh, there were couple of vendors. I mean there's us and a, and a couple others. Um, it was absolutely a topic of people that visited us. I would say 75, 80% of the people who came to talk to us, we're looking to do that. Again, it's, it's primarily the new players to the market because the business sounds interesting until you own cars and they're split up all over. You know, I've got, I'm a distributed, you know, mobility network provider in Los Angeles. I own 200 cars in there into 10 lots across La. Oh Wow. I have a lot of things to do all over, uh, you know, an 18 million person city. And so they're looking for people to go out there and deal with the cars.

Karl:

[12:31] I mean, one of the things that was interesting, we've, we saw a, um, a digital, um, key exchange system, right? So it's highly secure, sort of designed to be in, in the most dangerous of locations and, and really, you know, to, to withstand sort of vandalism, that sort of thing. You know, you can show a bar code and it, it's, it's a gps or a cell phone enabled. And so it communicates it. And that was super interesting and they were across the, across the way from us in the trade show area and had, they had a lot of traffic and then people coming to us asking, you know, can you know, what are the services you can do? And, and when they talk, when we, you know, we said, hey, we do, you know, fleet fleet maintenance, we can do preventative maintenance, oil change, tire rotation, um, car washing, all that sort of stuff.

Karl:

[13:17] They, they got pretty excited about it because they're seeing that that's a problem, right? Because as soon as you start moving the vehicles, then they get dirty and the more successful you are, the more maintenance you need and all those sorts of things. So it was, it was, um, it was an exciting validation of our model. Yeah. Um, so there seems to be this lifecycle where people kind of start dabbling with, um, you know, I've, I've even seen people, they'll Turo, they're their own vehicle. Then they'll, they'll realize there's money to be made. Then they'll add a second and then they'll build into these micro fleets and then they're gonna need a fleet services and those kinds of things. Um, a lot of the investors I talk to you, they kind of like build models and they say the economics will never work. But then at the same time, I see these guys scaling up from tens to hundreds to thousands of vehicles.

Karl:

[13:59] So, um, do you get any vibe that this model is working for these guys here? We spoke to someone who own 2000 cars in Metro New York and, you know, and they were not like enterprise, right? They were like, you know, it was like Scott and Karl, but they're in New York. And um, you know, I asked them a little bit about what, you know, you know, we had a good conversation. You know, I was obviously interested in talking about their business and how we can help them. We had a little bit of a conversation about their business model and they were pretty cagey about it. But I mean, I, I find it hard to believe you can get the 2000 cars before, you know, you don't figure out the econ economics don't work. You know, it's like, yeah, I could see you could have 20 cars and you could sort of fun that to a point where like, yeah, something must be working to be able to afford 2000 guards. Yeah. It's probably a utilization thing out. Imagine. And they, um, and they must have figured out like, uh, you also kind of start to wonder like, how do they go and acquire all these drivers? And so

Scot:

[14:52] they almost have to have a marketing, you know, how do they get their utilization up? It'll be a nurse in to, to, to understand how that works as this scales up.

Karl:

[14:59] Yeah. I v V this particular guy was providing cars to the two major, you know, Uber and Lyft. Right? Yeah. And so I think he has some sort of relationship with them where they're feeding them leads. He didn't seem like he had a big marketing push or problem. He had, he had maintenance and operations problems, um, where the, the law, the list of their problems for the most part.

Scot:

[15:20] Cool. Awesome. Any other last thoughts about the show?

Karl:

[15:23] No, it was interesting. I mean there was a whole session on connected car, um, which is cool. Um, they talked about connected car and autonomy and I think they generally felt like, uh, you know, autonomy sort of like five years out plus in connected cars, been here for five years and the, the, the communication and the marketing firm, everybody sorta was disconnected. Um, the rental car agencies think about connected cars. How can we sell more stuff to people renting our cars because of the data we have on them. That was like, hey, that was the major focus of the, of an hour long session. Um, I as a, as a car or rent or on a traveler, I didn't really know what I wanted them to sell me. Like if I want to go to a restaurant, I'm going to use Google or Yelp or open table or something.

Karl:

[16:12] And so I sort of felt like they were trying to duplicate things that exist already. Um, you know, there was some sort of compliance sort of legal stuff. Like, you know, you said you were going to leave the state and then you laughed. But they have those trackers now and I don't know what news from that, you know, they can sorta tell those things before. A lot of connected car stuff. So uh, but it was interesting they were talking about it. It was very, it was very, you know, current model centric, not sort of new model centric. And then they also did talk about sharing data. You know, I guess as business people you always sort of like, you know, run up against the government and everyone sort of like hair on the back or the neck stands up on end when the government shows up. Um, but they were all fairly positive about sharing data with government entities to to improve traffic flow and, and to generally, you know, be a, be a positive player in the transportation communities that they, that they operate in, which is sort of pretty interesting. I know here in Raleigh we have more traffic problems that we had 10 years ago and I'm looking forward to, you know, all that data, making it better personally.

Scot:

[17:11] Yeah. Awesome. Well thanks for that trip report and thanks for being on the podcast.

Karl:

[17:14] Thanks Scot.

Scot:

[17:33] So that's all the news from ICRS. Now let's look at some of the news from around the industry, uh, from other sources. As a reminder here on the Vehicle 2.0 Podcast, we look at the Vehicle 2.0 framework and that's where we look at the four waves of innovation sweeping through the auto industry conductivity, changing ownership models, electrification and autonomy in news, uh, on connectivity. There's been this really interesting public kind of spat between, uh, one of our guests on the show, smart car. Uh, they have a competitor called Otonomo and this erupted into the press has reported a actually this week in tech crunch, uh, these guys are battling out. It looks like there's, um, some, uh, potential copying going on or some kind of intellectual property battle between these two companies. They both provide API for autonomous are, sorry, excuse me, for connectivity in cars and they are definitely battling it out in public.

Scot:

[18:32] If your interested in that we'll put a link in the show notes. Um, there was an interesting study published a here in the last week or so, uh, where they asked 3000 adults, uh, about various things around vehicles. Uh, and this is from Kantar a half the consumers said they would be a, you know, very likely or extremely likely to use their car as a way of pain. Um, so imagine, you know, we, we are in the touchless payment world and ecommerce now where you can just tap your phone to an NFC chip and pay for things. What if your car had payment credentials and as you drove through, uh, you know, it seems like a likely scenario would be drive throughs if you drove through a drive through your, your vehicle kind of talked to the drive through and authenticated payment. Um, uh, so, uh, that's an interesting use of connected car for payments that we haven't really seen.

Scot:

[19:21] But it sounds like consumers are eager to try it out. Moving on to changing ownership models. Uh, the big news there is tech crunch reported yesterday that one of the top, uh, person to person ride sharing companies get around, uh, acquired one of their larger competitors in Europe called Drivy. Uh, so, uh, that was a $300 million acquisition with which is obviously pretty substantial. Uh, get around, has raised 400 million. So it's not clear if they just used all that on this acquisition or if this was funded through some debt or, or maybe even some, maybe that's an equity value. Um, and so get around was valued at 600 million, uh, before the acquisition. So this is surely going to get them close to the Unicorn level, which is the billion dollar evaluation. Um, one of the most active large investors in this overall space is Softbank. Uh, and they are one of the investors in and get around, uh, the investors in Drivy are index ventures and cafe innovation.

Scot:

[20:25] That's a, a pair of spaced, a investor out there. So a, the companies or the CEO's going to stay on and, and effectively run the European business. So now you kind of have this, this first look at a global, a car sharing company on the P to p side. So can be interesting to watch to see how that scales up. Tens of electrification news. Uh, we don't have time to go into all of it. Um, I thought the most interesting things we saw this week, uh, we have Ford invested 500 million, so Ford's very active also in mobility and they announced a $500 million investment in the electric pickup maker. Ravion. Uh, so ravion has a really cool, uh, electric pickup and this investment, uh, looks like it's going to have multi-facets so they're going to work on, um, some new technology for essentially using the rubion platform for a new Ford vehicle.

Scot:

[21:19] At the same time for it said that we're going to continue with their own internal development, um, which, uh, they specifically called out a plugin version of the Ford, the very popular Ford F-150 pickup. Um, I'm excited about this because, uh, you know, the service industry is where a lot of these trucks essentially go trucks and vans. And, uh, here it's 50. We would love to use a evs instead of a internal combustion engine vehicles. So it's gonna be great to see if we can kind of start to get more of the commercial vehicles electrified, uh, in this partnership. Certainly signals that that's on the way. One of the areas I watch really closely for electric vehicle news is China. Um, so, uh, they, they had kind of their annual report out. Um, the for last year, the, there's more triple the manufacturers of evs registered in China now and passenger vehicles sales, uh, for electric vehicles are going to exceed 1.6 million units this year.

Scot:

[22:17] And in 2019. Um, so, uh, so this huge kind of a bubble is forming there. Some people are calling it a bubble. Uh, you know, uh, there's a lot of negative connotations around bubbles, but I, I, you know, I think what we do see is the government of China is very supportive of the consumers are buying these. Uh, and the other interesting data point is, uh, that evs make up 4%, but they're on a track to get to 20% very quickly by 2025. Um, and so that's going to be like 7 million units. When you, when you talk about China, everything's multiplied almost by a factor of 10 from the u s so, so a lot going on there and it's going to be interesting to watch. Uh, one of the consequences of the excitement around electric vehicles in China is sales of traditional cars are really plunging, um, and they've been down substantially for the 10th straight month in a row from March.

Scot:

[23:11] Um, so the economy's slowing, they're a little bit due to trade tensions, uh, so that's causing it. But then, uh, electric vehicles are definitely a surging past the, the normal vehicles. Um, uh, back here in the U S if we look at 2018, um, the number of registrations for electric vehicles doubled in 2018. So that's good news here in the u s uh, so that's, there was 208,000 new electric vehicles registered. Um, and that was more than double those sold in 2017. Uh, another couple of fun facts. Uh, you can't, uh, whenever go out to California, um, you can't kind of drive around without seeing 20 or 30 Tesla's on the road. Uh, so California did account for about 50% or 95,000 of those. Uh, and then, uh, all this data's provided by one of the data trackers in the vehicle space called IHS Markit. They took this data and they projected it forward and they're showing over 350,000 new electric vehicles will be sold in the US in 2020.

Scot:

[24:14] Uh, and then, um, that's 2%, but then they do show it getting to 7%, which is kind of actually where, uh, we s we talked about China around the same timeframe, uh, by 2025. So, so just to recap, by 2025, uh, the pundits are projecting that we'll get to seven to 10% of new cars will be electric in both us and China. Now the, uh, the most exciting area of Vehicle 2.0, that, that you, you find the most news is, uh, autonomy. Uh, and this was a really big week for autonomy. So, uh, Monday Tesla had a full day, um, uh, kind of call it autonomy day where they talked about all the work that's going on in autonomy. And if you're remotely interested in this topic, I I strongly recommend watching it. Um, Elon Musk was there for most of it. He had his top engineers talking about a lot of the topics we talk about on this show.

Scot:

[25:08] If you don't have time. Some of the highlights for me, um, there's this really interesting debate and we've talked about it on the show before, but Tesla went really deep on their, their religion around this one. Uh, and it's the whole, you know, cameras versus Lidar. Um, so the current Tesla implementation, uh, uses four to six cameras. Uh, and their argument is that, you know, humans have two eyes, which are essentially cameras and they're able to plot a three d world without having to see use radar. Um, and then they talk about a lot of the negatives of radar, uh, which is the radar used for autonomy is lidar. Um, so that was really interesting. And then of course the, the Lidar folks came out and kind of said, you know, no, here's why you're wrong. So it's really interesting. It's going to be kind of a race to see who wins this.

Scot:

[25:54] And to me it's the most fascinating part of autonomy right now. His camera versus Lidar and who's going to, will there be a winner? Will they both coexist in this? Could be really interesting to watch that. Um, they spent a lot of time talking about, you know, how do you get this to a five nines reliability because we're dealing with humans and safety. Um, and one of the, one of the things they throw out there is based on their data, they believe their autopilot, which is their level to a implementation is seven times safer than human drivers. Um, so when they, you know, they're able to look at the data because Tesla has so much data, it's pretty fascinating. And they said that, uh, you know, I'm sure they're looking at crashes, incidents that, uh, you know, you're seven times safer using the just where they are today versus a human driver.

Scot:

[26:41] Um, when you, another statement made, and I haven't seen this refuted, is that when you look at all the autonomous vehicle data out there being generated, they have over 90% of it because they have such a large fleet compared to a lot of the smaller trials from the way Mo's and the cruises and the other other folks out there tackling this Uber. Um, so, so that's interesting. And then, you know, their, their argument is because these neural nets and machine learning systems are datadriven, whoever gets the most data of kind of gets to five nines first. So it's gonna be interesting to see if, if that, that bears out as well. Another thing they announced is by next year, and this is a, an Zealand thing, so you always have to take this with a grain of salt. He's usually off, usually nails these things, uh, in the prediction.

Scot:

[27:25] But the timing is usually off. So he said by next year they, they could in theory have, you know, uh, thousands of Robo taxis out there. Um, now one of the interesting metrics there is when they look at this Robo taxi, so a full autonomous taxi and their vision is as a Tesla owner, you can kind of check your car in and out of this fleet. Uh, and then there'll be a consumer APP for, for summoning a Robo Tesla. Um, the interesting stat is if you look at a human driven mile, so that's either you driving your car or ride share like an Uber, Lyft, you're looking at a total cost of ownership between two and $3 per mile, and they're projecting that the Tesla Robo taxis will get as low as 18 cents per mile. Um, so then when you, when you start to get that low, it does really start to change the car ownership model.

Scot:

[28:12] Um, you know, today you can certainly do enough nef if you do enough ride sharing your unit up upside down pretty quickly. But imagine if that was only 18 cents a mile. That really kind of is pretty compelling. Um, another stat he put out there as if you are a Tesla owner, you could make up to 30,000 a year just by putting your car into the, the Robo taxi fleet. Um, and then, so that was all really interesting around autonomy at the macro level. And then they went super micro, uh, and they announced that they have abandoned, uh, commercially available chipsets and they've developed their own custom chip, uh, for, for autonomy. Um, and you know, a lot of lot of, uh, excitement around this saying it's by far the, they're way ahead of everybody. They even started talking about the next generation is going to be three times better.

Scot:

[29:02] Um, and you know, because they're relying on vision, there's a lot of compute this having to happen in the vehicle to, to essentially do what the human brain is doing of creating a three d world from, from looking at images and comparing them. So they've moved a lot of that into hardware with this advanced chipsets. So that's, if you're really Super Geeky, um, there's tons of data out there and some really good articles. Uh, we'll link to some of the highlights in the show notes. Also in autonomy. One of the big players is General Motors and they have a division called cruise. Um, and they, uh, made some announcements on the 20th of April, uh, about, uh, some interesting things there. So first of all, they announced a partnership with Google. Um, and this is where, uh, one of the really interesting things with these autonomy companies is, uh, how they run the simulations.

Scot:

[29:49] So, uh, they talked about, uh, you know, the, they're up 25 x in simulation miles from, from the same time a year ago. Uh, and they've created a there in the world of video gaming. There's this engine called unreal that a lot of the video games are built on. So they actually create a real world version of the world in unreal, um, that they're driving these vehicles through based on all that lidar data. And they internally call it the matrix. So, so movie fans will, will enjoy that reference there. Um, so, so that was interesting. Um, and then all of these guys are really kind of starting to share data around, um, you know, how, how is their autonomous fleet working? Um, so one of the things that's interesting is, uh, they throw a little shade and talked about how they have 0.19 disengagements per thousand miles. Uh, and that's better than most of the other folks out there.

Scot:

[30:42] Um, uh, Waymo is a little bit better at 0.09. So what's happening is all these folks are running these simulations and trying to predict, you know, get, get better and better so that humans don't have to get involved in the autonomous driving today. Um, Tesla back over to Tesla, Tesla talked to, they had some really cool demos of what they call shadow mood. So they can, you know, they can actually, um, on a vehicle, they can put, uh, two versions of the software, the real mood and a shadow mode, and they can watch and say, all right, if we, we, we've seen this, this ab problem out there, let's say, um, when they talked about as, as people drifting into your lane. So they can actually, uh, you know, have a shadow version of the software on out on the fleet and watch for drifts and predict, you know, simulate in the vehicle what would have happened with both the real version.

Scot:

[31:36] Well they know what happened with the real version and then the shadow version and then learn from that without actually having to have the fleet have, you know, maybe more risky software. So it's really interesting things. Uh, when this, when, when, when your vehicle is largely software, uh, it kind of is mind blowing that you can be running effectively, you know, that, you know, who says they couldn't rent 10 versions of the simulation? They're on the vehicle. And it is interesting to think about all these simulated miles that are being driven as we speak. Um, it's a really great time to be an autonomy because, uh, we have the lift a IPO is done and now Uber is working on their IPO. So part of that process is you reveal this S-1, which is a document about everything that your company has been working on.

Scot:

[32:20] Uh, one of the more intriguing areas of the Uber S-1 was around their autonomous vehicle efforts and they also have a flying car effort. Um, so, uh, they're spending over 500 million a year in r and D in these kinds of technology programs, uh, for the future of vehicles. Uh, that's obviously pretty hefty. Um, and to, uh, a lot of folks when they first read this one, we're really concerned about that. Um, so, so kind of on the heels of that S-1 being revealed, Uber announced that they are going to effectively get a independent funding for that, that division. Um, it's not clear to me if it's an a complete spin off or what, uh, I think Uber will still large own, own kind of like 15 to 20% of it, but it's largely going to be funded by outside vendors, not the public markets, the investors.

Scot:

[33:09] There are Toyota, Denso, which is a parts maker, and the Softbank Fund that we've talked about already, and that Avi Division was given a $7 billion valuation through that investment. So, um, so Uber a is working with, you know, public and private funding to find the right balance of investment in, in these future vehicles. Um, the last thing on autonomy, uh, and this was a quick one. Uh, you know, they're the, the other big player is Google's alphabet division, which is called Waymo. Um, they announced a, a fleet of factory in Detroit. So, uh, they are going to, uh, create 400 jobs in Detroit over the next couple of years. And what the way Waymo works is they're not actually building their own vehicle. They're retrofitting existing vehicles. Um, so part of the plan, uh, here is by 2020, 20, 22, excuse me, they're going to have 62,000 Pacificas in 20,000 Jaguars outfitted with their self driving lidar based autonomy system, uh, and that'll get them cranked up to over a million trips per day.

Scot:

[34:18] Um, so it's going to be so, so we're, we're seeing all these efforts to really ramp up billions of dollars being invested in autonomy, uh, lidar versus cameras. So it's a really exciting time to be following this race out there. And we will continue to report, uh, what's going on and will continue to have guests on the show to help shed light on all these different topics and, uh, these kind of different technologies and, and thinking about who is going to win and who's going to lose or will we have multiple winners. And with that, we're out of time and we appreciate you listening. If you enjoyed today's show, be sure to head over to your favorite podcast listening app, uh, and give us five stars. Thanks for joining us and we'll be back next week.