WEBVTT - Should We Take My Car, or Get a Robotaxi? 0:00:00.120 --> 0:00:03.600 Hey, Dana, Hi Mark. So what is a peak? It's 0:00:03.680 --> 0:00:07.280 the top of a mountain, Okay. Makes me think of 0:00:07.320 --> 0:00:09.400 the three Peaks challenge here in the UK, where you 0:00:09.800 --> 0:00:12.440 hiked to the top of three separate peaks all in 0:00:12.520 --> 0:00:15.840 one day. Okay. I've never done it. I've wanted to 0:00:15.880 --> 0:00:18.640 do it, but I don't think I'm I'm not ready 0:00:18.680 --> 0:00:21.880 for that yet. Next summer in the recording studio too much, 0:00:21.880 --> 0:00:25.360 not in the gym enough. There you go. Okay, Um, 0:00:25.440 --> 0:00:27.720 so how about some other peaks? What other kinds of 0:00:27.720 --> 0:00:29.560 peaks are there in terms of maybe like sales or 0:00:29.680 --> 0:00:32.800 usuits of stuff. Well, I think of I think of polaroids, 0:00:32.800 --> 0:00:35.000 how they were really popular there for a bit and 0:00:35.040 --> 0:00:38.000 then maybe have dropped off in everybody else's house except 0:00:38.000 --> 0:00:41.239 for mine. My kids love polaroids. Okay, So what other 0:00:41.280 --> 0:00:42.640 types of things have hit a peak? I know that 0:00:42.680 --> 0:00:44.800 we can talk about like land lines for telephones or 0:00:44.800 --> 0:00:47.519 anything like that, anything that was really popular and then 0:00:47.560 --> 0:00:50.639 maybe sales dropped off or peak. Also makes me think 0:00:50.680 --> 0:00:53.080 of the phrase peak oil, which you may have heard of, 0:00:53.120 --> 0:00:55.440 which has to do with actually the extraction of oil 0:00:55.480 --> 0:00:57.280 from the ground. Yeah, and well, the idea is that 0:00:57.320 --> 0:00:59.600 there might not be as much demand for oil in 0:00:59.640 --> 0:01:01.760 the future, and so maybe we've hit a peak who knows, 0:01:01.920 --> 0:01:03.960 or peak for really a lot of other things, and 0:01:04.040 --> 0:01:06.800 one of those things is peak car. Um So the 0:01:06.840 --> 0:01:09.600 idea there is the concept that you know, we've reached 0:01:09.600 --> 0:01:11.759 as many cars as we're gonna get out out there 0:01:11.800 --> 0:01:13.720 on the road. Do you think that's true. I think 0:01:13.760 --> 0:01:17.840 it could be true because I feel true. I think 0:01:17.880 --> 0:01:20.440 it might feel more true for urban nights than other people. Yeah, 0:01:20.480 --> 0:01:22.759 I think you're right. So today we're gonna be talking 0:01:22.760 --> 0:01:26.039 about a research note called peak car by our head 0:01:26.080 --> 0:01:28.959 of Mobility, Ali Azadi, who's going to stop us get 0:01:28.959 --> 0:01:30.920 into this concept and see if we are actually at 0:01:30.920 --> 0:01:33.720 a peak for automobiles out on the road. Please note 0:01:33.760 --> 0:01:37.160 that the ANF does not provide investment or strategy advice, 0:01:37.160 --> 0:01:39.240 and you can hear a full disclaimer at the end 0:01:39.240 --> 0:01:42.440 of the show. I'm Mark Taylor and I am Dana Perkins, 0:01:42.520 --> 0:01:48.040 and this is Switched on the b n F podcast. Ali, 0:01:48.080 --> 0:01:50.080 thanks for joining us today. Thank you very much for 0:01:50.160 --> 0:01:53.920 having me. This note is titled peak car question Mark. 0:01:54.000 --> 0:01:56.800 So theoretically I should be saying peak car, which is 0:01:56.840 --> 0:02:00.080 a bit punchy to be honest, you you're in. I 0:02:00.120 --> 0:02:03.400 see people with cliffhanger jump in because we've got a 0:02:03.400 --> 0:02:06.600 big question mark. So let me ask you, have we 0:02:06.640 --> 0:02:09.240 reached peak car? And if not, when do we reach 0:02:09.320 --> 0:02:13.360 peak car? So whenever people predict something reaching the peak, 0:02:13.680 --> 0:02:17.520 it's it's always turns out to be generally not true. 0:02:17.760 --> 0:02:20.120 So if you remember back in the day where people 0:02:20.160 --> 0:02:23.200 were talking about peak oil supply, now we're talking about 0:02:24.480 --> 0:02:26.720 When we were writing this note, there was a little 0:02:26.720 --> 0:02:30.200 bit of a sense that auto sales are slowing down globally. 0:02:30.560 --> 0:02:35.320 So in last year China auto sales declined for the 0:02:35.400 --> 0:02:38.519 first time in twenty years. This year so far, we've 0:02:38.560 --> 0:02:41.760 seen auto sales declining in many major markets in the US, 0:02:42.080 --> 0:02:44.720 in Europe, and India, so there has been a little 0:02:44.760 --> 0:02:47.639 of a sense that maybe something fundamental is changing this 0:02:47.760 --> 0:02:50.280 time around. So that's why we put the question mark. 0:02:50.720 --> 0:02:53.560 This is all auto sales you're seeing pretty much across 0:02:53.600 --> 0:02:57.000 the world, and this is including trucks. SUV is like, 0:02:57.040 --> 0:02:59.600 what what how do you define autos? Good questions? So 0:02:59.639 --> 0:03:02.560 here we are only talking about cars, so basically thinks 0:03:02.600 --> 0:03:05.840 that individual consumers buy to move around, but we're not 0:03:05.880 --> 0:03:09.760 talking about trucks. That you are talking about SUVs that 0:03:09.880 --> 0:03:13.880 people by, yes, an individual trucks like a flatbed truck 0:03:13.919 --> 0:03:15.400 that you would throw your stuff in, just not a 0:03:16.240 --> 0:03:18.720 or right. Yeah, that's the reason they ask that, because 0:03:18.720 --> 0:03:21.760 people aren't buying sedans anymore. Yeah, so you're also seeing 0:03:21.760 --> 0:03:24.800 consumers taste shift. So in the US, pickup trucks are 0:03:24.840 --> 0:03:28.040 very popular. Outside of the US, you have some markets 0:03:28.040 --> 0:03:31.480 like Thailand that pickup trucks are popular, but SUVs in 0:03:31.520 --> 0:03:34.640 general everywhere are popular, although their types are quite different. 0:03:35.200 --> 0:03:38.280 So there's a shift a little bit from smaller medium 0:03:38.560 --> 0:03:43.120 basically stands two more and more SUVs. There's a variety 0:03:43.120 --> 0:03:45.840 of reasons for that. Some argue that people feel safer 0:03:45.880 --> 0:03:49.920 in them, but some of these also carmakers like subs 0:03:49.960 --> 0:03:52.600 because they make more margins on them. So as they 0:03:52.640 --> 0:03:55.480 make more SUV models available, consumers buy the more. It 0:03:55.560 --> 0:03:58.400 sort of ends up reinforcing a nice cycle. Okay, so 0:03:58.760 --> 0:04:02.040 sales around the world are I don't know week are 0:04:02.040 --> 0:04:04.480 they week by a lot? Is it just kind of 0:04:04.480 --> 0:04:06.080 a one off for the year or is it kind 0:04:06.080 --> 0:04:07.680 of a would you say if it's more of a trend. 0:04:07.800 --> 0:04:10.720 So this is what we were trying to address. UM 0:04:10.760 --> 0:04:15.000 and in our view, in most markets you're gonna see 0:04:15.400 --> 0:04:19.159 sales recover. There are a few markets, for example of Japan, 0:04:19.360 --> 0:04:22.560 where demographics are essentially the main culprit. You have a 0:04:22.600 --> 0:04:28.160 declining total population coupled with an aging society. Essentially fundamental 0:04:28.240 --> 0:04:30.520 demand is going down. But if you look at out 0:04:30.520 --> 0:04:34.200 our markets, say China or say US, we still expect 0:04:34.360 --> 0:04:38.520 sales to gradually recover. In China in particular, the motorization 0:04:38.640 --> 0:04:41.720 rate is still relatively low. A lot of the decline 0:04:41.720 --> 0:04:44.719 that you're saying this series got to do with macroeconomic factors. 0:04:45.240 --> 0:04:47.200 So is this something that you would see in the 0:04:47.279 --> 0:04:50.240 longer term as a bit cyclical because we saw a 0:04:50.279 --> 0:04:54.000 big drop in what was it two eight, and we're 0:04:54.000 --> 0:04:57.520 seeing another drop now. So is this almost a decadal 0:04:57.560 --> 0:04:59.760 thing where we can expect that or is it something 0:04:59.800 --> 0:05:02.800 else to play. Sure, you're absolutely right that car sales 0:05:02.960 --> 0:05:09.000 historically have been somewhat cyclical. They do respond to economic cycles. Now, 0:05:09.080 --> 0:05:12.680 some sometimes people make the mistakes of assuming that GDP 0:05:12.800 --> 0:05:16.880 growth rates and car sales are want to uncorrelated. The 0:05:16.920 --> 0:05:19.680 correlation between new car sales and GDP. There is a 0:05:19.760 --> 0:05:22.400 bit of a b correlation there, But what really correlate 0:05:22.400 --> 0:05:25.479 is very well, would GDP growth rates, or to be 0:05:25.560 --> 0:05:29.160 more accurate, GDP per capital growth rates, it's actually the 0:05:29.200 --> 0:05:33.359 total distance that the fleet drives every year. The reason 0:05:33.440 --> 0:05:35.599 for that is, let's say the financial crisis is a 0:05:35.600 --> 0:05:37.800 good example. What happened in the aftermath of that is 0:05:37.839 --> 0:05:39.880 you had a lot of people losing their job, and 0:05:39.960 --> 0:05:42.400 in a country like US, a lot of people drive 0:05:42.480 --> 0:05:44.360 to go to their work. So once you've lost your 0:05:44.440 --> 0:05:46.520 job and you don't have an income, first of all, 0:05:46.520 --> 0:05:48.800 you're not going to work, but also you have to 0:05:48.880 --> 0:05:52.760 conserve your money, so you're driving less. So historically there's 0:05:52.800 --> 0:05:56.359 a much stronger correlation between GDP per capital growth rates 0:05:56.480 --> 0:06:00.680 as well as the total distance that the fleet drives. 0:06:00.720 --> 0:06:05.400 From that relationship, then you can start calculating, okay, depending 0:06:05.400 --> 0:06:08.720 on how the GDP does, GDP or unemployment rates, because 0:06:08.760 --> 0:06:11.200 it seems like you're trying it to steady income and 0:06:11.480 --> 0:06:14.560 than having a car, so you could make it much 0:06:14.600 --> 0:06:17.200 more granular oil and you could start breaking it apart 0:06:17.320 --> 0:06:22.480 of those factors um Having said that, from a macroeconomic perspective, 0:06:22.560 --> 0:06:25.159 the diduper capita seems to be a good factor. You 0:06:25.200 --> 0:06:28.560 can obviously go much more sophisticated. There's other issues. It 0:06:28.640 --> 0:06:33.360 depends on your araban versus rural population, what's the composition 0:06:33.400 --> 0:06:36.080 of the economy, So you can add more and more 0:06:36.120 --> 0:06:39.320 elements of making it much more sophisticated. But what we 0:06:39.400 --> 0:06:41.880 found out in this note is actually, for a country 0:06:41.920 --> 0:06:45.159 like US, if you look at historical relationship gjper capita 0:06:45.320 --> 0:06:47.479 and the total distance driven by the fly works out 0:06:47.520 --> 0:06:50.320 really nicely. It's actually quite beautiful. It's a constant number 0:06:50.400 --> 0:06:52.599 which then you can use and then you can rely 0:06:52.800 --> 0:06:55.800 on external forecast like what the World Bank says or 0:06:56.680 --> 0:06:59.440 for the GDP and what the U N Population Division 0:06:59.520 --> 0:07:02.400 says for population to then come out with the view 0:07:02.400 --> 0:07:05.279 of how much travel you expect to fleet to do 0:07:05.400 --> 0:07:09.440 in the future. And you're seeing global commonalities, which I 0:07:09.480 --> 0:07:11.440 think is really interesting because each of these markets on 0:07:11.480 --> 0:07:15.560 their own seems unique. Can you just quickly outline what 0:07:15.720 --> 0:07:18.360 other countries you're looking at here and then maybe pick 0:07:18.400 --> 0:07:20.880 the one that you want to expand on. So we've 0:07:20.920 --> 0:07:23.560 tried to cover all the major markets um. So we 0:07:23.640 --> 0:07:31.400 have individual forecast for US, China, India, Japan, Korea, Germany, UK, 0:07:31.720 --> 0:07:34.840 France and Europe as a whole. Um. We also do 0:07:34.920 --> 0:07:37.640 Australia because our team in Australia is very interested in 0:07:37.920 --> 0:07:40.400 knowing what will happen in our market. And then we 0:07:40.440 --> 0:07:43.560 also look at trying to moll forecast the rest of 0:07:43.600 --> 0:07:47.400 the world, which is a fairly big pocket category in 0:07:47.520 --> 0:07:52.000 terms of the differences. While there is commonality in the 0:07:52.080 --> 0:07:54.960 sense that from a macroeconomic perspective, you can make an 0:07:54.960 --> 0:07:59.560 assumption that in most markets the total distance driven by 0:07:59.560 --> 0:08:03.720 the fleet is correlated with geper capita, it's very different 0:08:05.000 --> 0:08:09.000 starting point for each country. So take the US. US 0:08:09.080 --> 0:08:11.720 has one of the highest mortorization rates in the world, 0:08:11.760 --> 0:08:14.920 meaning that people have a lot of cars. In many cases, 0:08:14.960 --> 0:08:18.320 households have more than one car. In a country like 0:08:18.360 --> 0:08:21.320 the US, If you look at your fleet on the street, 0:08:21.400 --> 0:08:23.800 how much of it is owned by individuals, whereas how 0:08:23.840 --> 0:08:26.360 much of it is in taxis or right hailing companies 0:08:26.440 --> 0:08:30.720 or car sharing companies, Those numbers in the US are 0:08:30.840 --> 0:08:34.720 heavily in favor of the privately owned vehicles. So if 0:08:34.720 --> 0:08:38.000 you look at the demand for transportations, if you look 0:08:38.000 --> 0:08:41.439 at it last year, the total distance traveled by the 0:08:41.559 --> 0:08:46.800 car fleet in the US, something around of that distance 0:08:47.200 --> 0:08:50.000 was traveled by the cars that people owned only About 0:08:50.040 --> 0:08:54.559 two point six three percent was by taxis, car sharing 0:08:54.559 --> 0:08:57.160 and right hailing. Even though right hailing you think of 0:08:57.280 --> 0:09:00.480 Uber and Left and Minia leaders your contribution the total 0:09:00.520 --> 0:09:03.320 distance traveled by the fleet is still relatively low. You 0:09:03.360 --> 0:09:06.680 go to a country like India, where private vehicle ownership 0:09:06.720 --> 0:09:10.400 is very low, overall motorization rate is still very low. 0:09:11.559 --> 0:09:16.240 The relative contribution of taxis as well as hailed cars 0:09:16.280 --> 0:09:19.439 like Ala and again Uger operates in India, their contribution 0:09:19.440 --> 0:09:22.720 is a lot higher. In India last year we estimated 0:09:23.000 --> 0:09:27.040 off the distance traveled by the fleet, roughly one third 0:09:27.559 --> 0:09:31.319 was by the shared modes of mobility, very different right 0:09:31.400 --> 0:09:33.880 quite extreme. And then if you go to a country 0:09:33.920 --> 0:09:38.480 like Japan, where public transit infrastructure is really good and 0:09:38.559 --> 0:09:43.720 taxes are relatively expensive and regulation prevents private right hailing, 0:09:44.440 --> 0:09:48.400 then the number contributed by these shared modes even lower, 0:09:48.440 --> 0:09:51.480 so it's below one percent. So there's a very wide 0:09:51.679 --> 0:09:56.160 geographical difference around your starting point, which really has to 0:09:56.160 --> 0:09:58.760 do with how do you get around today? And is 0:09:58.840 --> 0:10:02.320 this alternate better than how you get around today? So 0:10:02.360 --> 0:10:04.760 in India, I suppose it is better than maybe a 0:10:04.800 --> 0:10:07.960 bus or walking or biking or even I've seen multiple 0:10:08.000 --> 0:10:11.520 people climbed on kind of a three wheeler before, and 0:10:11.559 --> 0:10:16.160 are are these vehicles? Are these shared ride services replacing 0:10:16.200 --> 0:10:20.320 that stuff or is it replacing mass transit the buses 0:10:20.320 --> 0:10:25.160 and a few subways. Very good questions. One clarification around 0:10:25.200 --> 0:10:27.800 our forecast, So this time around, we we're only trying 0:10:27.840 --> 0:10:30.080 to forecast the car sales, so we're very much focused 0:10:30.080 --> 0:10:33.080 on the four wheeler. But you're hitting the nail in 0:10:33.080 --> 0:10:36.240 the sense that when people talk about these new shared 0:10:36.240 --> 0:10:41.800 mobility services, there's always a question around are these complementary 0:10:41.920 --> 0:10:45.600 or already is competitive with existing modes. If you look 0:10:45.600 --> 0:10:49.800 at uber and Lift and who did they disrupts today 0:10:50.080 --> 0:10:54.040 in the US, Uber and Lift primarily have disrupted taxis 0:10:54.160 --> 0:10:58.680 and public transit. Essentially in many municipalities like New York, 0:10:58.720 --> 0:11:02.480 like San Francisco, there was a decline in ridership on 0:11:02.600 --> 0:11:07.440 public transit. So from a public policy perspective, given that 0:11:07.480 --> 0:11:10.360 they also increase congestion in those cities, this becomes a 0:11:10.360 --> 0:11:12.880 bit of an issue. But if you go to India 0:11:13.000 --> 0:11:17.160 or Southeast Asia where Grab and Gorjack operate in those markets, 0:11:17.280 --> 0:11:22.160 you had a large segment of the population being underserved 0:11:22.200 --> 0:11:27.600 by existing available options. So privately weekicle ownership is out 0:11:27.600 --> 0:11:30.439 of the reach of many segments in the population. It's 0:11:30.559 --> 0:11:34.880 simply too expensive. Public transit is not enough, and the 0:11:34.920 --> 0:11:38.040 available taxes or even the tuk tuks and the two 0:11:38.080 --> 0:11:40.400 leaders over there, they were still not enough. There was 0:11:40.440 --> 0:11:43.160 not a good way of balancing supply and demand. What 0:11:43.320 --> 0:11:45.760 all of what ubers India operation and what GRAB and 0:11:45.760 --> 0:11:48.440 Gorja have done is essentially they have brought access to 0:11:48.520 --> 0:11:52.240 mobility to a large segment of the population in those 0:11:52.240 --> 0:11:55.600 markets that was underserved. So they're acting as a very 0:11:55.760 --> 0:12:01.400 nice complementary solution to what existed and even enabling social mobility. 0:12:01.480 --> 0:12:04.240 So you could imagine people who wanted to get a 0:12:04.360 --> 0:12:07.400 job but in their local within their walking distance there 0:12:07.480 --> 0:12:10.880 was no job. Now that person can actually afford to 0:12:10.880 --> 0:12:13.959 travel to the further way and get a joll. So 0:12:14.080 --> 0:12:19.200 in this world of now digital right hailing, we've created 0:12:19.240 --> 0:12:22.360 some jobs. And you actually in this note have a 0:12:22.360 --> 0:12:24.600 little part where you say the holy grail for digital 0:12:24.600 --> 0:12:29.640 hailing services is the realization of robotaxis. UM, I don't 0:12:29.679 --> 0:12:33.200 particularly want the terminator to be driving me around, but 0:12:34.600 --> 0:12:37.280 if the way I see it is you're talking about 0:12:37.360 --> 0:12:40.880 job creation and people themselves buying cars. The fleet is 0:12:40.920 --> 0:12:43.560 not owned by these right hailing services is owned by 0:12:43.600 --> 0:12:48.280 the individual who's going to own the cars if they're robotaxis. 0:12:49.360 --> 0:12:54.800 So again here we shall clarify that. Um, there's the 0:12:55.200 --> 0:12:57.880 differences in each geography. If you look at uber and 0:12:57.960 --> 0:13:01.400 left in North America or in Europe. Um, so we 0:13:01.400 --> 0:13:04.559 were operating Europe as well as you. It's European competitors. 0:13:05.240 --> 0:13:08.880 Right now, they're not profitable and if you look at 0:13:09.080 --> 0:13:12.920 their losses, the number one cost that they have is 0:13:12.960 --> 0:13:17.560 the driver pay. So that's the part that it's still 0:13:18.000 --> 0:13:21.320 proving very challenging for them. Now. They argue that they 0:13:21.320 --> 0:13:24.559 will be able to reduce their auto cost, improve operational efficiency, 0:13:24.559 --> 0:13:28.240 and be able to try to improve their profitability by 0:13:28.280 --> 0:13:31.319 controlling the auto cost. The jury is still out whether 0:13:31.480 --> 0:13:34.920 there's enough of other costs that they can cut while 0:13:35.000 --> 0:13:38.880 keeping the driver In markets like Europe and North America, 0:13:38.960 --> 0:13:41.400 will driver pay even the people argue driver pay is 0:13:41.440 --> 0:13:43.760 really low, it's still it's a little bit of a 0:13:43.800 --> 0:13:47.079 problem in the case of the economics of making those 0:13:47.120 --> 0:13:51.520 companies profitable. So if you replace those with autonous vehicles, 0:13:51.880 --> 0:13:54.760 depending on what the capital cost of the autonous vehicles 0:13:54.840 --> 0:13:57.680 is which you're alluding to. You could argue that you're 0:13:57.760 --> 0:14:01.120 essentially getting rid of this opera cost that you always have. 0:14:01.200 --> 0:14:03.200 So if you think about if you are Uber and 0:14:03.200 --> 0:14:05.320 you want to scale the number of rides you're giving, 0:14:06.480 --> 0:14:08.280 you still have to pay the drivers more and more 0:14:08.280 --> 0:14:11.040 and more, Whereas if you have an autonomous vehicle that 0:14:11.080 --> 0:14:14.680 can go around twenty four hours, then you're essentially reducing 0:14:15.160 --> 0:14:17.959 that operational cost that you're paying the drivers. It's a 0:14:18.080 --> 0:14:21.600 big capital investment, and I assume the insurance is covered 0:14:21.600 --> 0:14:25.080 by the drivers as opposed to these other companies. The 0:14:25.120 --> 0:14:28.160 big difference between being a platform and an owner of assets. Right. 0:14:28.560 --> 0:14:31.280 While you're right that the capital cost would be high, 0:14:31.400 --> 0:14:34.800 the capital cost would be more of a one off payment, 0:14:34.920 --> 0:14:38.920 so as you increase the utilization, that doesn't linearly increase, 0:14:39.000 --> 0:14:43.080 whereas with drivers it's essentially a linear relationship that increases. 0:14:43.560 --> 0:14:46.560 So that's that's for those markets. There is this belief 0:14:46.640 --> 0:14:49.280 that if you have atonus vehicles you'll be able to 0:14:49.320 --> 0:14:51.400 do But the reason we call this, by the way, 0:14:51.440 --> 0:14:53.760 the Holy Grail was the Holy Graian was never found 0:14:55.200 --> 0:14:58.960 even by Indiana Jones he found it. But yes, Okay, fine, 0:14:58.960 --> 0:15:03.160 it's fictional. So this has been a first vehicle sales forecast, 0:15:03.200 --> 0:15:05.280 is that correct? That's right? So in that are you 0:15:05.320 --> 0:15:08.720 giving a hint to what you think the the outcome 0:15:08.720 --> 0:15:11.760 will be for robotaxis. You know you're less optimistic, it 0:15:11.760 --> 0:15:15.080 seems I think we're realistic. So we do give a 0:15:15.120 --> 0:15:18.400 forecast in this view and in our forecast for the 0:15:18.440 --> 0:15:21.880 next ten years. So from now until we expect that 0:15:21.920 --> 0:15:26.600 you will have less than two hunder thou robot taxes 0:15:26.680 --> 0:15:28.600 on the road, not enough to make a meaningful difference 0:15:28.640 --> 0:15:32.840 in sales. From an quantitative perspective, that may seem that 0:15:32.960 --> 0:15:36.000 this is very low, it is still meaningful from the 0:15:36.080 --> 0:15:40.440 perspective of the right hailing companies utilization exactly as well 0:15:40.520 --> 0:15:43.560 as automakers. So if you're an automaker, particularly if you're 0:15:43.560 --> 0:15:46.160 a mass market automaker, if you look at uber and 0:15:46.280 --> 0:15:50.120 Lift in the US, the most popular car that uberan 0:15:50.200 --> 0:15:53.600 Lift drivers drive today in US is a used Prius 0:15:54.680 --> 0:15:57.320 because it's upfront cost is relatively low, it has good 0:15:57.360 --> 0:16:00.040 field economy, so the operation cost is really low. So 0:16:00.120 --> 0:16:02.960 if your Turta, you really care about that, and that's 0:16:02.960 --> 0:16:05.360 why Tota is also invest in uber a TG, so 0:16:05.480 --> 0:16:09.640 they're working together on developing autonomous vehicle technology longer term. 0:16:09.680 --> 0:16:13.200 By twenty forty, we expect that about seven percent of 0:16:13.320 --> 0:16:16.160 the load. So again, looking at the total distance that 0:16:16.200 --> 0:16:18.760 definitely drives in twenty we expect seven percent of that 0:16:18.920 --> 0:16:22.520 to be carried by autonomus vehicles. Seven percent may sound 0:16:22.600 --> 0:16:26.240 relatively low, keep in mind, if you look at the 0:16:26.360 --> 0:16:30.560 total distance the car fullet drove last year, only five 0:16:30.680 --> 0:16:34.000 percent of that total distance was by shared mobility. So 0:16:34.160 --> 0:16:36.680 we expect that five percent in total to grow to 0:16:38.360 --> 0:16:40.320 and off that nine pcent, about one third of it 0:16:40.400 --> 0:16:42.760 will be autonomous. Two thirds of it will still be 0:16:42.880 --> 0:16:46.080 human driven. Now you may argue why would still be 0:16:46.160 --> 0:16:48.600 human driven, and it goes back to what data you 0:16:48.680 --> 0:16:52.280 were alluding to earlier. In markets like India or Southeast 0:16:52.320 --> 0:16:57.200 Asia or Africa, or also even in developed economies, say 0:16:57.320 --> 0:17:02.240 rural United States or rural Europe, from a cost and 0:17:02.360 --> 0:17:05.800 technological perspective, it will still not We don't expect it 0:17:05.880 --> 0:17:09.200 to be feasible to rely on Thomas vehicles, So if 0:17:09.240 --> 0:17:12.760 you're in rural Texas, for example, the utilization rate is 0:17:12.800 --> 0:17:15.480 still relatively low. Also, you have to make sure that 0:17:15.800 --> 0:17:18.760 your technology can adapt to that environment that rural Texas, 0:17:18.880 --> 0:17:21.520 to be fair, the weather is not that bad. But 0:17:21.640 --> 0:17:24.639 you go to rural Wisconsin snows a lot. So you 0:17:24.760 --> 0:17:28.080 run into a lot of practical issues. Um and that's 0:17:28.119 --> 0:17:31.160 where while we do expect the technology to improve a lot, 0:17:32.480 --> 0:17:36.000 we're still from what's known today. There's still a lot 0:17:36.040 --> 0:17:39.080 of challenges that remain to be resolved. About halfway through 0:17:39.359 --> 0:17:44.280 peak car question mark, but you get into this place 0:17:44.359 --> 0:17:49.280 of uncertainties and it seems like there is so much 0:17:49.480 --> 0:17:51.680 to wrap your arms around in terms of what is 0:17:51.720 --> 0:17:55.520 actually influencing car ownership rates as opposed to just do 0:17:55.680 --> 0:17:57.760 I want to be on the tube today or do 0:17:57.880 --> 0:17:59.280 I want to be in my own car? And can 0:17:59.320 --> 0:18:02.280 I find park? So there are three things you outline 0:18:02.359 --> 0:18:05.159 under these fundamental changes to actually how people and more 0:18:05.200 --> 0:18:08.520 importantly goods are moving around at the local level but 0:18:08.720 --> 0:18:11.200 really commonly around the world. Can you outline what those 0:18:11.320 --> 0:18:14.280 three areas are? So one, as you alluded earlier on, 0:18:14.760 --> 0:18:18.640 is around sort of black Swan type so financial crisis 0:18:18.720 --> 0:18:20.960 things like that, or you could put in wars and 0:18:21.080 --> 0:18:23.760 things like that. So those definitely impact. And there's something 0:18:23.840 --> 0:18:27.400 that like unfortunately we are mortal analysts recount forecast those things. 0:18:28.320 --> 0:18:30.960 The second one and the third one, which are areas 0:18:31.000 --> 0:18:32.280 that we're going to do a lot more work on 0:18:32.480 --> 0:18:35.720 in the future. Is one is around the whole impact 0:18:35.840 --> 0:18:39.320 of e commerce. So if you think about e commerce 0:18:39.400 --> 0:18:44.400 and how you are now buying your daily necessities, you're 0:18:44.480 --> 0:18:47.800 essentially more and more eliminating they need to drive to 0:18:47.920 --> 0:18:52.000 the grocery store, or they need to go to cost 0:18:52.040 --> 0:18:54.240 goal on the weekend or something like that. So those 0:18:54.280 --> 0:18:57.720 are areas that could fundamentally impact people's need for cars. 0:18:58.160 --> 0:19:00.119 A lot of times when people talk about one to 0:19:00.200 --> 0:19:02.720 own a car is I want to carry something. So 0:19:02.800 --> 0:19:05.840 if you elimit it that part and you don't need 0:19:05.920 --> 0:19:09.080 to carry heavy loads, then you may argue that maybe 0:19:09.160 --> 0:19:12.280 you can rely on a bicycle. Part of the challenge 0:19:12.320 --> 0:19:14.959 today is like, if you look at the historical correlation 0:19:15.160 --> 0:19:18.200 that I mentioned that we use for forecasting the impact 0:19:18.280 --> 0:19:22.280 of e commerce on that historical correlation has not appeared yet. 0:19:23.040 --> 0:19:25.960 So will this end up in what you guys see 0:19:26.000 --> 0:19:28.760 it as see it appearing? It potentially could, So this 0:19:28.880 --> 0:19:31.320 is an area that you're we're looking at quite extensively. 0:19:31.400 --> 0:19:33.280 This and this ties to the second one, which I 0:19:33.520 --> 0:19:36.400 mentioned briefly the bicycle one. So the question of micro mobility, 0:19:37.000 --> 0:19:41.080 So micro mobility to define it is basically stand up scooters, 0:19:41.480 --> 0:19:45.359 electric assists by bicycles which are provided on a shared 0:19:45.400 --> 0:19:47.520 platform so you don't even have to own it yourself. 0:19:48.320 --> 0:19:51.800 And the reason this is an interesting area is pick 0:19:51.840 --> 0:19:53.960 the United States. If you look at the statistics on 0:19:54.080 --> 0:19:57.080 how cars are using the United States. If you look 0:19:57.119 --> 0:20:00.400 at the numbers from recent um the last couple years, 0:20:01.480 --> 0:20:06.040 roughly sixty percent of the average card trip is less 0:20:06.200 --> 0:20:11.000 than six miles. Within that about half of it is 0:20:11.240 --> 0:20:14.880 less than three miles. Essentially, it's people driving the car, 0:20:15.160 --> 0:20:17.800 the big suv, just going down the street to buy 0:20:17.880 --> 0:20:22.240 some stuff. Now, those are distances that if you're within 0:20:22.640 --> 0:20:24.520 less than two miles, we can easily do with a 0:20:24.560 --> 0:20:27.560 stand up scooter. If it's less than if it's between 0:20:27.600 --> 0:20:29.000 two moles and six months, we can do with and 0:20:29.080 --> 0:20:32.320 that actually this bicycle. And we have seen a lot 0:20:32.400 --> 0:20:36.359 of money go to these shared micro mobility applications. So 0:20:36.640 --> 0:20:39.440 Baird was a bird and line where both some of 0:20:39.560 --> 0:20:44.080 the fastest unicorns ever I think burn for bird. It 0:20:44.160 --> 0:20:47.119 took it less than a year to have evaluation of 0:20:47.119 --> 0:20:50.440 world billion dollars, which is quite remarkable. And there's this 0:20:50.560 --> 0:20:55.159 idea one of the famous um Um sort of gurus 0:20:55.200 --> 0:20:57.280 of micro mobility horse did you like to call it? 0:20:57.520 --> 0:21:01.480 The concept of unbundling the car. So essentially you're looking 0:21:01.560 --> 0:21:04.840 at how people use cars for different applications. There's all 0:21:04.920 --> 0:21:07.560 those applications that you can actually use automodes of transport. 0:21:08.560 --> 0:21:11.159 Are you seeing this outside of major urban center, so 0:21:11.359 --> 0:21:14.479 where a car sometimes comes with more hassle than it's 0:21:14.560 --> 0:21:17.680 worth because I can't see, for example, my brother in 0:21:17.800 --> 0:21:21.399 law in Kentucky hopping on a micro mobility scooter and 0:21:21.520 --> 0:21:24.320 running to the store when he's got a car already 0:21:24.359 --> 0:21:28.640 sitting in the driveway as I see as the summer time. Yeah, 0:21:28.920 --> 0:21:30.960 so there are a lot of open questions. One is, 0:21:31.000 --> 0:21:33.560 as you're alluding to, is the rule versus urban, which 0:21:33.640 --> 0:21:36.959 is a very valid one. So again goes down around 0:21:37.080 --> 0:21:39.920 your what are the distances that we're discussing. The other 0:21:40.000 --> 0:21:42.440 one that I would like to point out is, of course, 0:21:42.520 --> 0:21:47.280 whether so these things initially, particularly stand of scooters, took 0:21:47.320 --> 0:21:52.720 off in California. California sunny is relatively dry, but what 0:21:52.880 --> 0:21:55.600 about say winter in New York. But they also took 0:21:55.600 --> 0:21:58.080 off in Paris right where it reigns a lot. Yeah, 0:21:58.160 --> 0:22:00.520 so now we're starting so this is so thank you 0:22:00.600 --> 0:22:05.000 for making the point. Um. There was initially some skepticism 0:22:05.480 --> 0:22:08.280 which was like, oh, these California vcs are just putting 0:22:08.320 --> 0:22:10.520 money behind something that's not going to go around the world. 0:22:10.960 --> 0:22:13.359 And what we've seen actually is now going around the world. 0:22:13.560 --> 0:22:16.399 And you have also while this some people are I 0:22:16.600 --> 0:22:19.880 think that this is a California thing. Actually shared bicycles 0:22:20.480 --> 0:22:22.760