Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast.
Speaker 2: I'm Joe Wisenthal and I'm Tracy Alloway.
Speaker 1: Tracy, remember the hype about self driving cars from like
Speaker 1: ten years ago, Like that really died out?
Speaker 2: Can I tell you something? Yeah, I'm still holding out
Speaker 2: hope for the self driving cars because I can't drive,
Speaker 2: and it was kind of I forgot. It was kind
Speaker 2: of acceptable when I was in my twenties, but now
Speaker 2: it's starting to get a little embarrassing. So I really
Speaker 2: need the self driving cars to become viable options.
Speaker 1: So when we go on the road and like do podcasts,
Speaker 1: like in another.
Speaker 3: City, you have to drive. I have to drive all
Speaker 3: the time, don't It hadn't because I think I've asked you.
Speaker 3: I'm like, oh, Tracy, you're renting a car.
Speaker 1: And then you like sort of change the discussion or
Speaker 1: you bring up something else, like oh, I think there's
Speaker 1: Ubers in that town or something.
Speaker 3: But this is the real reason, isn't it.
Speaker 2: Well, I mean there are Ubers everywhere, you know. What
Speaker 2: we should talk about whether or not Ubers have decreased
Speaker 2: enthusiasm for self driving cars as a business model.
Speaker 1: Remember when people used to say Uber would never make
Speaker 1: any money if they still had to pay humans, but.
Speaker 3: Now they're making a little money.
Speaker 2: It's true.
Speaker 1: But I do think like generally, like when people talk
Speaker 1: about like tech that didn't live up to the hype
Speaker 1: and now you see it now with like chatbots and
Speaker 1: stuff like that, and whether they're legan chain like people
Speaker 1: go back to the self driving cars, Like to me,
Speaker 1: that's the sort of quintessential example of the like modern times,
Speaker 1: maybe three D printing. You don't really hear that much
Speaker 1: about it.
Speaker 2: Yes, but don't you also find it weird to imagine
Speaker 2: a future in two or three hundred years where there
Speaker 2: wouldn't be self driving cars. It feels at once both
Speaker 2: inevitable and like hype, if that makes sense, like an artificiality.
Speaker 1: No, I mean I definitely, I definitely agree two hundred
Speaker 1: and three hundred years, that's like that's a long time,
Speaker 1: like fifty years from now.
Speaker 2: I've kind of you think fifty years from now.
Speaker 1: Well, so this is the question, which is like my
Speaker 1: is not an area I know that well, but my
Speaker 1: impression is it's like look sort of classic thing where
Speaker 1: like tech got us like ninety five percent of the
Speaker 1: way there, and then there are some edge cases that
Speaker 1: make self driving cars difficult. I don't know exactly what
Speaker 1: they are, but that getting that last five percent or
Speaker 1: whatever is so hard that it renders the whole thing
Speaker 1: very difficult, and that whatever that last percent is is
Speaker 1: the difference between the tech being like wow, versus actually
Speaker 1: changing the world.
Speaker 2: We are so close and yet so far.
Speaker 3: Yeah, it's one of those things.
Speaker 1: And I feel like again with chatbots and some of
Speaker 1: these other like current like artificial intelligence applications, it comes
Speaker 1: back to this question of like, yes, it's really great
Speaker 1: and it sort of blows your mind, but there are
Speaker 1: these hallucinations another thing, and like if it's not it's
Speaker 1: not one hundred percent reliable, does that mean it really
Speaker 1: won't be as disruptive as people expect.
Speaker 2: Well, the other thing I'm curious about is whether or
Speaker 2: not that sort of last five percent that you're describing,
Speaker 2: whether that's on the software or the hardware.
Speaker 3: Oh yeah, because that has.
Speaker 2: Implications for you know, if we do make huge leaps
Speaker 2: and artificial intell leigence, maybe that solves a software problem.
Speaker 2: But maybe the issue is actually that the sensors are
Speaker 2: too basic or too expensive, that sort of thing.
Speaker 3: I don't know the answer to any of these questions.
Speaker 1: The one other thing I'll say too, is like there
Speaker 1: is a lot of car talk these days.
Speaker 3: We've been doing more and more on the podcast.
Speaker 1: It's entirely like on the sort of EV charging side,
Speaker 1: and how are EV's and how EV production and batteries,
Speaker 1: like how are they going to reshape the industry? Or
Speaker 1: Chinese exports, how are they going to reshape the industry?
Speaker 1: It does not seem like again ten years ago the
Speaker 1: big question was like who's ahead in the self driving
Speaker 1: car race? Google, GM or Ford. There was much less
Speaker 1: talk then about EV's is the big disruptor?
Speaker 2: Right, So I think it is time for a checkup,
Speaker 2: right on what's going on with self driving cars?
Speaker 3: It is time for a checkup.
Speaker 1: And our guests says they're back, that they're happening for real.
Speaker 1: And I do believe him to some extent because I
Speaker 1: follow some people who live in San Francisco and they're
Speaker 1: tweeting about it more and more that they see them
Speaker 1: on the road. And sometimes when I'm up but four
Speaker 1: in the morning to read the Internet in the dark
Speaker 1: and drink coffee, I see like people who are still
Speaker 1: out at night in San Francisco talking about all the
Speaker 1: self driving cars around them, So there might actually be
Speaker 1: it may not be totally over.
Speaker 3: There might be they might be back.
Speaker 2: Well, the things I see on the internet about self
Speaker 2: driving cars are those edge cases where it's like a
Speaker 2: car flum mixed by a traffic cone in the middle
Speaker 2: of the street, which they're simultaneously like impressive and amusing
Speaker 2: and disappointing all at the same time. If that makes sense.
Speaker 3: It's interesting.
Speaker 1: You're very pro self driving cars. It hadn't clicked, like
Speaker 1: you really want this to happen.
Speaker 2: I have a personal self interest in not having to
Speaker 2: learn how to drive. I figure if I'm super optimistic,
Speaker 2: maybe maybe if I just hang on for like another
Speaker 2: ten years, Yeah, maybe, I don't know. Let's ask our guests.
Speaker 1: Let's ask our guests. We have the perfect guest, longtime
Speaker 1: tech journalists, a tech understander, someone who really deep delves
Speaker 1: deep into technology to understand like how things work and
Speaker 1: what's really happening. I followed his work for a long time.
Speaker 1: We're actually like we're colleagues together, like eighteen years ago,
Speaker 1: I think at a side called tech dirt.
Speaker 3: Tim Lee.
Speaker 1: He is the author of the understandingai dot org newsletter
Speaker 1: longtime tech journalist, and he recently wrote a piece the
Speaker 1: death of self driving cars is greatly exaggerated.
Speaker 3: So, uh, Tim, great to have you on the show.
Speaker 4: Hey, I'm great to be and I'm a fan of
Speaker 4: the podcast.
Speaker 3: Thank you very much, appreciate that.
Speaker 1: Let's start ten years ago, and you know, I think
Speaker 1: ten years ago there was a lot of self driving
Speaker 1: car hype and my impression was, and this is so
Speaker 1: vague and fuzzy, it's like, oh, most of it solved,
Speaker 1: but this last part's really hard.
Speaker 3: Is that true? What was that.
Speaker 1: Last part that has proven to be very challenging to
Speaker 1: like turn these from like prototypes onto track or a
Speaker 1: very like organized grid like suburb in Arizona to something
Speaker 1: that could actually be used on the road.
Speaker 5: So it is true that about ten years ago, Google
Speaker 5: was the leading company and they had vehicles that could
Speaker 5: go on certain routes with a fair amount of kind
Speaker 5: of preparation. And about six years ago Google rebranded itself
Speaker 5: as Weimo, it's self driving cart projects as Wemo, and
Speaker 5: started testing a taxi service in Phoenix, and they've been
Speaker 5: plugging away at that ever since. There were a bunch
Speaker 5: of other startups that were started between about twenty fourteen
Speaker 5: and twenty eighteen, say, and a lot of those failed
Speaker 5: or were forced to sell to some of the tech giants,
Speaker 5: And so there's many fewer companies operating in this space
Speaker 5: than the word five or six years ago. In terms
Speaker 5: of what the last little bit is, it's just a
Speaker 5: lot of little things. I mean, that's the thing about
Speaker 5: a long tail is there's a lot of stuff out
Speaker 5: in the long tail. One thing, for example that Weimo
Speaker 5: and Cruz the kind of industry leaders have been struggling
Speaker 5: with is when you deal with first responders. For example,
Speaker 5: if we hope to an active fire site, you're not
Speaker 5: supposed to dive over the hoses that firefighters are using.
Speaker 5: I mean, that's something you might only encounter every one
Speaker 5: hundred thousand miles or something.
Speaker 4: And so there's just lots of it's a really big
Speaker 4: deal to do it.
Speaker 5: Yes, absolute there's another case where a crew is vehicle
Speaker 5: like drove through a police tape in a crime scene.
Speaker 5: So there's lots of little things that I saw a headline.
Speaker 5: I haven't actually looked into this yet, but apparently a care
Speaker 5: is like drove into web codcrete. So the real world
Speaker 5: is complicated and there's just lots of weird situations that
Speaker 5: a human being because we kind of understand how the
Speaker 5: world works. You see, Oh that looks like web concrete.
Speaker 5: I shouldn'tdrive on that. But you just have to, Like
Speaker 5: it's like whack mole. You have to like hit every
Speaker 5: single like bad thing a vehicle can do it. That
Speaker 5: just takes a lot, a lot, a lot of work.
Speaker 2: Yeah, I don't know why, but I find all the
Speaker 2: stories of like robotic self driving cars behaving badly absolutely hilarious.
Speaker 2: And not the ones where they hurt people I should
Speaker 2: just caveat that, but the ones where, you know, something
Speaker 2: that we wouldn't even think about, you know, there's an
Speaker 2: object in the road, just go around it, and they
Speaker 2: seem to really struggle with I want to ask you
Speaker 2: more about why that seems to be an issue and
Speaker 2: sort of get into some of the edge cases that
Speaker 2: Joe mentioned in the intro. But before we do, why,
Speaker 2: here's a basic question. Why have a lot of these
Speaker 2: self driving car companies struggled Because on the face of it,
Speaker 2: it would appear that there is a lot of money
Speaker 2: floating out there in venture capital land that often goes
Speaker 2: into unrealistic or unprofitable unprofitable projects. So why has this
Speaker 2: been an issue for self driving cars in particular?
Speaker 5: I mean, I think on some level the basic issue
Speaker 5: with safety a lot of other areas of tech. You
Speaker 5: kind of build them in a viable product and you
Speaker 5: put it out in the world and you know it
Speaker 5: breaks sometimes, but that's fine, Like that gets you more feedback.
Speaker 5: And because you can kind of iterate rapidly, you can
Speaker 5: like scale up very quickly and get to a profitable
Speaker 5: scale pretty quickly. That obviously doesn't work if if the
Speaker 5: moving fast at breaking things is like literally breaking things
Speaker 5: and killing people. And so you have to be very
Speaker 5: close to perfect before you can launch a commercial service
Speaker 5: and start making money. And so you had a bunch
Speaker 5: of startups that were trying to do this. They had
Speaker 5: all starts of strategy to do that. Some were trying
Speaker 5: to operate in retirement communities or do like package delivery.
Speaker 5: They try to find kind of less demanding applications than
Speaker 5: like drive anywhere any time. But it's just really really hard.
Speaker 5: And so the companies that have sustained are the ones
Speaker 5: that have Amazon, Google, GM like big companies behind them
Speaker 5: who are willing to put like a billion dollars a
Speaker 5: year behind them for several years in a row while
Speaker 5: they kind of try to iron out these final little wrinkles.
Speaker 1: So zooming forward today and that makes a lot of sense.
Speaker 3: I hadn't really thought about that.
Speaker 1: It's like for many tech it's okay if there are
Speaker 1: edge cases where it doesn't work, because you just sort
Speaker 1: of like, well, you put out in the world and like, yeah,
Speaker 1: it's not a perfect product, but into minimum via, it's free.
Speaker 2: And we're refining it.
Speaker 3: It's free and we're iterating.
Speaker 1: But you cannot do that when there's big safety issues
Speaker 1: and if it's a threat to other drivers or pedestrians,
Speaker 1: it's not really an acceptable way to do product. Going
Speaker 1: to today and you are more optimistic and we'll get
Speaker 1: to that about the prospects for their existence. But has
Speaker 1: there been a breakthrough in recent years or has it
Speaker 1: just been this slow, iterative grinding away at the edge
Speaker 1: cases that it makes it so that there are fewer
Speaker 1: and fewer edge cases.
Speaker 5: I would say the second one. I mean, Weymo's technology
Speaker 5: has worked pretty well. They started doing fully driver less
Speaker 5: operations in Phoenix in the fall of twenty twenty, and
Speaker 5: I have just very gradually expanded that service now weimo
Speaker 5: I just a week or two ago they got permissioned
Speaker 5: from California regulators to begin operating commercially in San Francisco
Speaker 5: after a year or two of doing practice driving there,
Speaker 5: and so yeah, they've they've just been plugging away at it.
Speaker 5: And it's hard to tell from the outside because they're
Speaker 5: not super transparent about all the details of you know,
Speaker 5: how many incidents they have or how much work they
Speaker 5: have to do on the back end. But yeah, it
Speaker 5: seems like they're just very gradually making the technology better.
Speaker 5: And they seem to think because they're now talking about
Speaker 5: scaling up much more quickly, they seem to think that
Speaker 5: the companies seem to think that they're that this is
Speaker 5: ready for it to be a commercial product.
Speaker 1: Just a really simple question. If I were to go
Speaker 1: to San Francisco right now, could I go there and
Speaker 1: download an app or whatever and get in a self
Speaker 1: driving tax.
Speaker 5: You know, I haven't checked that recently, So it was
Speaker 5: literally like last week or the week before the California
Speaker 5: regulators gave them permission to do that, I think, And
Speaker 5: so till like last week, I think it was a
Speaker 5: waiting list. But it's definitely case, you go to certain
Speaker 5: parts of Phoenix, including the Phoenix Airport, you can hail
Speaker 5: a taxi and it's just like Uber left.
Speaker 4: You can try it.
Speaker 3: I want to do it. I want to do it, Tracy.
Speaker 3: Let's go.
Speaker 1: Let's go to Phoenix, just so that for the one
Speaker 1: ride then fly back.
Speaker 4: Sure. Yeah, I talk to people there. I mean it works,
Speaker 4: it works quite well. I mean the people.
Speaker 5: I've talked to several people who've written in those vehicles
Speaker 5: and at least in both rides they say it's flawless,
Speaker 5: that drives very comfortably.
Speaker 4: And yeah, the service they just aren't that many refuges.
Speaker 2: Can we talk a little bit more about the edge stuff,
Speaker 2: because my my impression is that, Okay, computers learn from
Speaker 2: repetition and from modeling out various scenarios, but driving is
Speaker 2: such an infinitely unpredictable experience, especially if you're in New York.
Speaker 1: You could get you get it, Like if this technology
Speaker 1: you'd never taken off, I have confidence you could do.
Speaker 2: I don't know. I think I've missed the boat on
Speaker 2: that one. But anyway, okay, but there are all these
Speaker 2: different possibilities that a self driving car could be grappling with.
Speaker 2: So for instance, an animal runs out in the middle
Speaker 2: of the street, and you know, maybe after that happens
Speaker 2: several times, the self driving car starts to realize, well,
Speaker 2: it's this animal, and then it's going to behave in
Speaker 2: this way and keep moving or stop, and I need
Speaker 2: to respond to it in a certain way. But that
Speaker 2: kind of seems to be the issue here as far
Speaker 2: as I understand it.
Speaker 5: Yes, absolutely, And there's a bunch of ways that the
Speaker 5: companies have tried to do this. So, for example, Google
Speaker 5: has long had a big test track facility out in
Speaker 5: in California about an hour I went out there a
Speaker 5: few years ago, where they have some fake roads and
Speaker 5: they'll create kind of fake scenarios. They'll have cars cutting
Speaker 5: other cars off, or have somebody like moving box of
Speaker 5: the Cross, the three People and Halloween costumes something like that,
Speaker 5: and so they try to think of what are all
Speaker 5: the situations of the self driving car could run into
Speaker 5: and kind of anticipate that. And this is also why
Speaker 5: they started in Phoenix, is one of their strategies was, Okay,
Speaker 5: there's so many ED cases, we can't do them allay
Speaker 5: all at once, and so let's start a kind of
Speaker 5: easy mode. And so Phoenix has very nice weather, nice
Speaker 5: wide streets, well marked, you know, not a lot of pedestrians,
Speaker 5: not a lot of bicyclists, and so that was kind
Speaker 5: of way most theory was that we'll do the easiest
Speaker 5: one first. The issue with that is that the economics
Speaker 5: of running a taxi service in theaters are not that
Speaker 5: great because most people already have cars, and so Cruise
Speaker 5: has kind of had the opposite approach. It's is, we
Speaker 5: want to see these educations as fast as possible, So
Speaker 5: let's start in downtown San Francisco, because that's where there's
Speaker 5: a ton of crazy situations, and so we will kind
Speaker 5: of be harder in the first place, but we gathering
Speaker 5: data very quickly and they will master it.
Speaker 4: And is not yet clear yet.
Speaker 5: I mean, both both companies now seem to think they're ready,
Speaker 5: but I don't think we've seen them in a while
Speaker 5: long enough to have a sense for kind of which
Speaker 5: of those strategies are working better.
Speaker 4: But yeah, it's really tough, and so so I.
Speaker 5: Should say, like for the first few years, both of
Speaker 5: these companies had safety divers behind the wheel of every vehicle,
Speaker 5: and so the vehicle was mostly diving itself. But if
Speaker 5: it got stuck, that says or down would have to
Speaker 5: take over. And the kind of big switching. The big
Speaker 5: risky point is when they take the first starts out
Speaker 5: of the car, which WM one did about two years ago,
Speaker 5: and cruise did I think maybe a.
Speaker 4: Year ago, and then you know, and then that is
Speaker 4: it because the.
Speaker 5: Must trickier because if the vehicle screws up, it's a
Speaker 5: big deal.
Speaker 2: I love the idea of having to train the self
Speaker 2: driving cars by like putting people in Halloween costumes in
Speaker 2: front of them, and it reminds me a lot of
Speaker 2: socializing my dog because we used to have to like
Speaker 2: wear weird hats right, or like bring balloons into the
Speaker 2: house so that he would get used to them and
Speaker 2: not freak out. But this goes back to something that
Speaker 2: I mentioned earlier, which is is the issue here the software,
Speaker 2: so like the actual modeling of the reaction to an
Speaker 2: unknown or unfamiliar event or stimulus, or is it more
Speaker 2: on the hardware side where maybe you need better sensors
Speaker 2: that are better able to appreciate the things in front
Speaker 2: of you.
Speaker 5: I would say it's more software, particularly more data. But yeah,
Speaker 5: the hardware has stayed pretty constant. I mean that the trio
Speaker 5: of sensors. Most of these vehicles have our cameras, radar,
Speaker 5: and then lighter, which is a like laser laser range
Speaker 5: finding technology that gives you kind of a three D
Speaker 5: map of your environment. And so ten years ago Google's
Speaker 5: car has had those three sensors, and I think now
Speaker 5: those sensors are better. But I don't think anybody thinks
Speaker 5: the main issues that we need to upgrade in the
Speaker 5: quality to light are really they just need they need
Speaker 5: examples of every possible educase, and they you know, it's
Speaker 5: hard to get enough of that data because some educses
Speaker 5: happen very rarely but can be very serious if you
Speaker 5: encounter them.
Speaker 1: Can you give us a quick industry overview? You know
Speaker 1: you mentioned Weimo, it's Weimo's Google Cruises, GM Cruises GM
Speaker 1: and then obviously Tesla and Elon's all Like if you
Speaker 1: just like raid Elon's Twitter feed, you would think that
Speaker 1: they've already had self driving cars like in the wild,
Speaker 1: And I don't really think that's true, but I don't
Speaker 1: really understand what's going on. Can you give like a
Speaker 1: really just sort of quick like overview who the big
Speaker 1: players are, like who owns them, and just sort of
Speaker 1: like what their status is.
Speaker 4: Yes, absolutely so.
Speaker 5: Wemo is mainly owned by Google, Cruise is mainly owned
Speaker 5: by GM. I consider Tesla to be in a different market,
Speaker 5: and some of the Tesla fans get mad at me
Speaker 5: when I say this, But Tesla is building a.
Speaker 4: Driver systems product.
Speaker 5: So all pretty much any car you drive now they
Speaker 5: have advanced cruise control where it stays in your lane
Speaker 5: and doesn't hit the car in front of you. In
Speaker 5: some ways, I think Tesla has a more advanced version
Speaker 5: of that, although also in some ways I think it's
Speaker 5: Elon must just has a low or risk tolerance and
Speaker 5: so he's kind of pushing a technology that's anyway. But
Speaker 5: so so, the key thing about the Tesla product is
Speaker 5: you were not supposed to, like crawl in the back
Speaker 5: seat and take a nap, right You're supposed to be
Speaker 5: there making sure it doesn't break.
Speaker 1: And have people crawled in the back seat and taken
Speaker 1: a nap.
Speaker 5: I'm sure somebody has that. There are videos of people
Speaker 5: doing it appropriate things well behind the wheel of the Tesla,
Speaker 5: but you're definitely not supposed to. And you know the
Speaker 5: vehicles that they have ways.
Speaker 4: Of monitoring the driver so that that doesn't happen.
Speaker 5: But anyway, So theoretically Elon Musk thinks they're going to
Speaker 5: at some point to get to the point where you
Speaker 5: don't have to be behind the wheel. But I do
Speaker 5: not think they're close to that or really laying groundwork,
Speaker 5: because one of the things for any service like that
Speaker 5: is you need an operation staff because the vehicle is
Speaker 5: occasionally get to get stuck, and when that happens, it
Speaker 5: used to be able to phone home and get kind
Speaker 5: of remote guidance about how to deal with it. And
Speaker 5: as far as they know, Tesla's not doing it anyway.
Speaker 5: So that's Tesla and then the other two companies. There
Speaker 5: are a few other companies I would say a little behind.
Speaker 5: So Amazon has a company called Zookes that used to
Speaker 5: be a startup but acquired by Amazon a couple of
Speaker 5: years ago.
Speaker 4: And there's a company called Motional.
Speaker 5: That is also I think close to being ready for
Speaker 5: driver lists, but not to driver lists. And then there's
Speaker 5: a company called MOBILEI that supplies the hardware for most
Speaker 5: of these driver assistance systems and they have been working
Speaker 5: on this technology. So that's another company. But guess I
Speaker 5: say those four or five companies are the kind of
Speaker 5: the remating players.
Speaker 1: Am I hallucinating this memory? Or was there a situation
Speaker 1: in which Uber hired every single member of the Carnegie
Speaker 1: Mellon University Robotics department to work out self driving cars
Speaker 1: for them?
Speaker 4: Yes? Absolutely, so, yeah that was one.
Speaker 3: That's a real thing that actually happened.
Speaker 5: Yes, that was in I mean, I don't know if
Speaker 5: it was every member, but yes, Uber hired a bunch
Speaker 5: of talent in twenty sixteen, twenty seventeen, and then one
Speaker 5: of their vehicles struck and killed somebody in Tempa, Arizona
Speaker 5: in twenty eighteen, and that basically destroyed their program. And
Speaker 5: so I think the remnants Oh actually I should say
Speaker 5: there's a startup called Aurora that is doing tracking.
Speaker 4: I think Uber. They acquired Uber's thing.
Speaker 5: But anyway, yeah, so Uber is now not a player
Speaker 5: because in large part because they're really the only only
Speaker 5: one of these fully self driving programs that have had
Speaker 5: a fatality with their with their testing.
Speaker 2: So let's assume that self driving cars become a realistic thing.
Speaker 2: How viable is that as a business model, Because on
Speaker 2: a first reading, it seems extremely expensive to develop, possibly
Speaker 2: extra extremely expensive to maintain if you have to provide
Speaker 2: operational support to all these robot cars out in the field.
Speaker 2: And then thirdly, it does seem like there's a big
Speaker 2: regulatory slash, safety slash, maybe legal liability risk if something
Speaker 2: were to happen.
Speaker 5: I mean, I'm pretty optimistic about it because you think
Speaker 5: about if you think about Uber and Lyft, about half
Speaker 5: of the cost of running Uber and Lyft is the
Speaker 5: labor of the human driver, and so if you take
Speaker 5: that out, then Wayman Cruise need to get the new costs.
Speaker 5: The cost of the sensors plus whatever operational stuff in
Speaker 5: r indeed to be less than half the cost of
Speaker 5: the driver, and that's a pretty significant amount of money.
Speaker 5: And so I think it'll take them a while to
Speaker 5: get to the scale where it's profitable, because certainly Wayman
Speaker 5: crews both have I think hundreds or maybe thousands of
Speaker 5: people working on this technology, and the sensors are currently
Speaker 5: pretty expensive. But one of the most predictable things in
Speaker 5: business is that mass manufacturing technologies like light our sensors
Speaker 5: and computer chips get cheaper at scale, and so I
Speaker 5: have no doubt that in the long run this is
Speaker 5: going to be a viable business and is really I
Speaker 5: think a question of how much patience the big companies
Speaker 5: back in Google, GM and Amazon companies like that, how
Speaker 5: many billions of dollars they want to spend to get
Speaker 5: to this. But I think that in the long run,
Speaker 5: I think that the taxi industry will be operated by
Speaker 5: self driving cars. And I think that in the long run,
Speaker 5: I also think it'll be cheaper and probably expand the
Speaker 5: market a lot. So my long run expectation is that
Speaker 5: this is going to be a big and profitable industry.
Speaker 2: Do you envision it just or primarily for taxis or
Speaker 2: could you have a situation where people like me are
Speaker 2: buying self driving cars?
Speaker 1: Well, just to add on to Tracy's question, because sort
Speaker 1: of dovetails, could Tracy drive to work and then make
Speaker 1: some extra money by during the day when it would
Speaker 1: be parking for eight hours, have it be a taxi,
Speaker 1: and then could that impair total volume sales for the
Speaker 1: automakers because basically Tracy takes her self driving car to work,
Speaker 1: but then also is a You know, I could the taxi.
Speaker 2: Industry driving car capitalists.
Speaker 1: Rather than having the car sit for eight hours in
Speaker 1: the parking lot ten hours?
Speaker 2: Smart?
Speaker 4: Right?
Speaker 5: So I think certainly, I think the initial product is
Speaker 5: going to be a taxi service. That's what all the
Speaker 5: people doing passenger nobody's talking about selling them in the
Speaker 5: short run. Obviously, people like owning cars, and so in
Speaker 5: the long run, I think there.
Speaker 4: Will be a business model you'll be able to have
Speaker 4: a car.
Speaker 5: My guess is that it's going to be something more
Speaker 5: like a long term lease than actual outright ownership.
Speaker 4: But partly for liability reasons.
Speaker 5: I mean, if you imagine if you own the car
Speaker 5: and the brak needs a replacement and you don't replace
Speaker 5: it in the car crashes to kill somebody, the people
Speaker 5: who made the software going to get suited for that,
Speaker 5: and so I think they're going to be reluctant to
Speaker 5: sell people sell driving cars out right, but you might
Speaker 5: be able to have something that's a long term release.
Speaker 5: It's effectively the same as ownership. I'm not sure it
Speaker 5: would make that much sense. I mean, if if you're
Speaker 5: the kind of person who wants to share a car
Speaker 5: with other people, then probably you would just take a taxi.
Speaker 4: So I'm not sure.
Speaker 5: I mean, there's a lot of ways the economics could
Speaker 5: work out with My guess is that you'll have some
Speaker 5: people who will lease a South diardan car long term,
Speaker 5: and other people who will just take taxis. And I
Speaker 5: think that hopefully, like in the long run, if economy
Speaker 5: skill bring costs down, it'll be much cheaper than the
Speaker 5: taxi today, like roughly half the price if you figured
Speaker 5: that half is labor and so then that'll allow lots
Speaker 5: of people, especially in cities, to own fewer cars and
Speaker 5: take more taxi rides.
Speaker 1: But I was just going to say, even if you didn't,
Speaker 1: and I know other people have said this before, but
Speaker 1: maybe Tracy doesn't want to share her car with other
Speaker 1: people during the day, but it could mean less need
Speaker 1: for parking, right, the car could drive home and go
Speaker 1: back into your driveway or garage while you're at work, yes,
Speaker 1: and then pick you up with Then then the amount
Speaker 1: of space that a city or a neighborhood needs for
Speaker 1: parking probably could be significantly diminished.
Speaker 5: Yes, absolutely, And I think I think one underestimated benefit
Speaker 5: of this from an urban planning perspective is it'll be
Speaker 5: much easier to do congest and charging because the vehicles
Speaker 5: will all be connected, and so I could imagine more
Speaker 5: kind of complicated pricing where you give people a strong
Speaker 5: incentive not to drive their car into downtown. If you're
Speaker 5: going to go downtown, take a taxi or maybe some
Speaker 5: kind of shared vehicles.
Speaker 4: So there's a lot of I think sell driving cars will.
Speaker 5: Open up a lot of new options for the way
Speaker 5: you kind of organize, especially commutes, because yeah, you can
Speaker 5: have different kinds of vehicles and different kinds of business
Speaker 5: models for how people pay for them.
Speaker 2: Could I use my self driving car to deliver packages
Speaker 2: as a sort of gig FedEx worker or something. I
Speaker 2: hear ups drivers cost a lot nowadays, so you know.
Speaker 5: Right, I mean again, I think that'll be a different market.
Speaker 5: So there's a company called Neuro that is trying to
Speaker 5: do this. Several companies act, but I think they're the
Speaker 5: market leader, so I think it's possible. I mean, one
Speaker 5: of the issues is, you know, with the FedEx drive,
Speaker 5: the FedEx Star physically gets out of the car, out
Speaker 5: of the truck and carries the package to your front door.
Speaker 4: And obviously your self driving cars can to be able
Speaker 4: to do that.
Speaker 5: So I'm not sure exactly what that market will look like,
Speaker 5: but my guess is that there'll be customized delivery vehicles
Speaker 5: that are much smaller and lighter and cheaper than a
Speaker 5: full sized car, because there's no reason you need a
Speaker 5: full car if there's nobody in the vehicle.
Speaker 1: Can I ask a question about safety? You know, you
Speaker 1: mentioned that Uber's self driving car pilot program ended basically
Speaker 1: because a car struck and killed a pedestrian. It is
Speaker 1: also true that human driven cars are killing people every day.
Speaker 1: I believe there's tens of thousands of people every year
Speaker 1: die in auto accident. Do we have meaningful apples to
Speaker 1: Apple statistics or is it that's still so far that
Speaker 1: the test that the self driving car universe is too
Speaker 1: narrow or in two ideal conditions to actually do a
Speaker 1: safety comparison.
Speaker 5: It's actually just the raw number of miles is not
Speaker 5: high enough. So well, it's true that humans kill forty
Speaker 5: thousand people a year.
Speaker 3: That's a staggering number. Yeah, number of people.
Speaker 5: But humans humans drive billions or trillions of miles every year,
Speaker 5: and so it's like one there's a fatality once every
Speaker 5: hundred to hundred million miles roughly on the roads. And
Speaker 5: self driving cars are in the tens of millions of miles.
Speaker 5: So if they were as safe as a human you
Speaker 5: would expect about one less than one death so far,
Speaker 5: and so the fact that there has been only one
Speaker 5: death doesn't really tell you that much about.
Speaker 4: You know, is is it more or less safe?
Speaker 5: I mean, so far the way one Cruise, the leaders
Speaker 5: have had zero deaths, but they've gotten less than hundred
Speaker 5: million miles.
Speaker 4: So you just guessed. I think it's just too soon
Speaker 4: to say for sure.
Speaker 2: How much does the business model or the eventual profitability
Speaker 2: of a lot of these self driving car companies depend
Speaker 2: on the way the insurers react, because I imagine, you know,
Speaker 2: if there is an accident involving a self driving car
Speaker 2: and there's negligence involved, or you know, something's wrong with
Speaker 2: the model, the legal liability is almost infinite at that point,
Speaker 2: potentially millions and millions of dollars of payout if there
Speaker 2: are actual fatalities. And I guess my question is a
Speaker 2: lot of this is going to depend on the insurers
Speaker 2: being willing to take on that risk, right, Yeah, you.
Speaker 5: Know, I'm not actually sure exactly what Google and Cruise's
Speaker 5: insurance situations are. I mean, they're big enough companies that
Speaker 5: I would guess they can self ensure, so that's actually
Speaker 5: not something I have and I assume they've disclosed in
Speaker 5: some regulatory filing how they're insured. But it's a different
Speaker 5: market because it's not especially in the early years, it's
Speaker 5: not going to be individual consumers buying insurance. And so yeah,
Speaker 5: I'm not actually sure what the structure of that market
Speaker 5: is right now, and whether they have third party insurance
Speaker 5: or they're just on the hook for the liability.
Speaker 2: That'd be interesting to look at.
Speaker 1: You can this just a really simple regulatory question right now.
Speaker 1: If one of these companies said, we're good, we got it.
Speaker 1: You want to get a taxi at or you want
Speaker 1: to do canniball run, and you want to go coast
Speaker 1: to coast We'll drive you from New York to California.
Speaker 1: Could they legally do it or is there still some
Speaker 1: sort of like regulatory blessing that would need to happen
Speaker 1: for that to exist.
Speaker 5: There's very little regulation at the federal level. There's some
Speaker 5: regulation of the design of the vehicle. For example, you
Speaker 5: still need to have a steering wheel in the car,
Speaker 5: but at the federal level, I don't think there'd.
Speaker 4: Be any legal barriers to do that at the state.
Speaker 5: Level, at state by state, I think if you weren't challenged,
Speaker 5: if you weren't charging for it, and just doing as
Speaker 5: a demonstration.
Speaker 4: I don't think there'd be any issue in most but.
Speaker 5: As I mentioned, so, California I think is one of
Speaker 5: the states that regulates these things more heavily, and they
Speaker 5: do have a fairly substantial process. They treat Way one
Speaker 5: cruise similarly to the way Uber lift or regulated, and
Speaker 5: they just got the approval to start doing commercial taxi
Speaker 5: rides in San Francisco. So yeah, it's state by state,
Speaker 5: and Phoenix I believe this close to no regulation of
Speaker 5: that kind of thing, so yeah, and I think Texas
Speaker 5: is probably similar, so that the more kind of Republican
Speaker 5: leaning states, there's very regulation. In California has some, but
Speaker 5: not enough that it's really I think of a major bottlement.
Speaker 2: So we discussed that there are some self driving cars
Speaker 2: available out there, but they're kind of a novelty slash
Speaker 2: experiment at the moment. How will we know when self
Speaker 2: driving cars are a sort of viable, realistic thing. What
Speaker 2: are you watching out for?
Speaker 5: I think they're running the experiment right now. So Cruz
Speaker 5: has announced I think eight to ten new cities, mostly
Speaker 5: in the Southwest, places like Houston, Dallas, Miami, Atlanta, Nashville,
Speaker 5: and we'll just kind of have to see how quickly
Speaker 5: that happens, or if it happens. I mean, it certainly
Speaker 5: wouldn't be the first time that a company has made
Speaker 5: an announcement in the self driving space that hasn't panned out.
Speaker 5: But they've gone from just Phoenix to now Phoenix and
Speaker 5: San Francisco, and I think anyway, so we'll just have
Speaker 5: to watch and see if those announcements actually turned into
Speaker 5: operating services. Like I said, right now you can go
Speaker 5: to Phoenix, you can try it. I think in the
Speaker 5: next few weeks or months, you'll be able anybody to
Speaker 5: be able to pail a car in San Francisco. And
Speaker 5: then the other thing is the service territory. So right
Speaker 5: now it's not all of the Phoenix Matoria, it's I
Speaker 5: think a couple hundred square miles, and so yeah, we'll
Speaker 5: want to watch what cities are they're going into and
Speaker 5: how big of a service foot and then that does
Speaker 5: that service footprint grow over time, And then ultimately we'll
Speaker 5: have to see the financial results. I mean, these are
Speaker 5: both publicly traded companies, so eventually I assume they'll tell
Speaker 5: us if it's profitable. I don't think it is yet,
Speaker 5: but yeah. I think if you see them rapidly scaling
Speaker 5: up the number of vehicles in the number of cities,
Speaker 5: then that'll be a sign that it's going well.
Speaker 4: And if it's if it doesn't, then probably isn't going
Speaker 4: as well.
Speaker 1: I'm not kidding, by the way, about going to Arizona
Speaker 1: just to travel, because we already want to do an
Speaker 1: Arizona tour anyway with all of our land and water
Speaker 1: and ELFELFA and Chips episodes we do there, So we
Speaker 1: got to fly there just to take a self driving car.
Speaker 1: I just have like one more question, and it's basically,
Speaker 1: you know here in New York, I don't think there's anything.
Speaker 1: But let's put a real time frame on this, like
Speaker 1: you say, like you know, you say they're coming. We're
Speaker 1: going to start seeing them more and more in some
Speaker 1: of these other cities. When can we say, like, you know,
Speaker 1: when will we have them in New York and give
Speaker 1: us a year by which we could say, Okay, Tim
Speaker 1: was right or Tim was wrong.
Speaker 5: So I don't have to make if I'm making a
Speaker 5: strong prediction that you know that on a specific So
Speaker 5: I will say what Wimo and Cruz have said.
Speaker 4: I believe Weimo has said.
Speaker 5: They're planning to increase their footprint by ten x by
Speaker 5: the end of next year, and Cruise has says they're
Speaker 5: going to reach a billion dollars in revenue, which I
Speaker 5: think will be about a fifty x increase by twenty
Speaker 5: twenty five.
Speaker 4: So I'm a little.
Speaker 5: Skeptical that hit those numbers, but that's that's the scale
Speaker 5: they're talking about now. That would still be a small
Speaker 5: fraction of the overall taxi industry, sure, And I think
Speaker 5: one of the things you'll see is that they haven't
Speaker 5: entirely figured out the weather situation, and also to some extent,
Speaker 5: they're like really dense infrastructure. So if this question of
Speaker 5: when will you be able to hail a vehicle in Manhattan,
Speaker 5: I could still see that being five to ten years away.
Speaker 5: But I would not be surprised if Los Angeles, Houston, Dallas, Miami,
Speaker 5: those kind of cities, you know, Southwestern kind of suburban cities.
Speaker 5: If three to five years from now, it's very common
Speaker 5: to see self diving taxis as just like a on
Speaker 5: power with the.
Speaker 4: Uber and left in terms of popularity.
Speaker 1: Similarly, we'll have you back in five years and we'll
Speaker 1: see if all of this born. I really appreciate you
Speaker 1: coming on the podcast.
Speaker 4: Sound good, thank you.
Speaker 1: I'm telling you, Tracy, it always comes back to Arizona
Speaker 1: for US Chips. Seriously, we're gonna chips, water, ELFLFA.
Speaker 3: And now driving.
Speaker 2: Okay, I'm serious.
Speaker 3: Intersect with I'm telling you they got to take a trip.
Speaker 3: I'm not being facetious.
Speaker 5: Okay.
Speaker 2: Well, I would happily go to Arizona. I think that'd
Speaker 2: be fun, but I don't know. I'm just going to
Speaker 2: go back to what I said earlier, which is like
Speaker 2: self driving cars at once feel far away and very
Speaker 2: close and sort of inevitable and also quite difficult, if
Speaker 2: that makes sense.
Speaker 1: You know what, if it was really fascinating and I
Speaker 1: hadn't really appreciated this, his point about one of the
Speaker 1: companies starting in Phoenix, where they're driving is super easy,
Speaker 1: and then you sort of like progressively get better to
Speaker 1: go to more complicated places, and then the other one
Speaker 1: starting or mainly operating in San Francisco, where the driving
Speaker 1: is really difficult, and it's like, if you can master
Speaker 1: San Francisco, you could probably master anyway.
Speaker 3: I wonder what the better approaches, like getting.
Speaker 1: Progressively you know, progressively better, or just like really taking
Speaker 1: all the hard stuff on day one.
Speaker 2: Well, you know what I don't get just thinking about
Speaker 2: that conversation. You know how all the captures to identify
Speaker 2: robots are like identify the motorcycles in this photo or
Speaker 2: identify the buses. That doesn't bode well for self driving cars.
Speaker 3: Why Why?
Speaker 2: Well, because it seems like robots struggle to identify motorcycles
Speaker 2: on the road and humans doe.
Speaker 1: I see what you're saying, right, Like, our whole approach
Speaker 1: to even identifying whether someone is it's.
Speaker 2: Always traffic lights or cars or motorcycles. So maybe maybe
Speaker 2: actually self driving cars are ultimately a threat to our
Speaker 2: existing captures.
Speaker 1: Wow, yeah, right, Like if we could solve self driving cars,
Speaker 1: that guarantees that we're going to have spam.
Speaker 3: And other internet attacks. Right, I hadn't really thought about that.
Speaker 2: Well, I mean, I think we didn't touch on it
Speaker 2: much there. But there are also obviously societal implications of this.
Speaker 2: We talked a little bit about the notion that well,
Speaker 2: maybe companies could just replace all the taxi or the
Speaker 2: Uber drivers, maybe even some mail delivery drivers get replaced.
Speaker 2: That seems to be an issue as well. And then
Speaker 2: the other thing, Actually, I want to look into this
Speaker 2: after this conversation, but I am really curious what the
Speaker 2: insurance is like on these things and who's provided.
Speaker 1: Yeah, who has to pay and how I do think
Speaker 1: there are a lot of big questions like that, or
Speaker 1: like who's ultimately responsible when when these malfunction? I think
Speaker 1: in San Francisco recently there was something where a bunch
Speaker 1: of them all shut down at the same time and
Speaker 1: they create all these traffic problems, which is also not
Speaker 1: something that comes up with human drivers. I also think
Speaker 1: like the political debates are going to get like super weird,
Speaker 1: like what if they say, well, you know, to mention
Speaker 1: congestion taxes. What if they say, oh, like you can't
Speaker 1: even do that route because the computer is determined that
Speaker 1: would like use too much energy?
Speaker 3: Could it end?
Speaker 1: The interesting could like you know, it's interesting like the
Speaker 1: Red States, as you mentioned, have been a bit more
Speaker 1: liberal about allowing them. But then there's all in twenty years,
Speaker 1: will you be allowed to be a human driver, were
Speaker 1: allowed to be like gohot sight seeing? Like all these
Speaker 1: things like kind of some like big interesting questions that
Speaker 1: could reshape society and then the reshaping like sort of
Speaker 1: of our physical space maybe less need for parking. If
Speaker 1: these actually take off, I think like it will change
Speaker 1: the world in ways we don't really anticipate.
Speaker 2: Yeah, maybe we need to do a self driving cars
Speaker 2: episode from the perspective of a city planner or that's
Speaker 2: a good idea yea interesting? Yeah, all right, well shall
Speaker 2: we leave it there for now?
Speaker 3: Leave it there?
Speaker 2: Okay, And this has been another episode of the All
Speaker 2: Thoughts podcast. I'm Tracy Alloway. You can follow me at
Speaker 2: Tracy Alloway and I'm Jill Wisenthal.
Speaker 1: You can follow me at the Stalwart. Follow our guest
Speaker 1: Tim Lee, He's at Binary Bits, Follow our producers Kerman
Speaker 1: Rodriguez at Carmen Arman and dash Ol Bennett at dashbot.
Speaker 1: And check out all of the Bloomberg podcasts under the
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