Baby You Can Drive My Car

Blink and you missed them, but the last 24 hours have brought some important news in the field of autonomous vehicles. Here’s what we’re talking about:

#1. Google’s Waymo app recently started showing theoretical prices for rides in its Phoenix trial. That was the most interesting part of a Bloomberg article on the service out today, and an 11-mile trip would go for $19.15. That is roughly equivalent to an Uber ride of similar length in this market.

Also in the article:

• Waymo has started trials of totally autonomous (no driver at all) trips in the Phoenix market.

• Data as of 2017 shows Waymo far ahead of all the competition in miles driven before a safety driver must take over. The data is from California DMV filings, so we presume it is roughly apples to apples rather than skewed by geography.

Full story here (worth a read): https://www.bloomberg.com/news/features/2018-07-31/inside-the-life-of-waymo-s-driverless-test-family

#2. Also new today: Waymo is collaborating with Phoenix’s Valley Metro mass transit system to integrate their autonomous vehicles into a comprehensive transportation solution. The pilot will start with employees of the system, taking them on short trips to and from mass transit stops. The idea here is to eventually maximize bus usage along popular routes, funnel people who don’t live near a bus stop to a convenient mass transit access point, and generally use autonomous vehicles to optimize the entire network.

This news excites us. Autonomous vehicles will be expensive for at least the next 5-7 years by our reckoning. Putting them in harness to supporting mass transit is a much more useful innovation than merely deploying the technology in high-end cars and waiting for economies of scale to bring prices down.

Well done, Waymo. This is how technological disruption is supposed to work.

More details here: https://www.wired.com/story/waymo-phoenix-partnership/

#3. Finally, yesterday Uber announced it was shutting down its autonomous over-the-road truck effort to focus on passenger cars. This makes a ton of sense. Uber’s primary use case is in cars, not 18-wheelers. And its recent troubles in self-driving cars means it needs to devote 100% of its efforts to getting that program back on track.

At the same time, it also reminds us just how difficult the engineering challenge of autonomous vehicle development really is. Uber, for all its recent troubles, does still have deep pockets and powerful VC partners.

Uber’s trouble in trucks is also a useful case study in the problems of automating seemingly “simple” human tasks. For all the attention on AI/machine learning replacing millions of jobs, that is something to remember.

Read more here: https://techcrunch.com/2018/07/30/ubers-self-driving-trucks-division-is-dead-long-live-uber-self-driving-cars/

Why all this matters: While we remain skeptical that autonomous driving will be widely available in the next 5 years, it is certainly a profoundly transformative technology. It is already impacting the stock prices of automakers. But just as it took equity markets a decade to understand the full scale of “Amazoning”, the eventual impact of self-driving cars will be very large and (at least for the next few years) very hard to predict.