Putting Autonomous Driving Back on the Road

Founders, executives, and analysts agree that self-driving car companies are in for a bumpy ride.

The self-driving car was a dream deferred even before the Covid-19 outbreak brought the U.S. economy to a standstill. By early 2020, plans to launch robotaxi services had been pushed back or scaled down as excitement over driverless cars gave way to recognition of the long work and heavy expense of bringing the technology to market. Now the pandemic has forced companies to pull their cars from the road, send engineers to work from home, and look carefully at their balance sheets. 

While some companies are taking the opportunity to demonstrate the promise of autonomous vehicles for contact-free delivery, these efforts serve mostly to show how far the industry remains from large-scale, truly driverless deployments.  

Hyperdrive spoke with a handful of industry consultants and executives about what’s ahead.  There is general consensus that autonomous vehicle developers are in for a bumpy ride, and that consolidation is inevitable. But there is also widespread confidence that the project of building self-driving cars is more urgent than ever. 

“Covid-19 is driving home for so many the promise of fully autonomous vehicles not only to make our roads safer, but also to help riders stay healthy during uncertain times,” said Dmitri Dolgov, chief technology officer of Waymo, formerly known as Google’s self-driving car project, via email. 

Below are the key takeaways from those conversations. Interviews have been edited for length and clarity.

Roundtable participants:

Grayson Brulte, co-founder, Brulte & Co., a consulting firm focused on autonomous vehicles and the future of transportation. 

Oliver Cameron, co-founder and CEO, Voyage Auto. The company contracts with retirement communities to provide self-driving ride-hailing services. Its  main client is The Villages, a community of more than 115,000 in Central Florida.

Ryan Chin, co-founder and CEO, Optimus Ride. The Boston-based startup, founded in 2015, builds self-driving shuttles for private residential and commercial developments. Its clients include the Brooklyn Navy Yard, an office park in Reston, Va., and a retirement community in Paradise Valley, Calif.

Brian Collie, managing director and senior partner at Boston Consulting Group, where he leads the automotive and mobility practice.

Dmitri Dolgov, chief technology officer, Waymo. Waymo is widely acknowledged as the leading self-driving car developer. It recently raised $2.25 billion, including money from its first outside investors, to continue its work on self-driving taxis, delivery vehicles, and long-haul trucks. 

Ro Gupta, co-founder and CEO, Carmera, a New York based maker of high-definition maps, based on data gathered from vehicle-mounted cameras. Almost all of the company’s partners —including delivery  companies and other fleets—have continued to operate during the pandemic, in some cases racking up more miles than before. 

Anuja Sonalker, founder and CEO, STEER. The Maryland-based startup founded in 2016, sells kits that enable cars to navigate parking lots without a driver. The company works with 33 sites in Maryland, including malls, grocery stores, and pharmacies, to provide a robot valet. It has also begun selling $1,200 kits for use in garages and driveways.

Chris Urmson, co-founder and CEO, Aurora Innovation. Aurora, a Palo Alto, Calif.-based startup founded in 2017, is working to build a “driver” that can operate ride-hailing fleets, personal cars, delivery vehicles, or long-haul trucks. Urmson, part of the engineering team that won the DARPA Urban Challenge in 2007, founded Aurora after leaving Google’s self-driving car project, where he was lead engineer.

Simulation keeps the work going:

Most autonomous vehicle developers use simulation engines to create driving scenarios and test their software. These virtual tools have allowed engineering teams to continue to work productively, without fleets on the road. Aurora, Optimus Ride, and Voyage have all paused their on-road testing. Waymo continues to operate a small number of fully driverless ride-hailing minivans in suburban Phoenix, as well as its delivery and trucking operations, but has paused all rides with safety drivers. 

Dmitri Dolgov (via email): “We’re seeing the increased importance and benefits of our multiyear investment in large-scale simulation, productivity tools, and advanced frameworks for training and evaluating machine learning models, and we’re doubling down our efforts in these areas.”

Ryan Chin:  “You can do a lot of work on simulation. You can go back and work on things that you wanted to work on but didn’t have time for, and you can still make lots of advancements. … It’s not like we’re gonna run out of things to do in a week.”

Oliver Cameron: “Our cars are not running in the world. They are not collecting production miles. And that just puts more emphasis on simulation to be able to find what’s broken and fix it. But we can’t fool ourselves into thinking that simulation can take the place of real world miles. … There’s always going to be that step where you get [the software system] onto a real car and you run it through things you’ve never seen before because the world is dynamic.”

Chris Urmson: “We have a simulation tool that allows us to emulate the sensors we have on the vehicle to generate new data in interesting environments that might be hard to create in the real world. So we can do an awful lot of work with that. Is it useful for us to get real world data? Absolutely. That’s why we have a fleet. But part of the way we have operated from the very beginning has been, instead of trying to operate a massive fleet and hope to get the data you want, to be really thoughtful and targeted with the data collections.”

On consolidation:

There is broad consensus that the AV industry was already entering a period of consolidation. The huge opportunity brought out dozens of venture-backed companies over the past decade, but with time, it’s become apparent that it will take many years and billions of dollars to create a viable business. That realization has narrowed the field; the current economic shutdown is likely to accelerate this.

Ro Gupta: “Even before Covid-19, this industry was already doing a reset in terms of being more realistic with the timelines.”

Brian Collie:   “2022 was a commonly accepted number for commercialization. We’re now looking at being pushed out to 2025, 2026. So we were already seeing significant cash pressure for some of these small or more midsize players to weather from here until then. And the situation with Covid-19 will only exacerbate that.” 

Chin: “Anyone that’s trying to raise [money] right now, it’s going to be tougher for them.”

Cameron: “Consolidation, regardless of virus, was coming and has been for quite some time. Post-virus, yes, there will be an accelerated number of companies that die, whether in AV or not. Let’s be honest: It’s going to impact everything.”

Anuja Sonalker: “Those who don’t have enough runway or did not prove their value proposition before this came, they will have a hard time. It will take every single ounce of their strength to survive this.”

Urmson:  “We have been saying since very early on that we saw consolidation coming. … We’re positioned with enough runway to get through the other side of this and be a beacon for some of these great people whose companies didn’t happen to work out.”

A shock to the auto industry:

Most in the group believe more established automakers could reconsider investments in autonomous driving during the current crisis; that could potentially slow down progress on those projects.

Collie: “When you’re looking at, globally, automotive sales being down in order of 20 to 40% … when you have dozens of plants and tens of thousands of employees and near-term production requirements, you might now look at AV as being much more of a luxury that you can no longer afford.” 

Cameron: “Some of the big guys may not weather this. It may seem like they can, but think about the politics within a big company and the politics of where you spend your time when the whole world is falling apart. I imagine there’s a lot of belt-tightening going on.”   

Urmson: “If you are a General Motors or a Ford or a Volkswagen or any of these big companies, you are going through a very difficult process of prioritizing what you spend money on and what is discretionary. That focus is going to be on how do they get people back to work and how do they meet the demand of the public.”

Brulte: “Can these [auto] companies sustain funding for these operations? Or will they get pressure from the labor unions to stop funding this? You’re closing a factory, yet you’re funding your self-driving car project? That’s going open up some really interesting political divides.”

Collie: “If you’re a tech startup or new mobility player that has moved into this space, this is your full business … while others are distracted, this is getting your sole focus. And we think there’s gonna be a tremendous opportunity for the biggest independent new mobility players to widen the gap.”

The fate of the sharing economy:

The coronavirus has made sharing closed spaces with strangers a fearful experience. It’s unclear how long it will take consumers to get over that fear.

Brulte:  “You will see a dramatic shift in society as it relates to shared mobility, and it will go back to private mobility of individuals riding in a vehicle without another person. Covid-19 will accelerate that shift.”

Urmson: “Even when we get the all-clear, which probably takes quite some time, there’s going to be a residual concern about getting close to other people that you don’t know. It will affect the psyche for a while. And at the same time, when you think about how do we actually move people through big cities, the only good way to do that is through shared mobility. In the long term, I think that automated vehicles have an important role to play in that, whether it’s as private taxi-like vehicles or whether it’s part of a public transportation network.”

Collie: |“Even though right now we are caught up in this unprecedented crisis and all of us are talking about how we’re going to think differently about getting on a train, about getting on a bus, about sharing a car, I don’t think it will take long once this is done for those attitudes to start to change back to where they were before.”

Gupta: “For behaviors changing in a lasting way, I just think no one can ever predict those . … One example I think about is 9/11. There were lots of people that swore they would never get on a plane again.”

Collie:  “When people talk about how people are gonna be less inclined to sharing, they’re doing so with the frame of reference of what a pooled vehicle looks like today, where you’re getting into a repurposed privately owned vehicle and you’re squeezing into a back seat with two other people. Vehicles are going to have a very different form from how they look today.”

Chin:  “How do you design vehicles that have that capability to self-sanitize? I think that’s less of a technical problem than Level Four or Five autonomy, but it is something that we’ll have to incorporate.”

As featured in Bloomberg on April 21, 2020

Developing an Autonomous Future

Gopal Rajegowda, Senior Vice President at Related and a Managing Partner of Related Urban-Southeast joins Grayson Brulte on The Road To Autonomy Podcast to discuss how Related is developing for an autonomous future.

In this episode, Grayson and Gopal discuss reimagining City Place in West Palm Beach, FL into Rosemary Square and the future of retail experiences. Gopal touches on the work Related did with Gehl to reimage public spaces, optimize green spaces, walkability all the while ensuring that the environment is welcoming and approachable for all ages.

Continuing the conversation, Grayson and Gopal discuss the rumor that City Place was one of Rick Caruso’s inspirations for The Grove in Los Angeles, CA. Following up on this, they dive into the trend of walkable mix-use developments that incorporate great retail brands, culinary experiences, and hotels into developments.

Building on their discussion around culinary experiences, they take a step into the past as Gopal tells a story about negotiating with Chef Thomas Keller to open Per Se at The Shops at Columbus Circle.

Stepping into the future, Grayson leads the conversation towards turning culinary experiences upside down by bundling a mobility service with a fine-dining experience and why that could happen in Florida at a Related development.

Enhancing the customer experience by bundling a mobility service with fine-dining is extreme hospitality. Benefiting both the owners and customers. Highlighting the experience at Grant Achatz’s Alinea in Chicago, Grayson ponders what the experience would be like if Chef Achatz could curate the experience in an autonomous vehicle before a guest even steps foot in the restaurant.

Closing out the conversation, Gopal discusses the common notion that you never have a second chance to make a first impression and how art has transformative powers in communities.

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The Business of Self-Driving Cars

Russ Mitchell who covers the rapidly changing global auto industry, with special emphasis on California, including Tesla, electric vehicles and driverless cars at The Los Angeles Times joins Grayson Brulte on The Road To Autonomy Podcast to discuss the business of self-driving cars.

In this episode, Grayson and Russ discuss the business of self-driving cars, Tesla’s bulls vs bears and Waymo’s recently announced $2.25 billion investment round from outside investors. As the funding conversation evolves, they touch on the possibility of Alphabet breaking out Waymo revenue and spinning out Waymo as a new publicly-traded company.

Concluding their conversation, Grayson and Russ discuss the self-driving car industry at-large being based in California and the reluctance of officials in California to embrace the business side of self-driving cars. They also touch on the TSLAQ debate and the industry’s pivot to trucking and how self-driving trucks will transform the shipment of goods.

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Henry Morrison Flagler and The Future of Mobility in Florida

Christopher Emmanuel, Director of Infrastructure & Governance Policy and Director of Autonomous Florida, Florida Chamber of Commerce joins Grayson Brulte on The Road To Autonomy Podcast following an afternoon spent at the Henry Morrison Flagler Museum in Palm Beach, FL. 

On the inaugural episode of The Road To Autonomy, Grayson speaks with Chris about the innovations Henry Morrison Flagler developed with The Florida East Coast Railway/Florida East Coast Hotel Companies and the impact that Flagler’s legacy has had on Florida. 

Building on Flagler’s Florida legacy (which was mainly focused on hospitality and tourism) the conversation evolves into what many consider the modern-day Florida East Coast Railway Company – Brightline (Virgin Trains). Concluding their conversation, Grayson and Christopher discuss Disney and the value of the Disney brand as it directly relates to the future of mobility in Florida.

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A New Definition of Meals on Wheels

Autonomous vehicles can open new branding and eating occasions for food marketers.

CHICAGO — Connected food consumers are increasingly being prepped for the possibilities of autonomous vehicles (AVs).

In a September 2019 survey of U.S. drivers who also own a smartphone, Adobe Analytics found that 10% are using current in-vehicle technology—namely, their car’s voice assistant—for food delivery or takeout purposes. And 40% of smartphone-owning consumers would like to be able to purchase a self-driving car. When asked which activity they are most excited to do in an AV, the most popular choice was eating or drinking. It outpaced doing work, reading or sleeping.

While AVs seem a futuristic concept, several pilot programs are currently underway that are slowly inching the transportation technology forward. Alphabet’s Waymo launched a self-driving taxi fleet in Phoenix and has racked up more than 10 million miles of real-world driving over the past decade, plus 10 billion miles in simulation testing. Uber has made “tens of thousands” of trips with its fleet of 250 AVs. And Tesla was poised to debut full self-driving capabilities by the end of 2019.

Meanwhile, major automakers such as General Motors, Ford and Toyota are dedicating billions of dollars to developing autonomous vehicle technology.

Grayson Brulte, an innovation strategist and co-founder of AV consultancy Brulte & Co. LLC, Miami, is bullish on the technology’s potential. For foodservice brands, it will be a massive opportunity to cement customer loyalty and expand the purchase occasion. The challenge, however, will be to “own that space.”

“It’s the next living room,” Brulte says.

An Experiential Service

AV usage will be differentiated by the experience, Brulte says.

“Can I get certain dining [experiences] there?” he says. “Can I purchase a product that’s only available when I’m riding in that vehicle?”

AVs are expected to be priced at a premium because of their technology. Should the technology adopt a subscription model—in which a business owns a fleet of AVs and consumers pay a subscription fee to use the vehicles—it could pave the way for new loyalty programs. Brulte points to American Express’ membership rewards or airlines’ frequent-flier programs as models for such an approach.

“The vehicle subscription will be able to add a lot of really interesting exclusive things because there can be hyperlocal [elements] and the vehicle can take you there,” he says. “For instance, if you have a subscription for X amount of rides, or you have a certain class of subscription, perhaps you can get invited to a dinner with a famous chef as a perk each quarter.” This could also relieve operators of liability concerns when serving alcohol because the AV will control transportation to and from the dining location.

In this vein, a hotel—for example, in California’s Napa Valley—could offer guests an AV subscription with their stay and connect to local food and beverage experiences.

“[The AV] can safely take you to the wineries, you can have wine tastings, and it could have a little wine storage in there,” Brulte says.

Beyond being transported to a restaurant or other food destination, there’s also the opportunity to dine inside the AV. Imagine the items that consumers typically do not buy for the road because of the difficulty of eating them in the car—anything that requires a utensil and hand-eye coordination, such as spaghetti, an ice cream sundae or a steak. AVs can provide operators with a completely new dining occasion that extends way beyond grab-and-go.

“The biggest thing for convenience stores is it takes the focus off portability,” says Bob Derian, partner with The Business Accelerator Team, Colorado Springs, Colo., and a food industry veteran. “When you remove that from the equation, it opens up things you can eat with a fork and knife, such as fresh bowls. … It would really help get more food out the door.”

Perfecting that dining experience may be challenging, of course. A 2019 study by the University of Michigan’s Transportation Research Institute raised the real challenge of preventing motion sickness in AV passengers.

Act on Impulse

For food brands and retailers, having this captive audience also offers tremendous marketing potential.

Gary Goralnick, CEO of shopinride, Los Angeles, holds two patents on technology that enables in-ride purchases and advertising. The tech, which is set to go into pilot in 2020, will connect a passenger’s smartphone to the GPS directions in an AV. A brand can engage with the passenger through an ad in social media and make them an offer. If the consumer accepts the offer—such as special pricing on the purchase of a value meal in the next 30 minutes—the shopinride technology would communicate with the AV’s GPS to direct the vehicle to the brand’s nearest location.

Or if a passenger is engaged in an activity in the AV—watching Netflix, for example—a nearby food operator can receive their location and activity information, then advertise popcorn or a dispensed beverage for immediate purchase and pickup.

Goralnick owns commercial real estate and appreciates brick-and-mortar’s challenge in connecting with the disruptive power of AVs. He says operators should consider AVs as a “movable computer” that can extend the impulse-purchase occasion.

“When you’re in a self-driving car, you can get it as soon as possible,” he says. “It will tell you where a product is, and the car can take you. … It can enhance brick-and-mortar, really.”

Brulte sees AVs becoming a “content hub.” “When consumers have the ability to relax, they’re going to enjoy content in the vehicle,” he says, dismissing surveys that suggest consumers would work in AVs to be more productive. Brulte envisions screens embedded in the AV’s windows, on which passengers can interact with content and shop. “Augmented reality will become very big in vehicles,” he says.

Future Vision

For brick-and-mortar operators, the question then becomes infrastructure: Do they have a dedicated autonomous pickup lane or non-consumer-facing access for AVs?

Brulte lives in one of the test markets for Whole Foods Market’s Amazon Prime Now fast delivery service. Prime Now delivery shoppers are competing with regular shoppers for aisle space and time in the checkout, he says: “It’s a mess.” Having a dedicated interface for deliveries and AVs would relieve those issues.

Of course, fully autonomous vehicles—or Level 5 autonomy, as defined by the Society of Automotive Engineers—have several hurdles to jump before becoming reality.

Most experts believe fully autonomous vehicles are decades away from becoming a reality. Brulte, who believes the United States is at least 25 years away from AVs having a significant presence in major metropolitan areas or suburban commuting corridors, points to the need to improve autonomous technology, establish federal safety regulations and win public acceptance.

Regardless, he argues that consumers must be the ones ultimately driving the development and design of AVs and their usage.

“The industry has to move to a way of allowing consumers to experience the vehicle, experience what the vehicle’s going to do,” Brulte says. “I don’t believe that you can … put the vehicle down in the city and everybody’s going to flock to it. There’s going to be a lot of questions asked and the industry has to come together to educate the public. Why do I want to do this?”

As featured in CSP Magazine on January 23, 2020.