The Economic Club of Florida

A Conversation about Self-Driving Cars and the Future Economic Impact of Autonomy.

On July 29, 2019 the Economic Club of Florida hosted “A Conversation About Self-Driving Cars and the Future Economic Impact of Autonomy.” The featured presenter was Grayson Brulte, co-founder and president of Brulte & Company, which has significant involvement in autonomous vehicle technologies.

Listen to the full conversation on WFSU Radio.

As featured WFSU Radio on July 29, 2019.

How Lenders Stand to Benefit From Uber’s Platform

Despite profitability concerns outlined in Uber Technologies’ S-1 filing, lenders could benefit from partnering with the mobility company, Grayson Brulte, president of Brulte & Company, told Auto Finance News. For instance, lenders might allow Uber drivers to rent their off-lease inventory.

“Uber is not a ride-sharing company or an autonomous vehicle company or a food delivery company,” Brulte said. “Uber is a platform. And if you’re investing in Uber, you’re betting on the platform.”

Lenders can benefit from Uber’s growing platform by leveraging the assets on their balance sheet to create returns outside of remarketing at auction. “The strength of an auto lender is the balance sheet, not its platform,” Brulte said.

“The best way to create that return is to strike deals with platforms where you can put your vehicles that are off-lease to use so those vehicles are generating revenue.”

Uber filed its initial public offering prospectus with the Securities Exchange Commission last week, less than a month after the stock of rival Lyft began trading on the N.Y. Stock Exchange. Uber’s IPO is expected to assign a $100 billion valuation to the mobility platform. Comparatively, Lyft was valued at $24 billion in its March 29 IPO. Lyft shares have been trading around $56 each, down 22% from their opening day price.

As featured in Auto Finance News on April 25, 2019.

Amazon Investment in Electric OEM Paves Way for ‘Limitless’ Mobility Potential, Analyst Says

Amazon’s $700 million investment in electric OEM Rivian is a potential step by the retail giant to launch a mobility service that would supplement its delivery platform, said Grayson Brulte, a consultant with Brulte & Co.

“I think it’s limitless where Amazon takes it,” Brulte told Auto Finance News. “There’s a lot of money to be made in niches. Do they bundle a mobility service with [Amazon] Prime? So now they’re moving individuals and goods at the same time, and the cost of delivery rapidly plummets. And the rides for the individual go down, as well, because it’s subsidizing the ride.”

It remains unclear as to how Rivian — which declined to comment — plans to finance its new fleet of vehicles to would-be consumers. Brulte noted that Amazon’s vast reach in the global market puts the company in a good position to fill that need. “Amazon can borrow money very cheaply. [The company] has an incredible ability to underwrite, if they so choose, or to partner with a bank — a Goldman Sachs or Bank of America — to underwrite at a very low percentage,” he said.

Besides, Amazon is already making loans to small businesses. “It’s not out of their wheelhouse,” Brulte said. “If you look at Amazon’s small business program, some of those loans are $35,000, $40,000, $50,000. That’s a comparable rate to a vehicle, similar metrics.”

A question mark in the equation is whether Amazon would launch a mobility service or an autonomous mobility service, given that it invested in self-driving technology platform Aurora earlier this month. “You’re looking at a $250,000 to $400,000 underwriting,” he said. “Amazon has the balance sheet and the cash flow, which provides the company with the ability to borrow [money] to underwrite that.”

As featured in Auto Finance News on March 6, 2019.

Retailers are Testing Autonomous Vehicles

The race is on for retailers to incorporate self-driving vehicles into their last-mile strategies, but the technology is still far from mainstream consumer adoption. For now, major brands are starting to roll out some trial programs.

This week, Amazon launched a pilot in Washington where some orders will be delivered through an autonomous vehicle called Scout. Scout, which will initially be accompanied by a human employee, was developed in-house; other retailers are partnering with tech companies. Kroger is working with Nuro on a pilot in Scottsdale, Arizona; Walmart is deploying two autonomous vehicle trials (with Ford and uDelv, after a previous experiment with Waymo) to pilot the home-delivery use case. Walmart saidit wants to get a better sense of how customers interact with them and use that data to inform what comes next.

Retailers are still trying to figure out how autonomous vehicles can enhance customer experiences, how they can improve supply-chain efficiency and how they can be deployed at scale.

Industry observers say the use cases still haven’t been fully fleshed out.

“The business models are still being developed and worked on,” said Grayson Brulte, an innovation consultant who focuses on emerging technologies, including autonomous vehicles. “From a retailing standpoint, I’m not sold on autonomous delivery as the holy grail for retail; if you look at retail trends starting to evolve, it’s becoming more experience-based.”

It’s a concept where the autonomous vehicle essentially becomes a marketing tool for brands that want to sell products to passengers. The mobile self-driving car offers possibilities for design innovations, product placements and in-store assistants.  

According to CB Insights, 46 companies are currently working on deploying some form of autonomous vehicle technology. But Brulte said two big hurdles are impeding widespread use: the lack of regulatory clarity (especially important during accidents) and customers who aren’t yet accustomed to them.

“Right now, the regulatory environment around autonomous vehicles is uncertain — there’s no framework nationally, and the other hurdle is public acceptance,” he said.

For now, autonomous vehicle trials are marketing exercises to get consumers excited about the technology’s capabilities in an effort to drum up interest, said customer data platform IgnitionOne chief operating officer Chris Hansen.

“A lot of these [retailers] are trying to follow Amazon and rightfully so,” he said. “It’s the high end of the hype cycle — it’s cool to see where things are going in 15 or 20 years. Just because you have an AI-powered machine that is transporting a package doesn’t mean it doesn’t create liability for people on the street.”

It’s also not clear whether autonomous delivery will be cost-effective for all retailers deploying the technology.

“It’s not something all brands are going to be able to do on a cost-effective and productive way,” said Eric Silver, a partner at tech investment firm Alt-Capital. “It remains to be seen whether a company that acts the way Amazon does is going to have monopoly power.”

As featured in DIGIDAY on January 25, 2019.

Preparing Florida’s Infrastructure for Smart Growth and Development

Florida is already the third largest state in America and we’re growing by over 1,000 new residents every day. We have 21 million residents and we’ll grow by 5 million more by 2030.

By then, we’ll have 3 million more drivers on our roads, 50 million more visitors and we’ll need 20 percent more water.

The good news is that Florida’s business leaders have a plan and it’s getting traction. This is good for Florida, good for job creation and it’s a great way to Secure Florida’s Future.

While we’re growing, Florida is also becoming more diverse. Aging Baby Boomers will continue to swell Florida’s elder population and at the same time, the Millennial and GenX generations are growing as a share of Florida’s total population.

As Florida’s population changes, it is important that our infrastructure systems respond to their changing needs. Creating long-term investments in Florida’s transportation, energy, water, telecommunications and agriculture infrastructure is essential.

Our infrastructure needs to support growing demand as well as a wide range of options — from sustainable water solutions to autonomous transportation systems.

The Florida Chamber Foundation’s ‘Florida 2030’ research outlines where Florida needs to be by 2030 to remain globally competitive.

To secure Florida’s future, we must consider the water and energy needs for nearly 5 million more residents, be ready for the hard and soft infrastructure needs like broader telecommunications, improved roadways and railways, air, space and seaports, ensure Floridians can connect to job opportunities, education, health care options, each other and the world, as well as support continued economic growth while preserving Florida’s essential environment and community assets.

So, how do we make sure Florida is prepared for smarter growth?

The Florida Chamber’s Infrastructure Coalition, chaired by former Florida Department of Transportation Secretary Ananth Prasad, is focused on creating long-term investments in Florida’s energy, water, transportation, telecommunications and agriculture infrastructure.

With Washington, D.C.’s likely focus on infrastructure, the Florida Chamber’s Infrastructure Coalition aims to maximize Florida’s economic growth opportunities. And, here at the state level, double down on efforts to prepare for Florida’s growing population through infrastructure investments.

As part of the Florida Chamber’s continuing efforts, we are working closely with state leaders like Senate President Bill Galvano to enact smarter growth policies that meet Florida’s long-term needs and will, this week, present recommendations the Florida Chamber’s Infrastructure Coalition has prepared for Florida’s elected officials to consider.

The Florida Chamber understands the importance of innovation and technology play in Florida’s future- specifically as they relate to Florida’s infrastructure future. Florida 2030 research estimates that by 2030, more than 25 percent of all miles driven (including freight) could be by autonomous vehicles. With guidance and leadership from state leaders like Sen. Jeff Brandes, Syd Kitson of Babcock Ranch and Grayson Brulte of Brulte & Company, the Florida Chamber created Autonomous Florida, a statewide initiative that works to ensure Florida continues leading the way in autonomous transportation. Our vision? To make Florida the autonomous capital of “all things autonomous” in North America.

I believe Florida will continue to grow and we can remain competitive if we plan better for the next 5 million residents than we did for the last 5 million.

This week, leaders from around Florida and the nation will gather at American’s first solar-powered town, Babcock Ranch for the Florida Chamber Foundation’s 2018 Growth & Infrastructure Summit, to discuss the future of Florida’s transportation and infrastructure systems, as well as outline the strategies needed to grow smarter.

Governor-elect Ron DeSantis, Senate President Galvano and House Speaker Jose Oliva have all signaled an interest in keeping innovation and infrastructure at the core of Florida’s economic development future.

This is great news as we fight to Secure Florida’s Future.

As featured in Florida Politics on December 11, 2018.