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Axios What's Next

Cruise and Waymo are plowing ahead with plans to bring robotaxis to more cities, despite growing disillusionment among investors and automakers about the timeline for self-driving cars.

Why it matters: The two companies already operate driverless taxis in San Francisco and Phoenix. 

If they can exploit that early lead by quickly scaling ride services across multiple cities, they have a chance to prove the economics of self-driving technology are viable and that it's not just an expensive science experiment. 

Catch up quick: Other key players are shutting down, merging or paring back.

Ford and Volkswagen last month pulled the plug on their autonomous vehicle joint venture, Argo AI. 

AV delivery startup Nuro laid off 20% of its workforce, and two leading AV tech suppliers announced a merger.

Even Waymo's parent, Alphabet, is being pressured by an activist investor to reduce losses at its self-driving unit.

What they're saying: "Profitable, fully autonomous vehicles at scale are a long way off," says Ford CEO Jim Farley.

What's happening: Far from retreating, Waymo and General Motors-backed Cruise are hitting the accelerator.

"We're going to continue to make sure we don't constrain the commercialization because we have the lead right now," GM CEO Mary Barra told investors last week. 

"Those who are writing that it's not going to work and that it's decades off haven't taken a ride in the vehicle — I mean, we're doing it right now."

What's next: After San Francisco, Cruise plans to expand robotaxi service to Phoenix and Austin, Texas, by the end of December.

Several more cities are planned for 2023, and Cruise CEO Kyle Vogt said the company aims to hit $1 billion in revenue by 2025.

Waymo is expanding too, announcing that Los Angeles will be its third market (after Phoenix and San Francisco).

Last Friday, California gave Waymo the go-ahead to transport passengers in San Francisco without anyone behind the wheel, although it still needs a separate permit to begin charging fares as it does in Arizona.

Waymo is also unveiling a dedicated robotaxi co-developed with Zeekr, an electric vehicle brand owned by China's Geely Automobile Holdings.  

Meanwhile, another AV company, Motional, is partnering with Uber and Lyft to add Hyundai robotaxis to their ride-hailing fleets in several cities starting next year.

The big picture: This could be the beginning of an industry-wide shakeout in which the leaders pull away from the pack, similar to what happened in the auto industry in the first half of the 20th century.

Back then, hundreds of automobile companies fell by the wayside, leaving only three: GM, Ford and Chrysler.

Or, it could simply be that — unlike some others — Waymo and Cruise haven't run out of money yet. 

One big advantage Cruise has is a $5 billion line of credit from GM Financial, the automaker's lending arm, to fund expansion.

Still, the pressure is on for both companies to prove they can make money on self-driving technology — and the only way to do that is by scaling up quickly. 

Cruise's Vogt is bullish, despite what others are saying. 

"If you look at the underlying facts, you have people actually using driverless cars in major cities for the first time, multiple announcements of expansion, increasing fleet size, increasing metrics," he said in an interview. 

The bottom line: Vogt believes "we are in the golden years of AV expansion."

"It's right in front of everyone," he tells Axios. "But I think it's one of those things that won't really be fully comprehended until a year or two from now — when AVs are practically commonplace and people are looking around and saying, 'Where did this come from?'" 

Cruise, Waymo push robotaxis amid doubts about self-driving tech

Robotaxis are making inroads, but will they have staying power?

Waymo plans to deploy robotaxis co-developed with Zeekr, an electric vehicle brand owned by China's Geely Automobile Holdings. Photo courtesy of Waymo

Autonomous vehicles

Transportation

Automation and AI

From the Valley to D.C., Big Tech players like Facebook, Google and Amazon are under more scrutiny than ever as new technology develops and privacy and antitrust concerns grow in lockstep with companies’ ambitions.

Technology

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

Denver-based Frontier Airlines is set to pay $222 million in refunds for canceled flights and a $2.2 million fine, the Department of Transportation said Monday.

Driving the news: DOT said Monday that six airlines were paying back $600 million for the cancellations with Frontier having the highest amount of refunds and the largest fine.

The announcement comes ahead of the busy holiday travel season.

DOT said the fines are part of its "ongoing work to ensure Americans receive the refunds they are owed from airlines."

Meanwhile, the other airlines are TAP Portugal, Air India, Aeromexico, El Al and Avianca.

Why it matters: While air travel has rebounded from lows because of the pandemic, widespread flight disruptions caused by airline staffing shortages and weather have upended schedules and left travelers stranded or scrambling.

Yes, but: DOT said since the pandemic it has "received a flood of complaints from air travelers about airlines’ failures to provide timely refunds after they had their flights canceled or significantly changed."

What they're saying: U.S. Transportation Secretary Pete Buttigieg said when flights are canceled passengers seeking refunds should be paid back promptly. 

"Whenever that doesn’t happen, we will act to hold airlines accountable on behalf of American travelers and get passengers their money back," Buttigieg said in a statement.

“A flight cancellation is frustrating enough, and you shouldn’t also have to haggle or wait months to get your refund,” he said.

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Frontier to pay $222 million in refunds for canceled flights

Denver-based Frontier Airlines also has to pay a $2.2 million fine, the Department of Transportation said Monday.

Airplanes at airport including a Frontier Airlines plane

Frontier Airlines is one of six airlines paying a total of $600 million in refunds for canceled flights. Photo: Justin Sullivan/Getty Images

Pete Buttigieg

The pilots working for two of the U.S.' largest airlines are calling on the companies to meet their demands as they continue negotiations for new contracts amid unprecedented demand for air travel and staffing shortages. 

Driving the news: Ahead of the holiday travel season, Delta Air Lines pilots are warning that they're willing to go on strike to achieve higher wages, better benefits and greater schedule flexibility. 

It's unclear if or how strikes would impact flights.

State of play: United Airlines pilots voted to reject an agreement with the company on Tuesday and said they would immediately kick off a series of informational picketing events.

"By the Company’s own admission, this agreement missed the mark," United Master Executive Council chair Capt. Mike Hamilton said in a statement. "That’s why both parties agreed to reengage at the bargaining table for a new, improved agreement."

Delta pilots voted Monday to go on strike if necessary to achieve their goal. Negotiations were last settled in 2016 and resumed in January after they were tabled for two years due to COVID-19.

"Delta has rebounded from the pandemic and is poised to be stronger than ever, posting record revenues for the third quarter," Capt. Jason Ambrosi, chair of the Delta Master Executive Council, said in a statement. 

"Meanwhile, our negotiations have dragged on for too long. Our goal is to reach an agreement, not to strike."

Worth noting: American Airlines pilots are also considering a tentative agreement with management, NBC News reports.

The big picture: All three airlines are expecting stronger profits this quarter than previous estimates, according to their latest earnings reports.

Delta pilots weigh strike amid contract negotiations as holidays near

Pilots are demanding higher wages, better benefits and greater schedule flexibility.

A Delta airplane is seen in Washington D.C. on Oct. 20. Photo: Jakub Porzycki/NurPhoto via Getty Images

Airlines

Virgin Australia is offering travelers the chance to turn the dreaded middle seat into a lottery ticket.

Driving the news: The airline announced the launch of the “Middle Seat Lottery” Monday to transform the “middle seats on the airline’s domestic flights from the least favourite to the most fun and wonderful.”

More than $230,000 worth of prizes will be given away through April 23 to travelers "who either select or who are assigned a middle seat" on Virgin Australia.

The big picture: Less than 1% of travelers chose the middle seat intentionally as their first seat preference, a Virgin Australia social media survey in May found.

The aisle seat was the preferred seat for 67% of the 7,500 respondents and the window got about 34% of the vote.

Why it matters: The new contest and Bring on Wonderful campaign follow Virgin Australia's 24-month transformation, which returns the airline to profitability. 

The airline filed and exited bankruptcy in 2020.

Yes, but: The contest is open to its Velocity members who are Australian residents and 18 or older,  according to the fine print.

They also need to fly in a middle seat on a Virgin Australia-operated domestic flight by April 23.

Flashback: Many airlines kept the middle seats empty in the early days of the coronavirus pandemic to reduce exposure.

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Airline launches lottery for travelers who take middle seat

Virgin Australia wants to turn the dreaded middle seat into the "most fun and wonderful."

A Virgin Australia Boeing 737-800 plane takes off at Sydney's Kingsford Smith International Airport in Australia in May 2021. Photo: David Gray/Getty Images

China is becoming the most formidable rival America has faced, and the risk of confrontation with Russia, North Korea or Iran still looms. Authoritarians are rising, the chaotic Afghanistan exit revealed the limits of U.S. power, and the pandemic, climate change and other critical challenges continue to pose grave threats.

World

Starbucks and Delta Air Lines have joined forces to make their rewards programs more rewarding.

Why it matters: Free coffee and miles. Delta SkyMiles and Starbucks Rewards members can get more value with added benefits by linking their loyalty accounts together, the companies said Wednesday.

Dangling more rewards can also help lure new loyalty members and build stronger allegiance for the brands.

The big picture: The PwC Customer Loyalty Survey 2022 found getting good value was the top reason people patronize a business for 53% of the 4,036 consumers surveyed. Thirty percent also said they liked the benefits, rewards and privileges of “a preferred company’s loyalty program.”

Meanwhile, companies have started working together to make their programs more attractive in the last year. 

Sephora purchases at Kohl’s earn members reward points at both retailers, similar to a Target-Ulta partnership for beauty purchases.

Dick's Sporting Goods and Nike also have teamed up with their loyalty programs for Nike purchases.

Delta also offers members the ability to earn miles outside of flights with American Express, Lyft, Airbnb and Ticketmaster.

Starbucks Rewards and Delta SkyMiles benefits

What's happening: U.S. customers who are enrolled in both Delta SkyMiles and Starbucks Rewards loyalty programs can link their accounts starting Oct. 12 by visiting deltastarbucks.com or starbucksdelta.com.

After the accounts are linked, members earn one mile per $1 spent on eligible purchases at Starbucks.

On days enrolled members have a scheduled Delta flight they will earn double Starbucks stars on eligible purchases at participating stores.

The benefits are open to new and existing members of both programs.

Between the lines: Members who link their accounts by Dec. 31, 2022 will earn 500 miles and 150 Stars after a qualifying purchase.

Flashback: During its investor day event in September, Starbucks announced Reward Together, a new program allowing its rewards members to link their accounts with other brands’ loyalty programs to earn more points and get new benefits.

What’s next: Delta is the program’s first U.S. partner but more loyalty partnerships are expected.

Starbucks is also launching the web3-enabled Starbucks Odyssey later this year but rewards members and employees can join a waitlist for a limited time.

Delta announced other changes to SkyMiles last week and for the first time since 2015 said it is increasing select status-earn qualifications for 2024 Medallion status beginning Jan. 1, 2023.

Gold Medallion status increases from $6,000 to $8,000.

Platinum from $9,000 to $12,000 and Diamond from $15,000 to $20,000.

What they're saying: "Diamond Medallion and Platinum Medallion Members who qualify for 2024 Medallion Status will be able to select from an expanded slate of premium Choice Benefits beginning February 1, 2023."

Diamond and Platinum SkyMiles Members will be able to select 4,000 Starbucks Stars as one of their annual Choice Benefits in 2024, Delta and Starbucks said Wednesday. 

Separately, Dunkin' launched its new loyalty program Dunkin' Rewards nationwide replacing its longtime program DD Perks.

Details: With the new program, members earn 10 points for every $1 spent compared to 5 points with DD Perks.

Through Oct. 31, members can earn freebies with select purchases, the company announced.

Yes, but: Members will need to collect more points to redeem a free drink reward, which will range from 400 points for tea to 900 points for frozen drinks or signature lattes up from 200 points with DD Perks.

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Starbucks, Delta launch loyalty partnership with free miles

Starbucks Rewards and Delta SkyMiles members can link their loyalty accounts for free miles and coffee.

Arm holding a Starbucks cup with a Delta airplane in background

Starbucks and Delta are offering loyalty members a way to link their accounts. Photo courtesy of Starbucks and Delta Air Lines

Deals

Retail

Russian-speaking hackers on Monday disrupted the websites of multiple U.S. airports through denial-of-service (DDoS) attacks, CNN reports.

Why it matters: No actual flight disruptions from the attacks were reported, but the downed websites were likely an inconvenience for people seeking flight information or booking services.

DDoS attacks work by overwhelming a targeted server, service or network with a flood of internet traffic and either force websites offline or make them very slow to respond to legitimate traffic.

The affected airports included Chicago O'Hare International Airport, Atlanta Hartsfield-Jackson International Airport and New York City's LaGuardia Airport, according to CNN and ABC.

What they're saying: Killnet, a pro-Russia hacker group, posted a list of major U.S. airport websites on its Telegram account on Monday morning, telling its 91,000 subscribers that "The list below is for you!"

"We invite everyone to commit DDOS on the civilian network infrastructure of the United States of America!" the group added, listing airports, hospitals and health care systems, weather monitoring centers and metro systems as targets.

The U.S. Cybersecurity and Infrastructure Security Agency and multiple airports did not immediately respond to Axios' requests for comment.

The big picture: Killnet took responsibility for knocking multiple state government websites offline around the U.S. last week, CNN reports.

Go deeper: State Department kicks off new cyber diplomacy endeavor

Russian-speaking hackers disrupt multiple U.S. airport websites

No actual flight disruptions from the attacks were reported.

People in Chicago's O'Hare International Airport in June 2022.

People in Chicago's O'Hare International Airport in June 2022. Photo: Kamil Krzaczynski/AFP via Getty Images

Airports

Pro Rata

Axios Pro Rata

MobileEye, an Israeli maker of computer vision products for driver assistance and self-driving, filed for an IPO on the Nasdaq.

Why it matters: This could be the year's largest IPO, topping Corebridge and TPG, with Renaissance Capital estimating up to $2.5 billion in proceeds.

Details: MobileEye first went public in 2014, before being acquired by Intel three years later for $15.3 billion. 

It reports a $75 million net loss on $1.39 billion of revenue for 2021, whereas it reported $108 million of net income on $358 million in revenue for its last full year in the public markets (2016).

What it does, per The Verge: "Mobileye is known for its EyeQ system-on-a-chip (SoC), which serves as the 'brain' for Mobileye’s driver-assist and self-driving technology. Mobileye also uses a data crowdsourcing program — called Road Experience Management (REM) — to build out a 3D map using real-time data from vehicles equipped with Mobileye’s technology."

Intel's MobileEye preps year's largest IPO

Intel bought the self-driving tech startup in 2017 for over $15 billion.

Illustration of Ben Franklin in a sports car.

Initial public offerings (IPO)

Porsche raised €8.2 billion in its IPO, pricing at the high end of its €76.50 to €82.50 per share range. Shares climbed in early trading on the Frankfurt Stock Exchange. 

Why it matters: This is the year's largest European IPO, and the second-largest ever in Germany (behind Deutsche Telekom in 1996). 

It also means that Porsche's market cap is approaching that of parent company Volkswagen, whose shares fell as some investors appear to have switched allegiances. 

Details: Volkswagen offered 911 million shares and the stock symbol is "P911," both homages to Porsche's iconic 911 model. Expectations are that VW will use proceeds for electrification efforts.

The bottom line: There are hopes that Porsche's debut could jumpstart both the moribund European IPO market and public investor interest in luxury carmakers (see chart below). But this is more likely to be an exception than the start of a new rule. 

Data: Yahoo Finance; Chart: Axios Visuals

Go deeper: Why big IPOs are still happening

Porsche races into year's largest European IPO

Porsche defies the market slump for luxury automakers.

 Photo by Thomas Niedermueller/Getty Images.

Automakers

The skies could soon be filled with electric, autonomous air taxis, but they'll need a place to take off, land and recharge — hence the arrival of the "vertiport."

Why it matters: These transportation hubs could become critical parts of urban or regional mobility ecosystems, linking fast and convenient air travel to other forms of transit, like airports, buses, trains and ride-hailing networks. 

Freight networks will need them too as they employ similar aircraft to ferry cargo between distribution centers.

Rural areas like Alaska, where 80% of communities are accessible only by air, will also need landing spots. 

Driving the news: The Federal Aviation Administration is releasing new design guidelines, shared first with Axios, to ensure these landing sites are safe, well-lit and well-marked, and that they can support the necessary charging infrastructure.

While the FAA has yet to certify these low-altitude aircraft for flight, the agency's vertiport design guidelines will help airport owners, operators and infrastructure developers begin development now so they're built when the aircraft are ready to launch.

Where it stands: Manufacturers of electric vertical takeoff and landing aircraft (eVTOLs) — giant passenger drones, if you will — are already laying out plans to begin operations, some as soon as 2024 with pilots on board. 

Boeing-backed Wisk last week released a roadmap outlining how it aims to integrate pilotless air taxis into the national airspace system by 2030.

Germany's Lilium plans to open its first vertiport near Orlando by 2025 for piloted flights.

Joby Aviation and Archer Aviation have each partnered with Reef, the country’s largest parking management company, to create landing sites atop existing parking garages. They're initially focusing on a handful of cities, including Miami and Los Angeles.

What they're saying: "Our country is stepping into a new era of aviation. These vertiport design standards provide the foundation needed to begin safely building infrastructure in this new era," said FAA associate administrator of airports Shannetta Griffin.

Details: The FAA guidelines provide key information about how vertiports should be developed, including standard dimensions, lighting and signage.

They should be 100 x 100 ft. — a little bigger than three tennis courts — with a 48 x 48 ft. landing pad in the middle, marked by a dedicated crosshairs symbol identifying it as a vertiport.

The guidelines also dictate the airspace required for approach and departure, stipulating that a vertiport must be 500-700 feet away from existing commercial runways. 

The FAA also spells out rooftop requirements for elevated vertiports. 

Flashback: New York Airways briefly offered helicopter service to the top of the Big Apple's Pan Am Building (now the MetLife Building) in the 1960s and '70s, but stopped after a fatal crash.

What to watch: It's not clear who should pay for eVTOL vertiports.

The funding issue is being heavily debated at the federal, state and local levels, reports Vertical Magazine, an industry publication.

Thousands of heliports already dot the U.S., but fewer than 1% are available for public use. Most are private or military sites. 

The bottom line: Once far-fetched dreams like flying cars are beginning to take off, thanks to technology advancements and huge capital investments.

Meet the "vertiport," where you'll go to hail an air taxi

We're starting to get a better idea of what "vertiports" — airports for flying taxis — will look like.

Rendering of a potential vertiport for Wisk's autonomous flying taxis. 

Wisk's concept of a potential "vertiport," or landing site for autonomous flying taxis. Image courtesy of Boeing

Aviation

Tesla is recalling more than 1 million cars in the U.S. over a faulty window automatic reversal system that may not properly detect obstruction.  

Driving the news: "If a window is closing and detects an obstruction, the condition may increase the risk of a pinching injury to the occupant," according to recall documents released Thursday. 

The faulty system does not comply with federal safety requirements, per the National Highway Traffic Safety Administration. 

1,096,762 Tesla vehicles may have the issue, per NHTSA.

The recall covers some Model 3s manufactured between 2017 and 2022, Model Ys made between 2020 and 2021 and certain Model S and Model X Tesla's from 2021 to 2022.

State of play: Owners of the vehicles included in the recall are expected to be notified beginning Nov. 15.

Tesla said it would perform an over-the-air software update to fix the system.

The company said it was not aware of any crashes, injuries or deaths related to the condition, per the filing.

Go deeper... Teslas made up nearly 70% of assisted-driving crashes in last year

Editor's note: This article has been updated with information on Tesla's software update.

Tesla recalls nearly 1.1 million vehicles over faulty automatic windows

Owners of the vehicles included in the recall are expected to be notified beginning Nov. 15.

A general view of a Tesla car charging station on September 15, 2022 in Garden City.

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