Elon Musk: "There will not be a steering wheel" in 20 years - Axios
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Elon Musk: "There will not be a steering wheel" in 20 years

Elon Musk in 2015 (AP's Ringo H.W. Chiu)

Elon Musk predicted that within 10 years nearly all new cars made in the U.S. will be autonomous, and half of those will be fully electric vehicles. "China is probably going to be ahead of that," the Tesla and SpaceX chief said Saturday, speaking at the National Governors Association meeting in Providence, Rhode Island.

Within 20 years, he said driving a car will be like having a horse (i.e. rare and totally optional). "There will not be a steering wheel."

Musk also used the appearance to encourage the governors to be careful about what regulations they make and which things they incentivize.

Why it matters: All of Musk's businesses — SpaceX, Tesla and his new Boring Co. tunnel business — depend on new approaches to regulation.

In a discussion with Nevada Gov. Brian Sandoval, Musk also touched on several other topics:

On energy:

Musk noted that it would only take about 100 square miles of solar panels to power the entire United States and the batteries needed to store the energy would only need to take about a square mile. That said, he imagines the energy shifting to a large dose of rooftop solar, some power plant solar, along with wind, hydro and nuclear power.

"It's inevitable," Musk said, speaking of shifting to sustainable energy. "But it matters if it happens sooner or later."

As for those pushing some other type of fusion, Musk notes that the sun is a giant fusion reactor in the sky. "It's really reliable," he said. "It comes up every day. if it doesn't we've got [other] problems."

On artificial intelligence:

Musk said it represents a real existential threat to humanity and a rare example of where regulation needs to be proactive, saying that if it is reactive it could come too late.

"In my opinion it is the biggest risk that we face as a civilization," he said.

No matter what, he said, "there will certainly be a lot of job disruption."

Robots will be able to do everything better than us, I mean all of us. I'm not sure exactly what to do about this. This is really like the scariest problem.

On regulation:

"It sure is important to get the rules right," Musk said. "Regulations are immortal. They never die unless somebody actually goes and kills them. A lot of times regulations can be put in place for all the right reasons but nobody goes back and kills them because they no longer make sense."

Musk also focused on the importance of incentives, saying whatever societies incentivize tends to be what happens. "It's economics 101," he said.

On what drives him:

"I want to be able to think about the future and feel good about that, to dream what we can to have the future be as good as possible. To be inspired by what is likely to happen and to look forward to the next day. How do we make sure things are great? That's the underlying principle behind Tesla and SpaceX."

On Tesla's stock price:

Musk said he has been on record several times as saying its stock price "is higher than we have any right to deserve" especially based on current and past performance. "The stock price obviously reflects a lot of optimism on where we will be in the future," he said. "Those expectations sometimes get out of control. I hate disappointing people, I am trying really hard to meet those expectations."

Musk also talked about Trump when answering a question from Axios at the event. More on that here.

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Survey: Only half of Americans think they know when online shopping is safe

Bonobos guide Reynaldo Sanchez inputs clothing information into the store's customer website. Photo: Bebeto Matthews / AP

Only half of consumers report they think they can tell which web sites are safe for online shopping and 35% of Americans claim they have stopped an online purchase out of security fears, according to the Global Cybersecurity Alliance (GCA) and Zogby Analytics survey.

Why it matters: Cyber Monday is next week. More fake web sites are launched during the holiday shopping season than at any other point during the year.

Shoppers beware:

  • The brands that are likely to have the most phishing attempts this year are Amazon, Walmart, and Target, according to the Anti-Phishing Working Group.
  • Clicking on false links from emails or typing in web site urls with slight misspellings, such as Walmaart instead of Walmart, can expose consumers to ransomware or to unintentionally releasing their financial or personal information.

The state of online shopping:

  • 77% of Americans reported they had mistyped an address in their browser and ended up at a different site than they intended, according to the survey.
  • 68% have clicked on a link in an email that has taken them somewhere else than they expected.
  • Only 13% reported changing DNS settings on their computer and 11% on their wireless router.
Tips, according to Gang Wang, assistant professor in the Department of Computer Science at Virginia Tech:
  • Avoid clicking on links that have been emailed to you to avoid phishing or spoofing scams.
  • Browsing on sites with https, not http, is safer, since criminals can monitor network traffic on http sites and lift credit card information, for example.
  • Shopping on mobile devices could be riskier than shopping on a computer, since url bars are smaller and reading whether they are shortened or legitimate might not be possible.
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10 big things: The future of retail

Illustration: Rebecca Zisser / Axios

2017 has been retail's year of reckoning. For decades, brick-and-mortar retailers have taken on too much debt, built too many stores, and failed to understand the potential or practicalities of e-commerce. The price of these missteps have been steep: More than 6,000 stores have closed so far in 2017, the most of any year on record, and there are 65,000 fewer retail jobs in America than in January of this year.
On the other side of those stats is Amazon, which is taking an ever-growing slice of a rapidly expanding e-commerce pie, along with its army of third-party sellers. The Amazon revolution is one symptom of the growing dominance of mega tech firms that are changing the way America works and shops. Hop into our Black Friday Future of Retail stream for the big stories that will shape the consumer world in the years ahead.
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Lyft is raising another $500 million

Josh Edelson / AP

Ride-hail company Lyft is seeking to raise up to $500 million in additional funding, according to a share authorization document filed yesterday in Delaware. This comes one month after Lyft announced a planned $1 billion infusion led by CapitalG, an investment arm of Google parent Alphabet. A company spokesman stresses that the $500 million is not yet closed, but adds: "Increasing the potential for this round will allow us to further accelerate our commitment to serving passengers and drivers."

Details: The new investment would be an extension of the CapitalG-led round, at the same share price of $39.75. That means the $10 billion pre-money valuation remains static, but the post-money could now value Lyft at $11.5 billion.

Below is the Delaware document, which was provided to Axios by Lagniappe Labs (creator of the Prime Unicorn Index)


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At Walmart, watch out for EMMA

EMMA's point of view (Photo: Brain Corp.)

Walmart is moving fast into the autonomous age. Last week, it ordered 15 advanced self-driving semi-trucks from Tesla, and now Linkedin's Chip Cutter reports that a few stores are testing out EMMA, an autonomously driven floor scrubber. EMMA can careen through Walmart aisles at a whiplashing 2.5 miles an hour, evading unalert shoppers, stacks of cereal boxes along her way.

Why it matters: It's another lesson in the reality of robotics. Like iRobots and the Roomba, Brain Corp. started out with heady ideas of commercializing artificial intelligence, but has discovered that, at least for now, the technology and the market is much more prosaic.

EMMA is the invention of Brain Corp., a southern California robotics company that promotes the self-driving cleaner as an alternative to employing human janitors.

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Some U.S. wage growth — finally

In New York, where the minimum wage is rising (Photo: Spencer Platt / Getty)

A defining story of the era has been the malaise for workers. The U.S. economy and stock market have been healthy, and unemployment is at a stunning 4.1%, yet wages have been stagnant since the 1970s. Last year, workers in a few usually Democratic-voting manufacturing states struck back by tilting the election to Donald Trump.

What's new: Now, there's evidence that wages are up — and for blue-collar workers, not white-collar workers.

The details: In its latest issue, The Economist suggested that the decades-long misery may be over — median household income, it reported, is actually up the last three years. But at Indeed.com, the jobs listing site, chief economist Jed Kolko reports "no real wage gains for workers" for two years now.

So what's really happening? Speaking to Axios, Kolko says that wages in fact are up, and accelerating, but that it's specifically for "lower-wage jobs and for people with less education," he said.

That is not good news for white-collar workers, and the overall income picture remains flat. But in jobs in transportation, construction and mining, wages are up 3% to 4% this quarter on an annualized basis. "That's helping narrow some of the inequality gaps that widened in previous years," Kolko said.

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The big layoff in China

At Zhong Tian Steel in Changzhou (Photo: Kevin Frayer / Getty Images)

By the end of the year, some 1.8 million Chinese coal and steel workers will lose their jobs, victims of the government's shift to cleaner industries and a shutdown of small enterprises. To put that in perspective, the two industries employ just 192,000 workers in the U.S.

Why it matters: Ordinarily, China's leadership is most focused on social stability. The party always looks to avoid any outbreak of discontent that could threaten political calm. But now, the priority has shifted to producing higher-value, branded products sold internationally, and owning the future economy of electric and self-driving cars, advanced batteries, robotics and automation equipment.

That's why many of those coal and steel workers are receiving generous long-term payoffs. In one example, per the FT's Emily Feng, workers in Ma'anshan received early retirement worth $600 a month for 35 years.

Bill Bishop, author of the Axios China newsletter (sign up here), tells me that the turn is "all about re-orienting the bureaucracy to focus on greener, more balanced and sustainable development." He says it seemed to gain momentum after the 19th Communist Party Congress in October. The signal was a "very important change to one of its key guiding concepts," he said.

Bill's thought bubble: "The Party has changed the 'principal contradiction' that the Marxists in China believe defines society. Since 1981, near the start of the reform and opening era, the principal contradiction had been 'the ever-growing material and cultural needs of the people versus backward social production,' which effectively justified growth at all costs. For the Xi era, that contradiction is now 'between unbalanced and inadequate development and the people's ever-growing needs for a better life.' This puts much greater emphasis on the quality of how ordinary Chinese live."

He concludes: "It will be painful, it may fail, and it does not mean that China won't be exporting pollution and polluting industries while at the same time trying to clean up its own country."

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The death of the MBA

Illustration: Lazaro Gamio / Axios

U.S. graduate business schools — once magnets for American and international students seeking a certain route to a high income — are in an existential crisis. They are losing droves of students who are balking at sky-high tuition and, in the case of international applicants, turned off by President Trump's politics.

Why it matters: The once-venerated MBA is going the way of the diminished law degree, pushed aside by tech education. Graduates of the top 25 or so MBA schools still command the elite Wall Street and corporate jobs they always did, but the hundreds of others are scrambling, and some schools are shutting down their programs. Survivors are often offering new touchy-feely degrees like "master of social innovation."

The background: Most top-ranked U.S. business schools are doing just fine. Sixteen of the top 25 reported a jump in MBA program applications for the 2016-2017 academic year, and four schools — Yale, Columbia, Carnegie Melon, and the University of Chicago — saw double-digit leaps, per Poets & Quants, a website that covers graduate business education.

The problem: In the more than 350 programs that didn't make the top ranks, rising tuition costs and smaller returns in the form of employment and income have forced a rethink of the traditional MBA degree.

  • Campus recruiting at lower-ranked schools is down: In a survey by MBA Career Services, the 30 schools ranked 21 to 50 reported a 42% decrease in recruiting by companies in 2016. In 2015, this same group reported an 83% recruiting increase.
  • The value of an MBA is uncertain: MBA grads are facing shifting expectations from employers with more options than ever. "Especially for someone who might be 25 or 30, they're leaving with an MBA, and there's a question from employers, 'Well, you've got an MBA, but what else can you do for me?'" said Michael Prebil of the think tank New America.
  • Programs are shutting down: Wake Forest, the University of Iowa, Virginia Tech and other schools have all recently discontinued their full-time MBA programs.

A big problem is declining international interest: The enrollment at some mid-tier MBA programs is more than half international students. But 51% of B schools report a decline in international enrollment in fall 2016, a 13% jump from 2015, according to the MBA Career Services survey.

This is across the board: International enrollment at some top 25 schools is down, per Poets & Quants. For example, 32% of Georgetown's B school applicant pool was international in the 2016-2017 academic year, compared with 43% the year before. The trend is even more pronounced in the lower-ranked schools.

Trump administration's immigration policies are one reason. According to a GMAC survey conducted in February, 67% of prospective international MBAers would rethink their eventual study destination if they thought they'd be unable to obtain a work visa following the completion of their degree.

  • This is especially so for the best candidates. More than half of international applicants who scored over 700 (out of a possible 800) on the standard GMAT test said they were less likely to study in the U.S. than elsewhere because of their view of the Trump administration.
  • Who wins: While only 32% of U.S. business schools reported an increase in international applicants last year, 76% of Canadian schools and 67% of European schools saw a jump last year.

Graduate education is a global market: "The return on investment calculation for the international student is even more amplified for many of them, coming from markets that are more price sensitive," Scott DeRue, dean of the business school at the University of Michigan, tells Axios. "And then you layer onto that some of the uncertainties around the job market, the visa issues, and things of that sort that are well covered in the media, and I think that adds to the anxieties that international students will and could have."

Editor's Note: Sign up for Axios newsletters to get our smart brevity delivered to your inbox every morning.

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Report: WeWork to lease retail space

WeWork Toronto. Photo: Arthur Mola

WeWork has earned a $20 billion valuation providing shared workspaces to start-up companies, and now the firm is exploring the idea of leasing retail space as well, The Real Deal reports. Unnamed sources tell the trade publication that "what WeWork's retail business could look like is still unclear," but that "extending the firm's co-working model — furnished spaces on short-term leases — to retailers is a possibility."

Why it matters: WeWork has justified its sky-high valuation on the promise that it has the data and design expertise to help businesses become radically more efficient in their use of office space. The move suggests that WeWork believes it can also make money helping retailers invent the brick-and-mortar store of the future.

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Bankrupt Toys "R" Us asks court to okay huge executive bonuses

Photo: Paul J. Richards/AFP/Getty Images

Bankrupt retailer Toys "R" Us disclosed in court papers that it paid CEO David Brandon a $2.8 million retention bonus just before filing for Chapter 11 protection in September. Moreover, it's now asking court approval to approve up to another $12 million in incentive bonuses for Brandon, who already receives a base salary of $3.7 million. The New Jersey-based company also is seeking up to another $20 million in incentive pay for 16 other top executives, as first reported by The Wall Street Journal.

  • Toys "R" Us statement: "This type of plan is standard practice for a company involved in a restructuring and in this case rewards team members at all levels of the company."

Oh, really? At all levels? Brandon could receive nearly $15 million that is related to a bankruptcy that it was his job to prevent from happening in the first place. Other senior execs could get over $1 million a piece. The other 3,805 employees get to share from what would be a $60 million pot, per court approval, which works out to less than $16,000 per head. Guess which group will be manning cash registers at 5pm on Thanksgiving Day, and which will be home with their families?

  • Note: Brandon, who did a remarkable job in a prior CEO role with Domino's. But he should be sticking around to fix Toys "R" Us out of a sense of obligation — obviously he knew there were problems upon joining in mid-2015 — not because he's being bribed.

Among those who will receive no bonuses are limited partners in the private equity funds that owned Toys "R" Us (although they did pull out some money earlier via fees). But perhaps that's appropriate, given that the retailer's struggles are due as much to over-leveraging as to competition from the likes of Amazon and Walmart.

Below is one of the related court documents, filed last week:

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Lyft gets permit to test self-driving cars on California roads

Josh Edelson / AP

Lyft is the latest company to get a permit to test self-driving cars on California's public roads, according to the California Department of Motor Vehicles website.

Why it matters: Lyft earlier this year unveiled plans to build its own autonomous driving tech, as well as make its ride-hailing network available to other companies for testing. Getting the California permit suggests it's ready to begin putting self-driving cars on the road.