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1 big thing: The rise of driverless delivery
A new report suggests autonomous vehicles could deliver goods cheaper and faster — within an hour or two of ordering in some cases — and have a major impact on consumer behavior.
The big picture: It's still unclear whether people will embrace self-driving vehicles, but the report by KPMG says one way it could happen is by lowering the cost of goods delivery, enabling e-commerce to take a larger bite out of brick-and-mortar sales and reducing the number of shopping trips people make.
- That access to fast, low-cost delivery could make it irresistible to order even more stuff — and send profound ripples through the economy.
- They envision orders for goods being filled using a combination of artificial intelligence and robots, then delivered via a fleet of AVs.
- In some places, packages or groceries could be delivered right to your door. In more congested urban areas, they might be sent to a secure locker, the modern-day equivalent of a milk box.
- Ford estimates AVs will drive down delivery cost per mile to around $1 from $2.50, but KPMG says delivery cost for small, single-package "bots" could be as little as 4 to 7 cents per mile.
- Quick, low-cost delivery options could mean people cut their shopping trips in half and buy stuff online 1.5 to 3 times more frequently, the authors estimate by applying population projections to government data on today's shopping trips per household.
"Our thesis is that consumer demand will go up because it’s so easy. It will be great for the economy."— Gary Silberg, KPMG's automotive sector leader
Yes, but: People are wary of riding in self-driving cars, and the consumer demand for AV delivery is unclear.
- KPMG studied Chicago shoppers' visits to Walmart, Costco and Target and concluded consumers are more likely to request delivery from their neighborhood Walmart and Target, but will still travel longer distances to go to Costco for the experience.
- The authors think consumers might be more willing to take a risk on AV grocery delivery; if something goes wrong, they might lose just a few broken eggs.
What's happening: A handful of automakers and AV tech companies are collaborating with U.S. retailers to explore autonomous goods delivery.
- Kroger and AV startup Nuro are experimenting with same-day grocery delivery in Scottsdale, Arizona.
- Toyota partnered with Amazon and Pizza Hut, among others, to explore uses for its e-Palette autonomous concept vehicle.
- In China, e-commerce giants JD and Alibaba are already piloting driverless robots that deliver goods to a secure e-locker.
What to watch: Smart retailers could have two choices — make delivery super-easy for their customers, or make their stores so inviting people will still want to make the trip.
2. Why AVs need independent safety tests
Through its 5-star rating program, the National Highway Traffic Safety Administration already provides a standardized evaluation of crash test performance that assesses a vehicle's core hardware. The same approach should now be taken for a vehicle's self-driving software, Matthew Colford, head of policy at AV simulation software supplier Applied Intuition, writes for Axios Expert Voices.
The big picture: No jurisdiction has yet imposed an independent test to validate AV software. The challenges of designing such a test have themselves been a deterrent, as has the fear of stifling innovation, but AVs will have to undergo independent validation to earn confidence in their decision-making.
Details: It's not feasible to test every feature at once, or to declare that no vehicle is fit to be deployed until it can navigate any conceivable scenario.
- Regulators could begin by independently validating the 100 most common scenarios, like merging into freeway traffic. A car that boasts level 4 or 5 autonomy but cannot handle these situations should not be on public roads.
- Initial tests could be conducted in a virtual environment, making them easier to scale, replicate and develop in sophistication over time.
- NHTSA, state regulators and AV providers could collaborate on the number and types of scenarios that should be tested for specific environments (highways, city streets, residential neighborhoods). AV providers would have input but would not be forced to share their internal training scenarios.
The bottom line: While we must be careful not to over-regulate AVs as they come to market amid intense global competition, taking clear steps toward independent validation is essential for safety and consumer trust.
Go deeper: Read the full post.
3. Driving the conversation
I want to hear — and share — what you're reading about AVs. Send me a link to an article and your expert analysis of why it matters to email@example.com.
- The big picture: GM is tightening its belt by laying off roughly 15% of its workforce with an eye toward investing more in autonomous and electric vehicles, a bold bet on a future that is far from certain.
- Wall Street loved the decisive move ahead of an expected recession, but President Trump was furious. GM may have had little choice, given the disruption buffeting automakers.
Inside Uber: Employees describe infighting and questionable decisions before the fatal self-driving car accident (Julie Bort — Business Insider)
- My thought bubble: This is a sad but important lesson about what AV companies should not be doing as they race to introduce autonomous technology. Take it slow. Get it right.
Safety delays: Waymo's cars play it safer after incidents and "driver fatigue" (Amir Efrati — The Information)
- Why it matters, per Carnegie Mellon's Philip Koopman: "Hopefully the self-driving car industry is realizing that as the technology gets comparatively better, you need better safety drivers and more attention to ensure they stay alert."
- Separately, just yesterday, Waymo announced they hired their first chief safety officer — Deborah Hersman from the National Safety Council who will "oversee the design and enhancement of Waymo’s product safety program, working closely with Waymo’s engineering, product and legal teams."
4. New car standards could boost AV industry
Because current safety tests are outdated, NHTSA is preparing to update its New Car Assessment Program (NCAP) to incorporate newer features, including some that will be in AVs, into the safety rating program, Christopher O'Connor, CEO of Humanetics, writes for Axios.
Why it matters: The U.S. is a global leader in AV innovation, home to 163 AV-related companies. But a flourishing market requires rigorous and consistent safety testing of all new technology, and NCAP updates will play a crucial role.
Background: Current NCAP tests have yet to catch up to what's on the market today, much less what's coming as AV technology advances.
- Many widely available automated features, such as automatic emergency braking and adaptive cruise control, aren't addressed.
- Crash test dummies developed in the 1980s are used in the tests, but they don't have as many sensors as today's models.
- Common scenarios — like small-overlap crashes, which involve roughly one quarter of the vehicle — are omitted.
- They also largely overlook pedestrian safety, despite the fact that accidents involving pedestrians reached a 25-year high in 2017.
How it works: The proposed 2020 NCAP would test safety features and crash- avoidance systems in an updated set of scenarios, and clearly communicate to consumers how they factor into the overall vehicle safety rating.
- High ratings will improve consumer confidence in partially and fully autonomous vehicles, which should create an incentive for AV companies to push for robust safety standards.
What to watch: NHTSA leadership is currently reviewing feedback submitted during the October public comment period by automakers, testing equipment suppliers, automotive safety councils and consumer advocacy groups.
- It's up to them to chart the path forward, ideally in time for manufacturers to conduct internal tests and implement design changes for their next model-year vehicles.
Go deeper: Read the full post.
5. 1 adventurous thing
Electric vehicle startup Rivian made its debut at AutoMobility LA by taking the wraps off 2 new rugged battery-powered models — a pickup truck and a 7-passenger SUV.
The big picture: Rivian is one of a slew of EV startups trying to elbow its way into the automotive industry at a time of unprecedented disruption. Rivian is targeting a unique niche: adventurous, off-roading families.
Details: The R1T and R1S are particularly ambitious efforts, with big promises on performance, autonomous technology, and off-road capability.
- They'll launch with Level 3 autonomy (eyes off, hands off) but Rivian says they will eventually offer full self-driving capability.
- Both models come with 3 battery choices: 105 kWh, 135 kWh (for fast performance), and 180 kWh (for longer range).
- They goes on sale starting in 2020, with a price of $61,500 for the R1T and $65,000 for the R1S after the federal EV tax credit.
Success is a long shot, but the company has wealthy backers, including Middle East conglomerate Abdul Latif Jameel. Founder RJ Scaringe told me he's talking to several strategic investors, too.
- The twist: Rivian is also plotting a strategy to share its technology with other companies and says its system can fit jet skis and snowmobiles, too.
My thought bubble: Consumers still suffer from range anxiety when it comes to EVs. I can't imagine driving off into the wilderness in an EV, wondering if I'll have enough juice to get back to civilization. Maybe that's where the adventure comes in.
Go deeper: Read the full post here.