Axios Navigate

A map location marker.

June 12, 2019

Good morning! Thanks for reading. Please share this newsletter and tell your friends they can subscribe here. If you have tips or feedback, just reply to this email.

Expert Voices contributor Philipp Kampshoff writes about the logistical challenges of last meter delivery.

Today's Smart Brevity count: 1,109 words / ~ 4 minute read.

1 big thing: Uber's lofty air taxi vision

 Illustration of car with bicycle tires and a helicopter rotor blade

Illustration: Rebecca Zisser/Axios

Uber looked more like an aviation company than a ride-sharing provider at a conference this week where it was showcasing concepts and partnerships as it tries to seed an ecosystem to support the world's first urban air taxi network.

The big picture: Barely a decade old, Uber today is synonymous with ride-hailing. But the company is creeping further into daily life, with ambitions to help manage everything from how people get to work, to what they order for meals when they get home.

Between the lines: Speaking yesterday to an audience at the Economic Club of Washington, D.C., Uber CEO Dara Khosrowshahi said...

  • "We really want to move from being a ride-hailing app to essentially being your transportation partner."
  • His vision is to have a multi-modal Uber transportation network that, with a push of a button, helps people plan how to get from A to B, balancing tradeoffs like time, convenience and price.
  • Uber doesn't just want to move people — this morning, the company announced it will start testing drone food delivery in urban areas.

Yes, but: Multiple obstacles stand in the way of flying cars, including regulations, infrastructure and air traffic management issues, not to mention consumer acceptance and safety, Deloitte's Robin Lineberger tells Axios.

  • "They will be a legitimate part of a multi-modal transportation system, in 20 to 30 years," he says.

Driving the news: At its third annual Uber Elevate conference, the company showcased vertical takeoff and landing models from 5 potential suppliers, including a full-size model from Bell that looks like a cross between a plane and a helicopter.

  • Attendees could climb into a mockup of a cabin interior built by the French aerospace company Safran or strap on virtual reality headsets to experience what a flying taxi ride would be like.
  • Uber said Melbourne, Australia, would be its first international pilot site for Uber Air, after Los Angeles and Dallas-Fort Worth in the U.S., starting in 2020.
  • And it showcased 16 potential designs for urban skyports (see below), where flying taxis would take off and land.

Uber wants to "get the industry moving and designing these vehicles so that they can be available for urban transportation," Khosrowshahi said. "We want the pricing of this service to be ultimately available for the masses versus just the elites."

So far, it looks out of reach for most. A new 8-minute Uber helicopter shuttle between Manhattan and John F. Kennedy Airport is expected to cost $200 when it launches next month.

  • In the wake of a helicopter crash this week on the roof of a building in Manhattan, some lawmakers want to see a ban on such flights.
  • And some argue it overshadows existing transit reform efforts.

The bottom line: The market for air taxis is expected to grow from $3.4 billion in 2025 to $17.7 billion by 2040, according to Deloitte, and for Uber, which lost $1 billion in its first quarter as a publicly held company, that opportunity is hard to pass up.

  • "We think it’s time to lean forward," Khosrowshahi said. "The business is well positioned to profit. But the next 2, 3, 4 years are going to be about growth."

Go deeper:

2. VW and Ford on cusp of new AV deal

Illustration of a seat belt coming together with one part of the belt covered in a Ford logo pattern and the other in a VW logo pattern.

Illustration: Aïda Amer/Axios

Volkswagen, which ended an 18-month partnership with Aurora Technologies on self-driving cars, could be getting ready to announce a new deal with Ford, Bloomberg reports.

Background: Ford and VW have already announced a broad alliance on commercial vehicles and pickup trucks, and have said they intend to cooperate on expensive new technologies in an uncertain future.

What to watch: VW is likely to take a stake in Argo AI, the Ford-backed self-driving technology startup.

3. Getting packages to your doorstep

Illustration of a shipping box with a straight path to a door that becomes more complicated towards the end

Illustration: Rebecca Zisser/Axios

In an eye-catching video, Ford and Agility Robotics recently touted their partnership and vision for autonomous delivery, illustrating the need for a system that can navigate from a parked vehicle up a set of stairs to reach the front door, writes Philipp Kampshoff for Axios Expert Voices.

The big picture: Autonomous vehicles are expected to decrease delivery costs by eventually removing drivers from the equation entirely, but the logistics of last meter delivery, in particular remain intractable.

Details: Industry leaders in the autonomous delivery space are generally pursuing 2 solutions to get deliveries into the hands of recipients: parcel lockers and “motherships."

The parcel locker model involves storage units in highly trafficked areas that separate and secure packages for numerous recipients. Amazon already has lockers at Whole Foods locations.

  • Parcel lockers decrease delivery costs, mainly by reducing driving distances.
  • However, if parcel lockers proliferate, they will likely demand some infrastructure investment in city centers, where real estate costs are high.
  • Not to mention, parcel lockers put a burden on consumers to "commute" to retrieve parcels and to get them home.

In the mothership model, a large AV would not only hold the parcels, but also fleet of drones or bots that can navigate stairs and apartment buildings for example.

  • This model has a high potential for cost reduction as no human driver is needed in the vehicle.
  • However use of drones at scale will require a federal regulatory framework, and the drones themselves will need HD maps for every potential delivery location.
  • This model could run into additional complications in dense cities as buildings and high foot traffic could make navigation more challenging.

The bottom line: The last meter of package delivery may prove to be the biggest challenge.

Kampshoff is a partner at McKinsey & Company in the automotive & assembly practice.

4. Driving the conversation

Bus stop: Why electric buses haven't taken over the world — yet (Aarian Marshall — Wired)

  • The big picture: Electric buses are a clean, efficient way to move people in cities, but just like passenger EVs, they need to be recharged, and many cities are still lacking adequate charging infrastructure.

Disruption: Driverless cars are coming for the airlines (Stephen Rice and Scott Winter — Fast Company)

  • Why it matters: Research shows for long trips, people prefer flying, until you take away the task of driving. Then, flying becomes the bigger hassle.

Buckle up: New feature on 2020 Chevrolet and GMC models won't let the car move until driver fastens their seatbelt (Drew Dorian — Car and Driver)

  • My thought bubble: GM's Buckle to Drive feature is the latest component in GM's teen driver system introduced in 2015, and something like this will probably need to be installed on self-driving cars to ensure safety.

5. 1 more Uber thing

Rendering of an Uber multi-modal skyport design in Dallas

A skyport concept. Image: Humphreys & Partners Architects

Flying cars will need urban skyports, which is why Uber is soliciting ideas from architects for takeoff and landing hubs in L.A., Dallas and Melbourne, its first three Uber Air test cities.

Why it matters: As mentioned earlier, Uber is pushing for multi-modal solutions, where riders can easily transfer from one leg of their journey to the next.

The Volary, proposed for Dallas, is designed to look as if it is suspended in the air, according to a press release from its architects, Humphrey & Partners.

  • The vertical atrium is constructed of tinted, sound-absorbing "smart" glass.
  • Besides a landing pad on the roof, it can support bikes, scooter and electric vehicle charging and has more than 9,500 square feet of retail space.
  • The "natural, organic materials" create a highly sustainable building with a "zero net energy footprint," Walter Hughes, the firm's chief innovation officer, says in a statement.

The bottom line: When it comes to the design, Hughes says, “Less is more."