Jul 12, 2019

Axios Navigate

Joann Muller

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Today's Smart Brevity count: 1,320 words, about a 5 minute read.

Expert Voices contributor Henry Claypool looks at the exploding demand for accessible AVs and Raphael Gindrat examines the implications of streamlining ride-sharing networks with public transit.

1 big thing: Argo wins big in the Ford-VW deal

llustration: Rebecca Zisser/Axios

Today's sweeping technology agreement between Ford and Volkswagen will give Pittsburgh startup Argo AI an injection of $2.6 billion in new capital from VW plus significant new engineering resources in Europe.

Why it matters: The development of self-driving cars is taking longer than expected, so the influx of capital gives Argo a longer runway than some of its less well-funded competitors.

  • And it's a vote of confidence in Argo, not yet 3 years old and often dismissed as a laggard behind higher-profile companies like Waymo and Cruise.

Driving the news: Ford and VW this morning said they would expand an existing global alliance to collaborate on electric and self-driving vehicles, two of the most challenging and expensive new technologies in a rapidly changing industry.

  • Ford will use VW's electric vehicle architecture to create at least one EV for the European market starting in 2023 — a second model is under discussion.
  • Ford is the first additional carmaker to use VW's dedicated EV platform, and expects it to be the basis for more than 600,000 plug-in models in Europe.
  • For VW, opening up use of its EV tech can provide revenue to help fund its plans to launch almost 70 new electric models over the next 10 years.

But the most important aspect of today's news is the elevation of Argo as a well-capitalized self-driving technology platform, now with a global footprint.

  • The $2.6 billion investment in Argo includes a commitment for $1 billion in funding, plus the resources of VW's Autonomous Intelligent Driving Group, valued at $1.6 billion.
  • After the deal, Argo is worth more than $7 billion, the companies said.
  • Ford and VW will hold equal "substantial" stakes in Argo, with the balance of the equity set aside for employees.
  • Amid a war for talent, Argo instantly adds 200 engineers from VW's Munich-based self-driving unit.
  • In a blog post, Argo CEO Bryan Salesky said it is the first self-driving company with "definitive deployment plans in both the U.S. and Europe."

What they're saying:

  • "Building safe and robust vehicles is difficult and capital intensive," says Navigant Research analyst Sam Abuelsamid. "Partnering with an OEM rather than taking VC money allowed them each to focus on what they do best while collaborating from the start to make sure everything is well integrated."
  • Being based in Pittsburgh also helps Argo, Abuelsamid says. "By staying out to the Silicon Valley limelight, there is less pressure to show off demos of technology that isn't ready."

What to watch: Argo may now be well-funded with two powerhouse partners, but the challenge will be preserving the heads-down culture of a startup, especially as it folds in VW's engineers from Germany.

2. Accessible AVs are needed as U.S. ages

Illustration: Sarah Grillo/Axios

As the U.S. population ages, the number of people with travel-limiting disabilities is projected to increase dramatically, which could drive up demand for accessible autonomous vehicles, Henry Claypool writes for Axios Expert Voices.

The big picture: Retirement communities are expecting an influx of new residents, many who are likely to be non-drivers who require transportation to maintain their independence.

  • Between 2010 and 2014, the U.S. wheelchair-using population increased by 50.4% to 5.5 million. It is projected to hit 12.4 million by 2022.
  • Demand for wheelchair-accessible vehicles is growing 10.75% per year.

Context: Retirement communities have significant populations of non-drivers, and are naturally geofenced areas.

  • The closed-circuit design, predictable traffic patterns, and low-speed limits of retirement communities could make them ideal for deploying AVs — even sooner than they may be deployed on public roads.

Yes, but: Providing senior citizens with reliable, effective service will depend on vehicle accessibility — and retirement communities will need not only wheelchair accessible vehicles, but potentially vehicles that can accommodate more than one wheelchair.

What we're watching: Two players in the AV space are already eyeing the retirement community opportunity:

Claypool is a policy expert affiliated with UCSF and AAPD, and a former director of the U.S. Health and Human Services Office on Disability.

3. Connecting Lyft or Uber with public transit could bring data risks

Illustration: Sarah Grillo/Axios

Uber, Lyft and transportation agencies across the U.S. are encouraging customers to combine ride-hailing with public transit, ultimately to try to streamline travel options and payment, writes Bestmile CEO Raphael Gindrat.

Why it matters: These partnerships could fill in gaps in public transportation without worsening congestion. But they could also expose public transit riders to data privacy risks, and upend transit's business model.

What's happening: Aside from displaying transit schedules in their apps, Uber and Lyft also give discounts to customers who hail rides to and from public transit hubs.

The impact: The convenience is a huge selling point, but there could be unforeseen consequences.

  • Critics are concerned that private companies could control access to transit.
    • Ride-hailing companies could end up divvying up which services are available within their respective apps, creating parallel transportation systems.
  • Regulations around data sharing and customer data privacy have yet to be set.
    • It's unclear if Uber or Lyft could access public transit data and how it would be protected — and how much of their proprietary data would be shared with transportation agencies.
  • Pricing models could shift.
    • Ride-hailing prices in one case increased after a discount was offered.
    • It's eventually possible that transit riders could be siphoned off by ride hailing — or that companies could charge to offset discounted miles, or to feature transit within their apps.

What we're watching: As partnerships between ride-hailing companies and public transit evolve, cities will need to create enforceable rules and regulations to make sure services remain accessible and affordable.

Read the full post.

Gindrat is co-founder and CEO of Bestmile, which has developed a fleet-management platform.

4. Driving the conversation

NTSB finding: Self-driving shuttle crashed in Las Vegas because manual controls were locked away (Sean O'Kane — The Verge)

  • Why it matters: The low-speed crash between a self-driving shuttle and a delivery truck in Las Vegas in 2017 was a black eye for the shuttle operator, Keolis, and a reminder that AVs are going to have to share the road with traditional vehicles for a long time.

V2X debate: FCC delays review of spectrum assigned to vehicle communication (David Shepardson — Reuters)

  • The big picture: Tech and telecom companies have been fighting for years to gain access to a band of spectrum reserved for vehicle-to-infrastructure communications. The review could have opened up that spectrum to sharing but was delayed at the behest of Transportation Secretary Elaine Chao, who expressed safety concerns.

ICYMI: BMW and Daimler team up on automated driving (Tassilo Hummel — Reuters)

  • Why it matters: Amid pressure from shrinking margins, the German rivals finalized a previously announced partnership on AVs, bringing together 1,200 developers with an eye toward deploying mass-market vehicles by 2024.
5. What I'm driving

Dodge Durango SRT. Photo: FCA

My weekly vehicle test drive, with a focus on advanced technologies...

Over the long holiday weekend, my family and I were tooling around the New Hampshire Lakes Region in a white Dodge Durango SRT with bright blue racing stripes and black wheels.

The consensus of family and friends: it's one of the ugliest cars they'd ever seen (though it's not hard to see that my family is not the target audience for this vehicle.)

  • The Durango SRT is a hot-rod version of a family-hauling SUV, with a 475-horsepower HEMI V-8 engine — maybe a way to appease Dad when Mom wants a minivan.

Driver assistance technology is an afterthought: you have to pay $2,395 extra to add adaptive cruise control, forward-collision warning and lane departure warning.

One feature that really helps drivers but is often overlooked in any car are the headlights.

  • The Durango SRT's excellent automatic high-beams were a big help at night spotting deer and a bear on the winding backwoods roads.
  • They come with an auto-leveling system that adjusts the beams based on the pitch of the car and automatically dim when they detect an oncoming car.

The bottom line: At $76,645, however — the kind of money you'd spend on a Volvo equipped with more safety and driver-assistance technology — there are probably more practical choices than a tricked-out Durango.

Joann Muller