Trump administration makes move on self-driving cars - Axios
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Trump administration makes move on self-driving cars

A self-driving pizza delivery vehicle. Photo: Dee-Ann Durbin/AP

The Trump administration took its first step into the regulation of self-driving cars and trucks that could transform the nation's roadways. Transportation Secretary Elaine Chao rolled out updated voluntary guidelines for the vehicles during an appearance in Michigan:

  • They clarify that you don't need to get pre-approval from the Department of Transportation before deploying a autonomous vehicles, the department's agency tasked with the issue said on Tuesday. That's in line with the industry-friendly leanings of the Trump administration.
  • They also make other changes industry will appreciate, like pulling back on data-sharing requirements for companies and removing privacy from a clear part of the guidance, the agency said.
  • And the guidelines clear up the role of state and federal governments. Automakers and technology companies don't want a patchwork of state safety regulations.

The big picture: Federal authorities are trying to stake out their place in dealing with self-driving technology as Detroit and Silicon Valley race ahead. The House has already approved a bill that would accelerate testing, and the Senate is in the process of vetting a similar proposal.

The other coast: Industry likes the changes. The head of a coalition of self-driving car manufacturers including Waymo, Uber and Ford, said that it was "pleased to see the Trump Administration continuing the work to bring fully self-driving vehicles to U.S. roads." Intel said it applauded the agency's move.

Yes, but: Not everyone is a fan of the new guidelines. "After waiting months for the Trump Administration to release its vision for self-driving cars, AV Guidance 2.0 is a step backwards," said two top Democrats on the House Energy and Commerce Committee, Frank Pallone and Jan Schakowsky, in a statement. "Instead of focusing on safety and ensuring car makers are properly testing these vehicles, the Administration chose to cave to industry and pressure states into not acting."

Consumers Union, meanwhile, said strong federal oversight is needed and that the Department of Transportation "should be asking more of automakers, not less" when it comes to safety.

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A theory of cycles suggests a new golden economic age

Illustration: Rebecca Zisser / Axios

As of now, no one knows how to break the grip of low incomes, blighted towns and popular anger in the U.S. and elsewhere. But a Venezuelan economist named Carlota Perez says that, if history is correct, things only look uniquely tough. In her view, government needs to step in now, trigger serious market demand, and dampen financial excess in order to ignite a new golden economic age.

Why it matters: According to Perez, the last couple of centuries have been cycles of such maladies, each time leading to a decades-long period of broad prosperity. If she is right, the question is: How and when do we get to the golden age part?

The background: Lots of scholars resist the notion of cycles — that the arc of history repeats itself, or at least rhymes. The rap against such theory is that human behavior is not a hard science like physics, and thus it's impossible to reliably forecast the next big thing.

But, in American politics, Arthur Schlesinger Jr. found traction among peers with his theory of a repeating cycle of idealism and pragmatism. The message is that, yes, human history is not science. But neither is it chaos, and picking out repeating trendlines helps us figure out how to react to the crisis of the day.

In her work, Perez divides the last two centuries into five technological "surges," the first four of which led to golden economic ages, per a debate at Strategy + Business. They start with the industrial revolution, beginning in the 18th century; and are followed decades later by the age of steam and railways; then of steel and electricity; the age of oil, the car and mass production; and finally the information age, which began in the 1970s and continues today.

  • In the first four, financial manias erupted, until the bubbles burst and led to populist uprisings. Governments of the day stepped in, creating massive economic demand with tax- and debt-supported transcontinental railways, port projects and gun diplomacy in the Victorian boom; and, after World War II, highway construction, policy-backed suburbanization, farm subsidies, and the Cold War.
  • Perez did not respond to emails, but in numerous appearances over the last couple of years, she has suggested that market forces naturally create inequality and political turmoil, thus requiring those state interventions. There was no other way of defusing the crises and spreading the wealth.
  • And neither is there today. That is why she urges similar robust state intervention to usher in a fifth golden age. Perez suggestion — "smart green growth," by which she means renewable energy and the funding of a new urban lifestyle.
  • This is in fact what China is already doing — pouring tremendous amounts of resources into dominating electric cars, solar power, batteries, fast trains, and urbanization, while spending big money to retire legacy industries such as coal and steel. If the West fails to follow suit, and Perez is right, China may enter its own golden age without the U.S. and Europe.

In interviews, economists said a burst of state-prompted demand is probably not all that is required. Michael Gapen, chief economist at Barclays, tells Axios that something must be done about a concentration of economic power, including in Amazon, Apple, Facebook and Google.

"They have amassed a tremendous amount of concentration. There is general economic angst that the benefit is not as diffuse as we need," Gapen said.

Lee Branstetter, an economist at Carnegie Mellon University and co-author of a recent paper on lagging productivity in the U.S., said it's not even clear that the technological and financial pieces are in place for a new golden age. He said artificial intelligence may be the bridge to the next economic burst, but that investment in AI hardware and software is relatively weak.

"I want to believe that we are powering growth for the next several decades, but the dispositive evidence we'd want is not there," he said. "It's possible that slow growth is masking a great economic dawn. It's also possible that that we'll have to wait awhile till we can reorder and substantially impact the economy."

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Eatsa's robot-assisted tech for restaurants heads to Chicago

Eatsa, the San Francisco-based company that recently shuttered most of its robot-assisted restaurants, is beginning to make its technology available to outside eateries, starting with Chicago's Wow Bao.

Why it matters: This is a classic startup play—focus on the tech while leaving heavy operations to partners and customers, helping them to streamline restaurant operations.

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Report: Trump administration plans to halt work permits for H-1B spouses

Computer information specialist and immigrant from India, Santosh Pala, right, carries his three-month-old son Hemang during a prayer procession at the Karya Siddhi Hanuman Temple in Frisco, Texas, in 2015. Photo: LM Otero / AP.

The Trump administration plans to halt work permits for the spouses of H-1B visa holders, which would discourage H-1B visa applicants from staying in the country and would revoke the ability to work for thousands of visa holders' spouses, the San Francisco Chronicle reports.

Why it matters: It's another move by the Trump administration to make it more difficult for foreign workers to come to America in its larger effort to safeguard American jobs.

  • Approximately 100,000 spouses and children of H-1B visa holders come to the U.S. every year on a visa known as H-4.
  • These workers were not able to work in the U.S. before 2015, when President Barack Obama created a work permit for some H-4 holders.
  • Silicon Valley will be disproportionately affected, since many high-tech employers employ H-1B workers. Because of the region's high cost of living, It is difficult for a family to survive on one salary and, as a result, may not be able to stay in the country.
  • A decision on the H-4 work authorization will likely come soon, immigration attorneys told The Chronicle.

Other efforts: Earlier this week, a House committee advanced Rep. Darrell Issa's bill to increase restrictions on how "H-1B dependent" companies can obtain the work permits for employees. Find details of Issa's bill here, and the Indian firms' lobbying efforts against crack downs on H-1B visas here.

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Former JC Penney CEO: Amazon should fear Walmart

Elise Amendola / AP

Former JCPenney CEO and Apple Store pioneer Ron Johnson said on CNBC's Fast Money that Amazon "should be really worried" about Walmart's resurgence of late, arguing that the Bentonville retailer's network of stores is cheaper and more efficient to operate than Amazon's collection of warehouses.

Why it matters: Walmart's earnings announcement was the highlight of a week filled with surprisingly strong performances by Amazon's brick-and-mortar competitors, like Best Buy, Gap, Abercrombie, and Foot Locker, which all reported stronger than expected same-store sales growth. These performances have powered the SPDR S&P Retail ETF 3.9% higher this week — its best five-day stretch of the year.

Sound smart: Despite a good week, Retail indices are still down year-to-date, while Amazon's value is up more than 50%. Outside of a few exceptions like Walmart and Best Buy, brick-and-mortar retailers are still struggling to attract traffic and grow sales, just less so that we thought last week.

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Elon Musk unveils an electric semi-truck

Screenshot from Tesla live feed

In a typically showy ceremony in Southern California last night, Tesla CEO Elon Musk unveiled a sleek prototype electric semi-truck that he said will travel 500 miles on a charge, go zero to 60 mph in 20 seconds fully loaded, and charge most of the way in 30 minutes while a driver rests and eats. He appeared to say that the vehicle will be able to operate semi-autonomously in convoy, which would be the first step to self-driving trucks.

Why it matters: Musk did not say how much the truck will cost, but that it will be cheaper to operate than a standard diesel. If he is able to deliver the semi-truck as described, it seems likely to shake up the freight market just as he has the car business. Experts expect semi-truck traffic to surge in the coming decades as the global population grows to 9 billion people.

The unveil in an airport hanger in Hawthorne, CA., came as Musk is confronting doubts about his ability to pull off arguably his most important project of all — the scale-up of the Model 3, the flagship mainstream-priced electric that he has touted as Tesla's route to the mass market, and the jump-starting of a global electric car industry.

Tesla has taken more than 450,000 reservations at $1,000 apiece for the Model 3, which launched in July, and he was supposed to be turning out 5,000 of them a week by now. But, while making high-profile announcements about a Hyperloop, Space-X launches and now the prototype semi-truck, he has failed to create a standard automated assembly line for the Model 3, so his workers are building them in part by hand, and only by the dozen. As a result, Tesla's sky-high share price has plunged by about 19% over the last two months, closing at $312.50 yesterday.

    • Yet the semi-truck launch, with unexpected specs including a far-more-than-expected range, seems likely to wow his fans and quiet at least some of his critics. Musk said the average truck trip is less than 250 miles, which meant that a driver could do a round trip without recharging. Still, Musk said the truck's battery pack, built into the floorboard, can be charged to 80% of capacity in 30 minutes. He said solar-powered "mega-charging" stations for the trucks would be installed worldwide, and would be priced at 7 cents a kilowatt.
    • The cost per mile would be $1.26, compared with $1.51 for a diesel-operated truck. If the semi-truck is operated in a convoy, he said, the efficiencies took the operating cost below $1 a mile, and made them cheaper than moving freight by train.
    • The two details — range and recharge time — were crucial, and they dispelled the most profound doubts about the truck. In addition, he said standard equipment will include automatic breaking, lane-keeping and forward collision warning.
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GOP tax plans could worsen housing affordability crisis

Photo: Keith Srakocic / AP

Proposed changes to corporate tax rates, and tax credits for the construction of below-market housing, could worsen the nation's affordability crisis, the Wall Street Journal reports.

Why it matters: A recent report from Freddie Mac estimates that America's stock of housing that is affordable for low-income Americans fell by 60% between 2010 and 2016.

  • The problem is concentrated in cities with the highest-paying jobs, like New York, Seattle, and San Francisco.
  • The lack of affordable homes in America's most economically vibrant areas is reducing economic mobility, because workers cannot afford to move to cities with higher-paying jobs.

Both the House and Senate tax bills, by lowering the corporate tax rate from 35% to 20%, would automatically reduce the uptake of the affordable housing credit, because lower rates make tax credits less valuable.

  • The House bill goes further, eliminating a tax break on bonds used to finance affordable housing projects.
  • The Journal cites a report by Novogradac & Co., an accounting firm specializing in real estate, that predicts if the House bill passes, the U.S. economy would create 1 million fewer affordable housing units over ten years.

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Immelt says he wasn't "ready" to lead Uber

Lauren Olinger / Axios

Former GE CEO Jeffrey Immelt said he's ok with not getting picked to be CEO of Uber. "At the end of the day I wasn't really ready for something that visible, that intense," Immelt said at an Axios "Smarter Faster Revolution" event at the University of North Carolina.

He said Uber is based on a "seminal" idea but an open question remains: "Can you take this thing that's an amazing idea and turn it into a fantastic business, a profitable business?"

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Average Bitcoin investor would sell at $196,165 — or 26x current value

A Robocoin kiosk used to sell bitcoins. Photo: Jeff Chiu / AP

A new LendEDU survey of Bitcoin investors shows that a vast majority plan to hold their investment for over a year, challenging the assumption that the cryptocurrency is mostly used by short-term investors.

Why it matters: Only 16.49% of respondents to the survey said they planned to hold their Bitcoin for less than a year, coupled with more than two-thirds who hadn't sold any of their investment. If these results are actually indicative of most Bitcoin investors, that finding suggests a much stronger long-term outlook for the cryptocurrency as a viable, productive investment.

More from the survey:

  • A third of Bitcoin investors don't plan on reporting their purchase to the IRS, which officially states that "virtual currency is treated as property for U.S. federal tax purposes. General tax principles that apply to property transactions apply to transactions using virtual currency."
  • The average investor would sell their Bitcoin at a price of $196,165.78, which is more than 26 times higher than the current price of $7,476.78.
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Best Buy misses revenue forecast on late iPhone release

Alan Diaz / AP

Best Buy reported third-quarter earnings and revenue below analyst forecasts, sending the retailer's stock down 6.6% in early trading Thursday. It said $100 million in revenue was not registered in the third quarter, due to Apple delaying the release of its iPhone X—though these sales will presumably show up in the fourth quarter numbers.

Why it matters: Best Buy has ramped up discounts to keep pace with rivals like Amazon.com, and is now offering free shipping through Christmas, with no minimum order requirements.

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Trucks are fueling the world's oil demand

Tesla is hardly the only player in the nascent electric truck market — as Bloomberg notes — as big companies like Daimler and Cummins are moving toward commercialization.

Why electric trucks matter: Trucks, especially big rigs, are a small percentage of vehicles on the road but use lots of oil. (Check out the chart above, reconstructed from the International Energy Agency's new World Energy Outlook 2017.)

Data: IEA World Energy Outlook 2017, OECD/IEA; Chart: Andrew Witherspoon / Axios

In what amounts to IEA's base case (a model of existing and officially announced policies), oil demand for trucking swells to 20 million barrels per day in 2040, led by that sharp increase you see in diesel demand for heavy-duty freight.

  • It's one reason, though hardly the only one, why IEA does not forecast a peak in global crude oil demand through the end of their analysis period in 2040.

The bottom line: Widespread deployment of electric heavy-duty trucking — alongside other alternative fuels and stronger fuel efficiency mandates for diesel-powered rigs — could alter the trajectory of oil demand in coming decade if Musk and other players can make it cost-effective.

Go deeper: Check out a preview of Tesla's electric truck, which is scheduled to be unveiled today.