Is Uber going to build self-driving cars?

The future looks bright for an Uber manager, thinking of all the fully-autonomous  vehicles that will roll through our streets in a couple of years. If you need a car you just fire up your Uber app, and a couple of minutes later you will get in a self-driving Uber car. No need anymore for Uber to sign up new drivers and make sure that always enough of them are on the street. Automatic algorithms can simply dispatch autonomous cars on the streets, depending on actual and expected demand. And all 160,000-something drivers of Uber can slowly be replaced with a safe and smart “robot car” … Everyone is happy! :)

As soon as all technological and regulatory challenges are met to have the fully-autonomous car ready for sale, Uber just hast to make sure to get enough cars for their business. So far, it looked like as they had already identified a potential partner – Tesla. Steve Juvertson, a Tesla board member, is pretty sure that Uber is going to fill Tesla’s order books:

 

“Travis [Kalanick  – CEO of Uber] recently told me that in 2020, if Telsas are autonomous, he’d want to buy all of them. He said all 500,000 of estimated 2020 production, I’d want them all,” Jurvetson said. “But he couldn’t get a return call from Elon [Musk – CEO of Tesla].”
[…] “I’m not saying you’re all going to have robocars. But, for those of us who have a chance to be in one, there’ll be one of those epiphanies. You’ll never go back.”
Uber will buy all the self-driving cars that Tesla can build in 2020

 

However, it seems that Uber is not only relying on Tesla or other OEMs to build the car for them. Recently Uber has invested in a couple of areas that indicate their potential interest to build their own self-driving cars. First, Uber set up shop close to the Carnegie Mellon University’s robotics center in Pittsburgh, USA, in January 2015. From there they went on a hiring spree to get more than 50 people of the top staff from the robotics center for their newly set up subsidiary.

 

“They took all the guys that were working on vehicle autonomy — basically whole groups, whole teams of developers, commercialization specialists, all the guys that find grants and who were bringing the intellectual property,” recalls a person who was there during the departures. “These guys, they took everybody.”
Uber gutted Carnegie Mellon’s top robotics lab to build self-driving cars

 

Gov. Doug Ducey, third left, signs an agreement with University of Arizona President Ann Weaver, second right, and Brian McClendon, the vice president for Uber which will allow them to the test and do research on driverless technology in the Tucson area. (A.E. Araiza/Arizona Daily Star via AP)

Gov. Doug Ducey, third left, signs an agreement with University of Arizona President Ann Weaver, second right, and Brian McClendon, the vice president for Uber which will allow them to the test and do research on driverless technology in the Tucson area. (A.E. Araiza/Arizona Daily Star via AP)

Later on, Uber and Carnegie Mellon University announced that they will form a strategic partnership, with “focus on the development of key long-term technologies that advance Uber’s mission of bringing safe, reliable transportation to everyone, everywhere”.

This was not the last new development, though. In August 2015, Uber announced that it will partner with University of Arizona for self-driving car research.

 

Uber has signed a partnership with the University of Arizona focused on research and development in the optics space for mapping and safety. We’ll work with some of the world’s leading experts in lens design at the University to improve the imagery we capture and use to build out mapping and safety features. As part of this partnership, Uber will also be donating to U of A’s College of Optical Sciences — supporting the next generation of optical scientists and engineers as they make new exciting breakthroughs.
Driving Innovation In Arizona

 

I am not convinced that we will see a self-produced Uber car on the road, though. There would be much more invest needed in order to get to be able to produce a working car than just forming strategic partnerships and investing in knowledge. The necessary asset invest would be huge as well, completely going against the current Uber model. However, it is a good way for Uber to keep all strategic options open. They could, for example, partner with an existing OEM sometime in the future and add additional engineering capabilities to make sure to get exactly the right car for their future “driver-less” business model.

Tesla’s Secret Formula

Model X - teslamotors.com

Model X – teslamotors.com

 

A long and interesting read at Forbes on Tesla’s approach on building a car. Coming not as the classic ‘disruptor’ gaining traction only as an alternative slightly inferior product for the price-conscious customer (e.g.what Skype was compared to classic long-distance phone calls in the beginning), Tesla positions itself as ‘high-end disruptor’.

 

High-end disruptors produce innovations that are leapfrog in nature, making them difficult to imitate rapidly. They outperform existing products on critical attributes on their debut; they sell for a premium price rather than a discount; and they target incumbents’ most profitable customers, going after the most discriminating and least price-sensitive buyers before spreading to the mainstream.
Forbes – Decoding Tesla’s Secret Formula

 

While still losing money, Tesla is constantly refining its processes and products, learning from other industries than automotive. Customer experience – similar as Apple’s approach -is everything, even if it means to have to spend more money than necessary.

 

Learning in an environment of uncertainty requires a willingness to admit mistakes and move quickly rather than digging in and doing nothing for fear of admitting failure. In fact, obsessively attempting to avoid failure can lead to the greater failure of missing the big opportunity.
Forbes – Decoding Tesla’s Secret Formula

 

When will we see the first Apple Car on the road?

The Guardian had an interesting article, indicating that Apple’s (autonomous) car might be closer to start of production than expected. They try to tie this down on base of Apple’s interest in a former Naval base that could be used as secret testing ground for an Apple car.

 

Apple is building a self-driving car in Silicon Valley, and is scouting for secure locations in the San Francisco Bay area to test it, the Guardian has learned. Documents show the oft-rumoured Apple car project appears to be further along than many suspected.

In May, engineers from Apple’s secretive Special Project group met with officials from GoMentum Station, a 2,100-acre former naval base near San Francisco that is being turned into a high-security testing ground for autonomous vehicles.
The Guardian

 

Combine that with Apple designer Marc Newson’s “design pet-peeve”, the automotive industry, and you can imagine even more that Apple has already the design and marketing for the soon-to-be-available car worked out:

 

My design pet-peeve is: the automotive industry. There were moments when cars somehow encapsulated everything that was good about progress. But right now we’re at the bottom of a trough.
WSJ interview with Marc Newson

 

However, while it is obvious that Apple is having a close look at the automotive industry, this does not mean that we will see an Apple Car on the street very soon. Designing a good looking car is one thing, getting manufacturing and technology right is another. As reported, Tim Cook and several executives met with BMW recently, and they still will have to figure out how to build an actual working vehicle.

Apple’s plan to have a separate testing facility does make sense in this context, so that they can start now to test functions and systems, figuring out the manufacturing process (or identifying which existing car OEM they simply would like to partner/buy instead), and preparing everything what is needed from regulatory and government perspective as well. Having a good looking car that is able to perform well in a crash test for example, might be a bit more difficult than getting a phone approved. Thus, having Apple investing now in testing grounds and further expertise might indicate a possible real car not already in 2016, but a couple of years down the road instead.

China Light Vehicle Production YTD July 2015 – weak Sedan segment further slows down growth

July has been an especially challenging month for the Automotive industry in China. The latest CAAM data shows a YoY decrease in production in July 2015 compared to July 2014 by -12.1%, mainly driven by the slow sedan segment with -27% YoY growth.

This weak monthly development brings down the overall growth in Passenger Vehicle segment to 4.0% YTD, 11.63 million produced cars compared to the 11.18 million of same time frame in the previous year. Combined with the weak LCV segment (-8.5% YTD growth), the total Light Vehicle production in China thus only grew by 2.4%, from 12.78 million units to 13.10 million units YTD July.

 

Light Vehicle Production China YTD July 2015 - Source: CAAM

Light Vehicle Production China YTD July 2015 – million units – Source: CAAM

 

Passenger Vehicle Production China YTD July 2015 - Source: CAAM

Passenger Vehicle Production China YTD July 2015 – million units – Source: CAAM

The current state of the Android ecosystem

If you are about to launch a new app or service for mobile devices, doing that for Android is kind of a double-edged sword. On the one hand, you can access a vast community of users based on the sheer number of Android installations world-wide. On the other hand, this massive amount of users are not running a homogeneous Android base or devices. Vast differences in performance, screen size, installed Android version, and more,  makes it extremely difficult for developers to fully exploit the potential of the platform.

In addition, there is always a latent security risk of having devices running old and outdated versions of Android. A very prominent – and extremely severe – example has just happened with the Stagefright bug, allowing an attacker to get control of the Android device by simply sending a multimedia text message to the target. This vulnerability concerns millions of Android devices in the market, which haven’t received an appropriate security update. However, due to the nature of the Android update process – an update is developed by Google and given to the handset manufacturers and to the telecom providers, which have to roll the update out to the users – this security update either has not happened, or even is not going to happen at all.

Analysts from opensignal have created an extremely interesting overview map of the current state of Android fragmentation by devices, OS version, and brands, based on data of 682,000 devices worldwide. The first chart below show the over 24,000 distinct device types of the study. The second chart show the differences between iOS and Android, and the fragmented state of OS versions developers for the platform have to consider – from both application/service and data security point of view.

 

Android Device Fragmentation - opensignal.com

Android Device Fragmentation – opensignal.com

 

Comparison with iOS - opensignal.com

Comparison with iOS – opensignal.com

Ride-Hailing Service Didi Kuaidi to Get Backing From China Investment Corp. CIC

The Chinese Uber competitor Didi Kuaidi is ramping up the valuation game with a prominent invest from China’s sovereign-wealth fund CIC. Didi Kuaidi, which was formed by the USD$6 billion merger of the two competing taxi-hailing apps, Kuaidi Dache and Didi Dache, in February has now reached a valuation of USD$15 billion.

While this might be still small compared to Uber’s current boasting USD$50 billion valuation, the potential mid- and long-term implications for Uber in China are interesting. Didi Kuaidi claims to control around 80% of the market, on both taxi hailing as well as premium / limousine booking.

With government-close CIC as investor – and the respective ‘guanxi’ with the authorities, and the close roots to the existing taxi industry, Didi Kuaidi might be much better suited to further establish its presence and dominate the market for ride-hailing. The model of Didi Kuaidi’s operation – going hand in hand with existing providers and offering additional services on top – fundamentally differs from Uber’s ‘let’s disrupt the taxi industry” approach.

Jean Liu – president of Didi Kuaidi – made this point very clear in her talk with the Wallstreet Journal:

 

“We have a unique business model. We provide a comprehensive range of products. We are trying to serve every Chinese in every situation. (…) Our philosophy is we don’t really believe in disruptive termination. When it concerns millions of people’s jobs, and when it concerns tens of millions of people’s life, what we believe in is collaborative reform from within. We try to work with everyone.”
Jean Liu – President Didi Kuaidi

G is for Google, A is for Alphabet

Google has announced major restructuring of their company structure. The new holding company Alphabet will be the parent company to the different Google businesses, including Google itself. Larry Page will run Alphabet as CEO, with his partner Sergey Brin as President. They will have a “strong CEO who runs each business” under Alphabet, most notably Sundar Pichai as CEO of the Google business.

 

Alphabet is mostly a collection of companies. The largest of which, of course, is Google. This newer Google is a bit slimmed down, with the companies that are pretty far afield of our main Internet products contained in Alphabet instead. What do we mean by far afield? Good examples are our health efforts: Life Sciences (that works on the glucose-sensing contact lens), and Calico (focused on longevity). Fundamentally, we believe this allows us more management scale, as we can run things independently that aren’t very related. Alphabet is about businesses prospering through strong leaders and independence.
Official Google Blog: G is for Google

 

From startup to fully corporate mode with individual business units under an umbrella holding, Google has come a long way. They will have the common funding and resource allocation, combined with a greater independence of unrelated businesses for more flexibility. It will be interesting to see what will be added to the Alphabet umbrella in the future.

Inside the failure of Google+

Mashable reports on the current state of Google’s Facebook “Killer” Google+. Four years after the launch in June 2011 it is unclear what the future will bring for Google’s Social Network. The situation makes it obvious that without key differentiation it is pretty tough to establish a new product – even for giants like Google.

 

“When it launched we were like, ‘This looks just like Facebook. What was the big deal? It’s just a social network,'” a former Google employee not on the team recalls thinking after seeing the product for the first time. Says another Google exec who did work on the team: “All this fanfare and then we developed something that in the end was quite ordinary.”
Inside the sad, expensive failure of Google+

 

With Bradley Horowitz as its new executive manager, the service will now very likely to see further changes.  In a blog post – suitably titled ‘Everything in its right place‘ Horowitz indicates that not everything will be at its place for long. Google+ profile will not be needed anymore to access Google services, and core elements of Google+ seem to get carved out into own applications.
Horowitz’ title as “VP of Streams, Photos, and Sharing” seem to indicate already that we might see very distinct individual products instead of an overall Google+ service.

 

At the same time, we’ll also move some features that aren’t essential to an interest-based social experience out of Google+. For example, many elements of Google+ Photos have been moved into the new Google Photos app, and we’re well underway putting location sharing into Hangouts and other apps, where it really belongs. We think changes like these will lead to a more focused, more useful, more engaging Google+.
Everything in its right place

 

IBM and Apple – from Rivals to Partners

Who would have thought some years ago that the that employees and managers on both Apple’s and IBM’s side ever understand each other, or even worked together on a significant scale. From extensive app collaboration announced in 2014, to a newly announced service offering that should help corporate clients to roll-out Apple hardware in their companies, it has really come a long since Steve Jobs flipped the bird at IBM in 1983.

For their new corporate program IBM even sent their VP ‘Workplace as a Service’ – Fletcher Previn – to Apple for training and ‘immersion’. Previn was able to witness how Apple is “able to manage large numbers of people with far fewer resources than you would see in a traditional PC environment”, and “was amazed by the smooth experience Apple had built for its own people”.

This is a very open statement from an IBM guy, especially considered that IBM should have exactly that know how and skill set for corporate clients even more than Apple does. Apple gets more and more traction in the corporate environment, though, and it is a smart move for IBM to learn from companies like Apple how to stay agile and nimble in the changing environment.

 

Steve Jobs flips finger at IBM

Steve Jobs flips the bird at IBM