Cyrus Radfar is the founding partner at V1 Worldwide.
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Two years ago, Lime was a great addition to guacamole, rather than a sidewalk. The market wasn’t sure about car sharing and whether it had long-term viability. Now, with the acquisition of Drivy, Getaround is the largest car-sharing platform with partnerships the likes of Uber and Toyota. Uber and Lyft were (and are) a phenomenon, but there were still pundits who weren’t sure if Uber would ever overcome the adversity of its culture.
At the same time, I wrote a series of four articles on the latest transport technologies, and the waves they would create with perspectives focused on the impact on retail, commercial real-estate, short-haul travel and hyperloop. Among those predictions was the impact hyperloop and autonomous vehicle technology would have on commuting, short-haul air travel and the retail industry.
Since then, these technologies have continued to develop and evolve, and it’s worthwhile to revisit assumptions and assertions. Some of the more optimistic expectations put upon them by their proponents have so far failed to be realized, and they are no closer to becoming a reality in our day-to-day lives.
This begs the question as to whether they will still become the industry disruptors many pundits, including me, suggested they would, or if expectations have become more tempered.
Both hyperloop and autonomous vehicle technology have had their ups and downs over the past two years, but they’re still set to change the way we (and the things we need) travel.
Delayed promotion to the back seat
When people think about transport innovation, we often think of self-driving cars or, maybe, flying cars.
Many believed that we’d be relegated (or promoted) to the back seat as soon as 2020. We would be sitting comfortably while fleets of autonomous cars chauffeured us along. Over the past two years the landscape has consolidated and the players are arguing what’s possible.
Driverless cars haven’t managed to achieve some of the targets that were being set for the technology two years ago. For instance, as we discussed, Tesla CEO Elon Musk claimed in 2015 that the company’s cars would be fully autonomous by 2017 — a prediction that, of course, didn’t and still hasn’t come to pass as of mid 2019. And in January this year, Nissan — one of the main proponents of autonomous vehicle technology — said “true autonomous cars will not happen within the next decade.”
But it would be overly pessimistic to suggest the technology isn’t coming at all. The progress has been incredible.
Disruptive leaps forward often result in a net gain in employment.
Ford CEO Jim Hackett said that “[w]e overestimated the arrival of autonomous vehicles,” at an April 2019 Detroit Economic Club event. Ford believes its fully driverless cars will be in commercial operation by 2021, and the technology has remained a major and consistent talking point in the media. At the annual WSJ conference, D.Live, Waymo CEO John Krafcik said that “autonomy will always have constraints,” to communicate his belief that fully autonomous Level 5 transport is not coming anytime soon.
Industry pundits like the Boston Consulting Group (BCG) would argue that Waymo is leading the pack on unlocking the promise of autonomous technology. Tesla’s founder and chief, Elon Musk, feels that Teslas will leapfrog Waymo with an upgrade in 2020 that will make more than a million cars fully autonomous. “By the middle of next year, we’ll have over a million Tesla cars on the road with full self-driving hardware, feature complete, at a reliability level that we would consider that no one needs to pay attention.” My excitement is tempered by the fact that Musk said before that Teslas would be fully autonomous by 2017. That said, I wouldn’t slight him for being audacious, as I do believe he was just being overly optimistic rather than scamming the market.
We shouldn’t forget everyone’s favorite punching bag, Uber, which entered the race in 2015 when they first partnered, then acquired, an entire Carnegie Mellon autonomy lab. Their foray into self-driving abruptly stopped after a tragic accident that killed a pedestrian in Arizona. At this point, it would seem more likely they are going to use the technology rather than develop it themselves.
Driverless cars will create more jobs than they will destroy
In my piece titled “Transport’s coming upheaval,” published in the original series on TechCrunch, I suggested that new modes of transport, such as autonomous vehicles and hyperloop, would end up creating more jobs than they would eliminate. They, coupled with improvements in remote work technologies, should contribute to lowering the cost of human capital by allowing them to comfortably move outside of urban centers to lower-cost housing.
Job loss has been one of the common themes in the discussion around the innovative transport technologies. Some reports have suggested that autonomous vehicle technology could destroy 300,000 jobs a year, and that hyperloop would have a devastating effect on the trucking industry. But as I previously posited, history shows us that, more often than not, disruptive leaps forward often result in a net gain in employment.
Take, for instance, the introduction of the personal computer in the 1970s. It initially destroyed 3.5 million jobs in total, including those in typewriter manufacturing, secretarial work and bookkeeping. But it went on to help create 19.3 million jobs, in the U.S. alone, across a wide range of industries and occupations, according to McKinsey estimates.
New transport innovations will have a similar effect, creating many new jobs. Even though driverless cars aren’t yet available for commercial purchase, there have been developments with the technology that give us a better idea as to how it will likely affect global workforces.
Rather than be a disaster for the world of work, autonomous vehicles and hyperloop could be a boon for employees.
As a whole host of companies, including Waymo, Tesla, Cruise and Ford, strive to make a breakthrough with autonomous vehicle technology, more workers are required to make the driverless car dream a reality. According to the online talent platform ZipRecruiter, the number of job listings related to driverless cars increased 27% year over year in January 2018, and the amount of job postings in the autonomous vehicle sector rose by 250% from the second quarter in 2017 to the second quarter in 2018 due to a hiring spree at the beginning of the year. Indeed, a report from Boston Consulting Group and Detroit Mobility Lab released in January estimated that self-driving and electric cars would create more than 100,000 jobs in the U.S. over the next decade.
In fact, the trucking industry seems ripe for change, and not just because of the benefits that autonomous vehicle technology would bring. There is a shortage of truck drivers in the U.S., according to CNBC. The unemployment rate fell to 3.9% percent in July of last year, meaning companies are struggling to recruit for a job that has long, demanding hours.
Drivers for both trucking and autonomous taxis won’t be irrelevant for some time. For trucking, there is a need for a human to secure the cargo and manage the many checkpoints. For taxis, if Waymo’s CEO is correct, there will still be routes where the driver may be needed, especially in high traffic cities with variability in routes, road quality, construction and traffic conditions.
As the new transport technologies are slowly introduced, they will indeed eliminate existing jobs after, first, making them much more enjoyable for the workers. But evidence suggests that those jobs will be replaced by new ones that require different experiences and levels of education. Rather than be a disaster for the world of work, autonomous vehicles and hyperloop could be a boon for employees everywhere.
What happened to hyperloop?
Two years ago, there was a ton of buzz around what Elon Musk once deemed a “fifth mode of transport.” Hyperloop — a form of terrestrial travel where pod-like vehicles travel in near-vacuum tubes at more than 700 mph — was set to be up-and-running by 2020, with plans to create routes between San Francisco and LA, and Washington and New York.
The impact of this, as I discussed in my original transport series, would be huge for commuting and real estate, and would be a devastating disruptor for short-haul air travel and some trucking routes. Even though hyperloop isn’t being talked about in the same way it was, the promising global projects are far from dead. There are still plenty of developments that suggest hyperloop could be a major form of transport in the future.
Virgin Hyperloop One is now testing empty pods along its 1,640-foot-long, 11-foot-high tube just north of Las Vegas; and in October last year, Hyperloop Transportation Technologies (HTT) unveiled its first full-scale capsules, which it believes will be passenger-ready by the end of 2019. However, many of the widely publicized Hyperloop routes — LA to San Francisco, and Washington to New York — have gone cold in recent years. As have plans to create a high-speed rail across California. In February, California Governor Gavin Newsom said that plans for the new track had been scaled back from the previous grand ambition to connect north to south, saying that, “The project, as currently planned, would cost too much and take too long.”
Efficiency isn’t the only factor that would put self-driving in good stead against airline competitors.
The financial problems the California high-speed rail track has come up against could be an ominous sign for hyperloop technology in the U.S. These types of transport systems are often vastly expensive (the California high-speed rail project was set to cost $68 billion, if completed), and there’s no guarantee they’ll return the investment. Taiwan’s high-speed rail, for instance, suffered heavy losses due to depreciation charges, interest burdens and lower-than-expected demand. And while Elon Musk claimed the LA to SF hyperloop track would cost as little as $6 billion, the SpaceX founder’s estimates have been largely rebuked, with some critics claiming the track would actually cost closer to $100 billion.
Hyperloop is becoming a commercial reality as soon as 2021, just not in the United States. HTT will be building a 10 km track to connect Abu Dhabi to Al Ain and Riyadh, Saudi Arabia. The hope is to be operational by the universal exposition, Expo 2020, on October 20th, 2020.
Clearly, hyperloop still has a lot of questions to answer if it is to fulfill the expectations placed on it, but leaving the technology by the wayside without further testing would be foolish when taking into consideration the environmental and commuting benefits hyperloop would bring. If the technology proves to be cost efficient and as effective as its proponents have previously claimed, it will still have a huge impact on how we and our cargo travel.
A new way to travel and commute
I continue to believe that self-driving technology will disrupt short-haul air travel in a massive way. Why would you go through the hassle of airport security when a terrestrial mode of transport could get you to your destination even quicker?
Efficiency isn’t the only factor that would put self-driving in good stead against airline competitors. Commuting would be easier, too. In all likelihood, traveling by car would be more comfortable and spacious than air travel, but it would also be more amenable to good Wi-Fi connection. In the two years since writing the original series on innovations in transport, in-flight Wi-Fi has improved, but it’s often costly and leaves much to be desired.
Autonomous vehicles will be the next step in brick-and-mortar retail innovation.
Volvo, for instance, released an autonomous car concept in September last year of an electric vehicle that can double up as a living room, bedroom and office. The car, named the 360c, benefits from a larger interior thanks to its lack of a bulky combustion engine and steering wheel. The 360c can be configured in four different ways, with spacious seating, a table and a fold-away bed.
This type of travel would revolutionize how we commute. Workers traveling long distances would surely choose to spend more time in a spacious, work-friendly driverless car than by air travel, if it meant they could comfortably work en route. And it’s a vision that automotive companies with an eye to autonomous vehicle technology are considering seriously.
As we’ve already seen, the claim that new transport innovations such as driverless cars and hyperloop will destroy more jobs than they’ll create is specious at best. But that doesn’t mean the technology won’t change certain roles in the sector.
Already, the role of driver in ridesharing companies is beginning to change and become more enterprising. In July last year, in-car commerce startup Cargo partnered with Uber. The deal allows drivers to sell passengers candy, cosmetics and electronics during the journey. And, according to Cargo’s estimates, drivers using its service can earn between $1,500 to $3,000 in extra income per year.
As cars become more autonomous and the form-factors evolve, it will allow the drivers to provide more services to passengers.
This type of new mobile retail could go on to sell far more than just a few select products in an Uber, though, and it may have a knock-on effect on the retail industry as a whole — an assertion I made in the original series.
Two years ago, retail was suffering badly and, in large part, that trend continues as many fail to adapt. Today, it’s still in a state of flux, with constant disruptions threatening the future of brick-and-mortar stores. Those stores that are surviving the onslaught are adapting and improving with the latest technology. For instance, many companies, such as Ikea, are using augmented and virtual reality to make the shopping experience more immersive.
The reality is that scooters, e-bikes and other modalities will continue to infiltrate our cities.
Autonomous vehicles will be the next step in brick-and-mortar retail innovation. The technology could allow fleets of stores on wheels to come to consumers on demand straight to their location. When I made the claim two years ago, it may have seemed a bit far-fetched, but since then, plenty of businesses have started utilizing the concept.
Walmart, Ford and Postmates are reportedly collaborating on a pilot program in Miami where goods will be delivered to consumers’ doors in a driverless vehicle. They aren’t the only ones exploring how to use the technology in retail. In mid-2017, Swedish company Wheelys launched Moby Mart — a fully autonomous, staffless supermarket on wheels. The service currently operates in Shanghai, China, and is available 24/7.
Consumers have shown an increasing appetite for on-demand food delivery services since I wrote the original series. Uber Eats is only three years old, but it’s already valued at $20 billion; and one of its main rival, Postmates, made more than 35 million deliveries in 2018. As autonomous vehicle technology becomes more widely adopted, more businesses will see the advantage in using it to deliver efficient services to a growing customer base.
New kids on the block
E-bikes have been a steadily growing market since the end of the 20th century, but with the help of on-demand bike sharing they’ve exploded in major cities. Meanwhile, another form of transport left the playground and moved mainstream. Scooters have long been a staple, but since 2017, they’ve changed the landscape of short city commutes.
According to a report released by the National Association of City Transportation Officials, riders took nearly 39 million trips on shared electric scooters in 2018. For the first time they surpassed e-bikes by nearly 10%.
The biggest names behind the scooter boom in the U.S. are Lime, Bird and Scoot. Ironically, their scooters are powered by inventor Dean Kamen’s technology that was at the heart of the Segway. It only took nearly two decades for his future to be realized with a slight design change.
Although I’m not clear that the scooter rental companies are as big a financial opportunity as their investors are hoping, I do believe they aren’t going anywhere. The reality is that scooters, e-bikes and other modalities will continue to infiltrate our cities as urban planners move away from designs centered around automobiles.
The future of innovation in transport
With the setbacks and failed predictions that have been made of autonomous vehicles and hyperloop technology, it would be easy to be skeptical if they will come at all. But, as is often the case with innovation and change, adoption can be slow, and there are often unforeseeable delays. However, with so many startups and major global businesses — from Waymo to Virgin — betting heavily on the future of hyperloop and autonomous vehicles, it’s surely a question of when rather than if they come to pass.
As we’ve seen, these technologies have made huge strides in the two years since I wrote the original series, and the applications of them are starting to be realized. And those applications go far beyond faster, more convenient travel. As more businesses sit up and take notice of the potential driverless cars and hyperloop have to offer, they will continue to shape the future of transport, retail, work and much more.