Big Technology Podcast - Self-Driving's Breakout Moment — With Kyle Vogt

Episode Date: August 16, 2023

Kyle Vogt is the CEO of Cruise, a self-driving car operator owned mostly by General Motors. He joins Big Technology Podcast to discuss self-driving's rapid expansion, explaining why the technology is hitting an inflection point and how quickly these cars are filling the roads. Tune in for a conversation filled with real data and direct analysis of what might be one of the most meaningful technologies developed in our lifetime. --- Enjoying Big Technology Podcast? Please rate us five stars ⭐⭐⭐⭐⭐ in your podcast app of choice. For weekly updates on the show, sign up for the pod newsletter on LinkedIn: https://www.linkedin.com/newsletters/6901970121829801984/ Questions? Feedback? Write to: [e-mail]

The CEO of Cruise comes on to talk about its rapidly expanding self-driving car efforts and how quickly autonomous driving can take hold. That and more coming up right after this. LinkedIn Presents. Welcome to Big Technology Podcast, a show for cool-headed, nuanced conversation of the tech world and beyond. I've been tooling around San Francisco and self-driving cars for the past couple weeks, and I can't wait to talk to you about the experience and bringing on someone who can tell us just how quickly this stuff is going to make its way into cities across the U.S. and the world.

We're joined today by Kyle Vote. He is the CEO of Cruz. Kyle, so great to meet you, so great to have you here. Thanks for coming on the show. Honored to be here. Thanks, Alex. So let me just start by saying my observation after trying this stuff out is that it really feels like we're at an inflection point with self-driving. I was a tech reporter in San Francisco, 2015, 2016, when everyone said this stuff is right around the corner and it's just taken a little bit longer than expected.

But it does feel like this is a moment where this is starting to really take hold and go mainstream in a way that I think is really underappreciated. I think you had a stat on LinkedIn that you're increasing your eyes like 49% every month. So just tell me a little bit about whether I'm right about that observation. and if so, why? You are. I mean, you see it in all the announcements we put out and in the growing size of the fleet and the number of people who have written in AVs.

But taking a step back, the reason for that, and for context, I've been working on this at Cruise 10 years now, so a full decade. Why are we just now seeing this? The answer is this isn't a product you can put out if it's like halfway there or partially there. There's no like launching early kind of thing. We set the bar, you know,

the safety bar really high inside of crews. And we wanted to be convinced that by deploying this service, we're going to have a positive impact on day one in terms of road safety and benefits to society. And so, you know, it took the very first prototype self-driving cars. They maybe go around a couple blocks. So if you've tried driver assistance systems, they feel like they work. But that's the difference between, you know, working 99% of the time or 99.999, however

many nines you think is appropriate. And that, you know, those extra nines or liability are, what take the majority of the work, that's polishing the technology, making sure the safety performance is good, making sure the rides are comfortable, and then also making sure we have systems in place to handle with the reality of operating vehicles on public roads. So it's interacting with first responders, detecting and pulling over for emergency vehicles, handling pop-up construction zones. There's a really long list of stuff you have to do to even reach the baseline performance of a human driver. But once you do, the floodgates are open.

Once you've reached that point at which, you know, you outperform humans and aggregate on a safety basis, at least with regards to collisions as we've measured, and you feel like you're able to provide a service, then the constraints become very different. It's no longer this science and technology problem. It's how do we scale? How do we build more infrastructure? How do we manufacture more cars? And we finally, after 10 years, reached that point. So would you say the floodgates are open now? They are.

At this point, well, I shouldn't say completely open. And they're open in ways where we can launch in, you know, some cities of the U.S. in some areas. So we put limits on our technology today, things like top speed, the weather that it will operate in. And those are tightly validated and controlled, you know, the ability to manage our fleet within those constraints. But that actually opens up a lot of cities in the U.S. where we can operate a reasonably sized fleet. And as new technologies and improvements come along, like the ability to operate at higher speeds or in tougher weather, that will just further open up the areas in which you'll see these vehicles operate. So can you describe a little bit like the magnitude of what we're seeing?

I mean, I quoted one of the stats that you had shared, 49% increase in rides month over month. But like, can you give our listeners just a sense as to like, because like it's one thing to say like the magnitude is increasing, but like I'd love to hear like any context you can share around that. So, you know, we have number of rides, but like number of cars, whatever stats or or number of cities like talk a little bit. about like what this inflection point looks like on your end?

Well, it is growing exponentially. Like, you know, from an engineering standpoint, I like to think in terms of orders of magnitude. So each time you 10x the scale, you know, you've got some new technologies you need to build or new systems to handle that increase in load and volume. So for context, last year we're operating tens of AVs. We're currently operating hundreds, you know, almost 400 concurrently at peak. Next year, it'll be thousands. and then it'll kind of continue at least 10x growth every year for their foreseeable future.

So that's a big increase, you know, if you're just to plot that curve, but it's still relatively modest compared to the number of, you know, total vehicles in ride share or the total vehicles, you know, operated on the road in the U.S. today. And our goal, look, if you can put a self-driving mile out there that's safer, it's cleaner because it's, you know, powered by, you know, electricity instead of combustion engine, and probably more fun and more convenient for people. We should be doing that for as many miles as we can. So it'll start with kind of this robo-taxie market

and then expand eventually into personal vehicle ownership. Okay, I definitely want to get into that. And also I see 10,000 driverless rides per week. So talk a little bit about the scale. Like, what was that at the beginning of the year? I don't know off the top of my head, like on a per weekly basis, maybe hundreds or maybe 1,000 or 2,000. Wow.

So it's already 10x just from the beginning of this year. Yeah, it has. And that's driven by a number of factors. Obviously, we started by operating our AVs, you know, late at night and overnight and early in the morning. And there just aren't that many people that want to take rides at that time. But that is the least risky environment to start in. And so we wanted to gain confidence and make sure everything operated as we expected

it to before expanding into the daytime hours. But you take the same set of AVs. If they're only available in the middle of the night and then you make them available during the daytime, just that same number of AVs is going to see you 10 times as many rides. Right. And I think we should talk a little bit about what the experience is like, because there's going to be some listeners who've actually been in these self-driving cars, but it's actually very tough to grasp unless you've actually written it before. And I think it's worth like reflecting a little bit about what this is actually like. One of my first observations here

is just the progression is so interesting where you first get in, you're a little bit nervous, you're a little bit shocked that this thing has happened. Then the second ride that you take, it feels a little bit routine. Then the third ride you take, it's almost as if you're not paying attention to the fact. Like, it becomes normal so fast by the third ride. And I think by the fourth ride for me, it's just like, I don't ever want to drive any other way. The ride feels safe. It's private.

You know, you know exactly where the car is. You can't get into a fight with the robot. Not like I often fight with the drivers I'm with. but like it's just there's something about it that it's just it really catches on and seems like it makes sense so quickly so am i do you think i'm capturing it right i mean i think i'm saying a lot of nice things about like what this experience is like but it's for a reason like it's it feels safe and smooth and easy and i don't know it's like and like the future yeah well look i'll start by being humble and saying you know we still have some percentage of rides where the a

we'll do something awkward, like pause a little longer than it should in front of a construction zone or whatever it may be. But, you know, in addition to each individual's personal journey, where you're going from skeptic to, you know, okay, this is interesting to how could I ever live without this? That is a very common journey that all our users go on. But the other thing to keep in mind is that the rate at which these systems are improving is extraordinary. You know, we push out software updates to the fleet every two to four weeks. and each one of those has substantial improvements across, you know, various areas of the product, whether it's the pickup and drop-offs or the routing or the smoothness of the driving,

those are getting continuously better. And so your experience now versus six months ago would have been very different. And like now, you know, several months in the future, it's going to feel like a, you know, a much more confident experienced driver even than what you've seen today. So, you know, we're excited about that. I think it's, you know, there will be public perception will always lag the true of this technology because it's moving so fast by the time you know people develop a consensus opinion it's already out of date and i think that's i think that's kind of fun because people will

constantly be surprised by the difference in the actual rides versus you know their perception based on on what they see or hear from others yeah and i mean i do i use ride share and also drive myself and i think it's interesting because on the ride share front like if you drive I've been using these cars in San Francisco. And if you drive in an Uber or a lift in San Francisco, these are tough roads. You go up and down and, you know, there's curves. You tend to get nauseous, I think, by the time you finish your ride. There's a lot of stop signs.

It's just tough roads to drive on, but the roads, the roads with an autonomous vehicle feel much smoother. So you talk about, like, these cars understand how to drive more smoothly. Then there's, like, when you drive on your own, you know, there's this constant, And no, anyone who tells you they're not distracted while driving right now is, you know, either it's some sort of saint or lying because there's always this stuff pinging at you. And to be able to drive without, you know, without any of those forces impeding on you is pretty wild. I think it makes, I mean, it's common sense that, you know, a machine is going to do a better driving than a human when you would eliminate all the distraction, you know, assuming it's a decent driver otherwise. But let's talk about, you know, ride share. You mentioned that I think we will look back at, you know, right now is kind of like a flawed social experiment, you know, gone wrong with, with human driven ride share. You know, and there's so many reasons for that.

One is, you know, we hear from women who ride and cruise all the time, especially at night. That is so refreshing to get into a car and not have to worry about getting into the car with a complete stranger late at night, you know, and be worried about what their intentions are. And that's not all ride-shale drivers, but it's certainly some. And that peace of mind, that's something that we should have never introduced in the first place, this horrible anxiety of stepping, you know, into a car. And you mentioned the smoothness of the ride. So we did some research on this. And the cruise avies are tuned very carefully to minimize motion sickness. And how you do that is, you know, there's acceleration of the vehicle.

The derivative of acceleration is called jerk. And like there is a very narrow window of jerk, I guess, settings that you could think of where you minimize the forward and backward motion of the human body sitting in a vehicle. And we tune for that. And so you can, like if you're in a ride chair driver or even driving your own car or a passenger in a human driven car and you're staring at your phone or on your laptop in that car, you're almost certainly going to get motion sickness. But I found, you know, I ride in Coup's cars all the time, I can stare at my phone and do work emails and actually be productive in a car without having to worry about getting sick.

And that's not an accident that is by design. Yeah, and the cruise makes you, I mean, it's so smooth. You don't even feel like buckling your seatbelt and cruise won't start until you buckle. But it is. That's just for people listening in. That's sort of how these rides operate. And, you know, I know I sound like I'm gushing here, but really that it's just like how the technology operates. So I feel like, you know, this show, we'll talk about things when they're bad and we'll talk about things when they're good and we're not like found to like the skeptical or the or the booster angle. And this is certainly like the truth of the matter. You mentioned so we're talking about ride sharing. First of all, these, you know, I've used the cruise app. I've used Waymo app. You call the car. It comes to you, it drops you off. Where it doesn't seem like like Uber or Lyft really have a future at all if we move to this future. Like,

You know, initially the way that Lyft talked to me about this a few years ago, and we just had David Risher on the show, the CEO of Lyft, so, you know, folks can, I guess was just like ride hail and self-driving car month on the show. But, you know, the way that they used to say, they would be the networks on top of the technology, and you would effectively use those ride-hailing apps, which have mapped out the cities and routes so well to be able to get your cars and get to where you need to go. but right now with the cruise app or the Waymo app, it's becoming very clear very quickly that that stuff is unnecessary.

So what's your reaction to that? Is this something that replaces those apps? I mean, at this point, it's hard to say. There's a lot of nuance and complexity in existing ride-hilling apps and services. I think the consensus view on how the industry would evolve over the last few years has evolved. Like originally there, at one point there were like 60 companies in the state of California at testing A.Vs. And so the view was that, you know, maybe half of those or a third of those will start shipping robo-taxies. And you'll have 30 different robo-taxies, just like there's 30

different, you know, brands of cars, you know, often sold in the U.S. And then something like, you know, a ride share app would be this nice way to have one interface to all of those. What has actually happened is this problem has turned out to be way more complicated to get to do right. We more expensive, way more time-consuming. And the, the, the field has thinned down to, you know, one or two or maybe three players. And at this point, I think, you know, that assumption that you need an app to sort of like fan out to all the different types of robo-taxies is less of a, less of a guarantee. And so I think it remains to be seen, you know, whether A.B companies and retro companies end up partnering or mixing and matching

together to form alliances and whatnot. But I certainly think it's, there are more options now. And, you know, Cruz obviously has a standalone app today because we think there are benefits to iterating really quickly on that app experience simultaneously with in-car experience. So we can give the customer the best ride possible and not have to sort of translate that experience through a third-party ride-share app. But we'll see. We'll see how that evolves in the future. So could you envision a future where you would partner with a Lyft or an Uber and just make

these cars available through those apps? Well, I would say nothing is off the table, but it would have to make sense for both parties and ultimately for customers. Speaking of Lyft and Uber, so I guess this is going to be the last. of the ride-sharing questions for you. But I've been emailing with the ride-share guy, Harry Campbell, and he had a question that he wanted to ask about this. He says, explain the economics of how a cruise vehicle with technology, R&D, etc,

will ever be cheaper than a human driver who gets paid $20 an hour to use their own car. Like, what is the break-even point? Because I'm not seeing it. I mean, I think that's a good question. What's your perspective? Well, I mean, I would flip it around. I would say, why wouldn't a vehicle where basically the dominant cost is just the fuel or electricity, you know, once you're amortized the technical costs, like, you know, versus paying an entire human livable wage, which is going to go up over time, I think, as society demands, you know, higher minimum wage and other things. And so that's going in the wrong direction.

like it's going to increase over time, I think, the human wage, whereas the cost of the technology is dropping dramatically, both on a upfront cost, as in the cost to manufacture the vehicle with all the technology, but also on the operating costs per mile. So the overhead we pay to monitor these vehicles, to develop software for them. All of that basically gets way cheaper on a per vehicle basis as you add more vehicles. So the unit economics aren't great at hundreds of vehicles. They start to get pretty interesting at thousands. And then, you know, above that, the advantage versus a human ride share driver is pretty dramatic, actually. And that's, that's both, again, due to decrease in operating costs, but also we have two

generations of newer AV sensors and compute technology and develop in development, that each one of those has a huge drop in the cost of, you know, the sensors and compute to the point where it doesn't really add that much to the cost of the vehicle, you know, a few years out. Right now, you're, you're, you're, cars are full self-driving. There's another company that talks about full self-driving, and that's Tesla. You mentioned there's one, two, three companies. I mean, two, I can think of right off the bat is you and Google with Waymo. But Tesla is an interesting case because, okay, their full self-driving isn't exactly full self-driving, but they have more cars driving more miles autonomously than I think

anybody. So how do you view their effort? Well, I think that's a common misconception. And I think one that has been played up quite a bit to sell more cars, frankly. And that, you know, I understand why that is. But there's a huge distinction between a driverless car, as in you can sit in the back seat or can go pick you up without anyone inside or pick up your kids from school or whatever it is. And one where you have to sit behind the wheel and you're constantly monitoring and ready to take over at a moment's notice in this like high alert mode. And so I describe it as, look, either the car works for you. That's a robo taxi. That's driverless car. Or you, work for the car. That's what you're doing when you're sitting behind the wheel of...

Yeah, but you don't think that training, that that's helping to train the Tesla to the point where they could actually be fully autonomous? Well, look, if data was the only constraint to making a driverless car, I think there would be a lot more driverless cars out there than there are. It's a lot more than data. Like, Cruise is not data starved, even with, you know, hundreds of vehicles on the road. We've got, we're drowning in data. It's really the ability to turn that data in insights and drive improvements to the product. And, you know, a strategy we took early on is we start with well-equipped vehicles. They actually have all the redundancy in telecommunications, the three different modalities of sensors, all those things, so that we could solve the technical problems

first, which is the hardest thing to do. And we've done that, at least in, you know, in our early days. And then the easier part is then driving down the cost once you have a working functioning system because you can go in and optimize all the pieces that turned out to be overbuilt versus what you know you now need. But again, there's no, there's no parallel. They're not the same thing, like a system that's driver assistance where you have to take control versus one where you have cars driving around without a driver. And that really doesn't come to light until you actually try to do it and realize you need

all these degraded states. Like if you have a malfunction, right now, if a camera gets covered up on a car, driver assistance systems, it just turns off. If you have a robot taxi driving down the street and a sensor gets blocked, it has to detect that, use its other sensors, pull over to the side of the road safely. And then you may have situations where there's, you know, remote assistance needed to figure out what to do with that car. You don't just want to leave it blocking the street. There's so many nuances to going from driver assist to driverless that it's quite silly to me to even put those in the same sentence. Okay. Well, glad that we could clear that up. Speaking of companies,

I mean, look, we got to talk about it, right? So there's one more company that we have to talk about in terms of ones that could end up in that hierarchy, which is Apple. No one seems to talk about their self-driving efforts. I'm sure you're more queued into what they're doing than most. Do you view them as legitimate competitor in this space? Well, they're pretty secretive. I actually don't have any, you know, inside intel on that. But what I would say is that, you know, Apple has a history of entering industries late, but with a really compelling and oftentimes better product.

And so I wouldn't put it that past them. But I will say that unlike a consumer device, which you can test really well behind closed doors, you know, building driverless AVs is very interactive. You have all these feedback mechanisms between, you know, how AVs react with other users on the road, training first responders to interact with vehicles, working with local governments. It's very hard to just show up on day one and drop driverless AVs everywhere. I think it does take a measured and deliberate approach to scaling. that's very collaborative, working with regulators and local state and federal government. And so I think there's a long path ahead for anyone else wanting to enter the market beyond Cruise and maybe a couple others that are already doing that.

And my understanding is that they've, I mean, they've been working on this project for a long time. It has been, had a lot of fun names like Project Titan, but inside the company, they've, they've culturally struggled to build it. Their iPhone strategy of, you know, figure out what the hardware looks like and then build the software inside. it doesn't really work for self-driving cars. Like, you can't bury the sensor. Like, you know, the cruise vehicles, they've got the sensors and the cameras on top.

And if Apple wants to make it look sleek and, you know, potentially risk some of the data collection because of the look, then that's what's held them back in the past from the reporting that I've done. Well, you know, it takes about four years to, you know, go through the automotive development cycle. And so what you see on the road with cruise robo-taxies was four years ago technology. The stuff we're developing now, you know, is a lot more. more sleek and integrated for future vehicles. But, you know, I guess with the company like Apple, the fear is that Cruise gets disrupted. Like, there's an iPhone moment when they drop something new. So what we tried to do is disrupt ourselves. And we have our own iPhone moment coming with the cruise origin, which is our six-seater vehicle with seats that face each other. There's no

driver's seat. There's no steering wheel. It feels like, you know, your own little, like, party box on wheels. You've got lighting and screens and sound systems and all that. It's pretty cool. And I think that will be the moment at people realize that a driverless car is not just a car without the driver. It's actually a totally new mode of transportation. And the origin is out in Austin at this point? Like, what's the expansion? I think on public roads currently in Austin and actually also in San Francisco. And then it's in San Francisco now. Not every day, but we are doing testing on public roads in San Francisco. Yes. And you'll see that that ramp up quite a bit later this year. Can't announce too much right now. But I think it's fair to say we're putting the finishing

touches on that vehicle. And it's going to be very awesome. Now the origin, so the origin basically looks like this pod, really right out of science fiction movies, two benches facing each other. Is that something that you're going to have one person ride in or is your vision for it to be ride share? Well, so talk about another social experiment going wrong. Pooled rides for human driven ride share is totally awkward. You see. sit in the backseat of like, you know, a Toyota Camry shoulder to shoulder with someone you've never met. And it can be pretty jarring, pretty uncomfortable. And you do that to save a couple bucks, you know, on your fare. With the origin, the seats that face it, first of all, they're facing

each other. So there's no worry about like someone sitting behind you and you can't see what they're doing. That was something we heard loud and clear from customers when we sell you this. And then if you're sitting opposite each other, there's more like leg room than a like a first class airline seat. So you can, you have plenty of space to be physically distant from someone else, even though you're sharing the same vehicle, which I think will make, uh, will fix a lot of the flaws that were in pooled rides or shared rides, um, you know, in the first generation of that. And so as a result, I think you'll see, um, increased engagement of that, which helps with throughput, lowers congestion, all these good secondary benefits, not to mention lower cost rides to consumers, um, you know,

for this vehicle. So it's designed with that in mind. Kyle Vote is with us. He's the CEO of Cruz. We're going to talk a little bit more about how Cruz expands into a specific city, looking specifically at the example of Los Angeles when we come back right after this. Hey, everyone. Let me tell you about The Hustle Daily Show, a podcast filled with business, tech news, and original stories to keep you in the loop on what's trending. More than 2 million professionals read The Hustle's daily email for its irreverent and informative takes on business and tech news. Now they have a daily podcast called the Hustle Daily Show. show where their team of writers break down the biggest business headlines in 15 minutes or less and explain why you should care about them. So search for The Hustled Daily Show and your favorite podcast app like the one you're using right now. And we're back here on Big Technology podcast with Kyle Vote. He's the CEO of Cruise. As we record this, Cruise is about to expand

into Los Angeles. Kyle, can you talk a little bit about like the thought process that because L.A. is obviously high, you know, very much. And by the way, listeners, when you listen to this, the expansion is already going to be underway. We were just recording a couple days before. But when you expand to a city like L.A., driver heavy, you know, massive, what are some of the considerations that go into that? Yeah. I mean, we're super excited. Los Angeles is a huge market, a place where I think a lot of people drive their own cars everywhere. And so the idea that you'll have another mode of transportation that's convenient and safe and just, you know, gets you there every time. I think it's going to be amazing. And so,

you know, it has all of the company's energy a couple years ago was just on improving, you know, the performance basically of a single type of vehicle running a small number of them in a single city. And once we felt like we had line of sight to large-scale operations in San Francisco, we had to totally reorient how the company worked to set it up to scale to multiple cities. And so that was setting up, you know, teams that can go out and scout on the ground and basically identify any differences about, you know, Los Angeles that are unique compared to San Francisco, Dallas, Houston, Austin, all the other places we're in. And then we send out testing vehicles and we have a whole playbook now for basically safely validating that the AVs are ready for a city and then slowly ramping up operations and sort of matching riders to the supply of vehicles as we increase it. And so you're going to see that same playbook, which we've now done in Phoenix and Austin and many other cities on the way now, happen in Los Angeles. So at this point, you know, there are fewer surprises when we move to new cities.

And I feel like a city like Los Angeles, you know, the stakes are high. It's a tough environment as well for traffic and other reasons. And so, you know, at this point, we'll have done this process, you know, five or six times and really had a chance to do it really well before we roll into Los Angeles. Are you going to be in all neighborhoods in LA? No, we'll probably start off in, you know, a few neighborhoods and then ramp up over time. Our vehicles won't be on the highway right now, which I think is good. We don't, you know, contribute to highway traffic. But for people moving around, you know, within a city, you know,

or going from one city to the other and don't need to take the freeway, it'll be a really great option. Can you name a few of the neighborhoods that you're anticipating you're going to start with? Not yet. We'll see. That might be in the announcement as we put it out. But, you know, it'll be, I guess, the places you would expect. I'll leave it at that. Okay. I'm going to just guess Venice, Santa Monica,

those type of areas. I put my face on and not give anything away. Yeah. Okay. Let's see. So this is kind of one of the things that I thought about when I started getting in these cars for the first time in SF was like, wow, they can handle the San Francisco Road. If they can do this, they can do anything. And I'd love to hear from your perspective, like, you know, how much is it that they've just learned San Francisco in particular, I think you got to this, or that they've learned, like, how to drive and can, and, and those skills are applicable elsewhere. Yeah, so we'll break it down into two things, like sort of the, I guess, road layout and traffic infrastructure, like traffic lights and other things. Those, those vary slightly from city to city,

like in Austin, there's horizontal traffic lights, which we don't see in San Francisco and some local differences like that that take a little bit of work to adapt to. But I think the part that we were more concerned about initially, or at least just wanted to validate, was that the driving behavior we had seen in San Francisco and the pedestrian behavior and the cyclist behavior, does that translate well to other cities? And the answer is it mostly does. Out of the gate, you take a system that's designed to operate safely in San Francisco and put it in Austin or Phoenix, and it performs extremely well. Now, there are some local differences that are related to, you know, the width of the roads

or how people, you know, some of these more unique per city situations. And so we have a process by which we very quickly, when we have basically ways when the avies drive around, if they see something unusual or something that doesn't match what they expect, they can log it, transmit it back to our, you know, data centers. They do that autonomously? Yeah, we retrain on our own X to adapt to the new things there. but it's it's aggregate so what we see in austin and phoenix gets added to what we see in san francisco and so by the time we go to a city after that the the chances that there's something truly

unique are much much smaller and at that point the abe has a pretty good ability to adapt things that you know it hasn't seen exactly before it may not perform exactly like a human would but it's still going to be safe and pretty comfortable and and we continue to fine tune that but in the explanation for this is that even though you know there's a maybe the distribution of driving behavior in one city is different, maybe San Francisco has a driving personality that's different than Boston or New York or Portland, within that distribution,

you still see examples of Boston drivers, Portland drivers, New York drivers in San Francisco. And so it's not like the baby has never seen that. It just sees a different, you know, a distribution of drivers. And so that means that, you know, if you train in one city, it actually does port to other cities,

you know, more than you would think. you said, let's see, you said it took some work to adapt to these new cities, but most of the systems worked well as is. Can you basically drop a fleet of cars in a new city knowing like 85, 90% of what you need to know and just like have it work and retrain? Or is like what is the ramp up process there? Well, you know, we've done this a few times. So and so we're still very measured and cautious in how we do it. So we start by putting a fleet of vehicles that have humans behind the wheel. ready to take over. And that is kind of our, our, you know, last check that we do, well, as part of our many validation efforts to ensure that, you know, even though we've done simulation, even though we've, you know, validated the system in one city and collected data in another city, we want to make sure when we put it all together, it performs as expected. And so that is, you know, a last sort of

safety net to catch any surprising differences before we actually take the drivers out of the car. But even when we get to that point, the probability of seeing something new, we're having, you know, we call it like a test escape, like something, something where the AV doesn't perform as intended is extremely small. And we basically don't see many of those anymore. So in other words, yes, you know, we could take the system and drop it into a new city blind, but we don't do that because we're very cautious and measured in how we deploy. But it seems like you're taking less and less, it takes less of a lift to deploy in a new city for each time you do it. I mean, you've gone from what one to seven cities? this year and what are we what can we expect by the end of the year we're about to you're about to go into i think an eighth but correct me on the numbers if i'm wrong yeah we're not done uh there'll be more this year and uh you know that that's because next year we're going to be manufacturing a lot of vehicles and you know that's that's our biggest limitation to scale right now we just don't have the vehicles but we're going to be building more and um we've learned from san francisco and

other cities that um it takes time for communities to acclimate to this new mode of transportation you know the first time that people see a driverless car in their neighborhood. There's a lot of double takes and surprise and a lot of thumbs up. They're filming as you go by. A range of reactions. And so what we don't want to do is drop like, you know, thousands of cars into a city overnight and catch people off guard. And so by having lots of cities,

we can actually make a lot of vehicles and spread them out, deploy them across many places. So there's no abrupt change in any one city that would catch people off guard. We want to deploy with communities and not at them. And so part of that is making sure that you manage the rate of change and the expectations. I mean, you're sort of winking at some of like the legal and regulatory challenges you might face as you go about expanding. I mean, what is the state right now?

I mean, I think we can all, it's starting to become consensus that these vehicles are safer than human-driven cars. So maybe you can share a little bit about that in particular, about the safety aspect, and then talk a little bit about like, what are. are the regulatory hurdles that you face? And how, is that like the, I mean, outside of building cars, is that like the number two, for instance, barrier that you face in expansion? Yeah, well, I think first, it goes without saying that, you know, regulators play a really important role. This is a technology that operates on public roads. You're carrying passengers involves public

safety. It deserves a certain level of scrutiny. And I think because the data, and I'll talk about exactly what data we have in a second, is relatively fresh and recent. You know, we've only driven over, over three million miles now, almost four million. And so we have some safety performance data, but we've only published it in the last few months. And so I think regulators and, you know, communities, you know, local state and federal government needs some time to adjust to that before I think they come to the conclusion they ultimately will, which is this is clearly beneficial to our communities. And we should encourage it and be pulling it.

into our communities versus slowing it down or potentially putting up roadblocks. So we haven't reached that point yet. And I think that's fine given the recentity of the data. I expect that's where it will go. So in terms of the actual safety performance, you know, there's a lot of, you know, best practices you can follow or industry standards or other things, but that can get fairly academic and it's not very convincing to many people, especially the average person. And so what we did in San Francisco is we collected data from human drivers to start with.

So we could compare the AVs to human drivers. And we collected, you know, millions of miles across vehicles and did a study with leading transportation research institute. We actually instrumented ride share vehicles. So these drivers had, you know, their driving around vehicles covered in sensors. So we could detect any time they got into a collision, even if it wasn't reported by insurance or reported to the police, like even the most minor contact with objects or curbs or whatever it is. And so we have this data set now on how well humans drive.

And it's probably not a shocker to anyone is that they don't drive nearly as well as, you know, the government thinks or insurance companies think. There's a lot more things that go unreported. But now that we have that data set, we were able to take AVs and drive them in the same area, a very comparable environment and measure directly how often AVs were getting into crashes, especially the different levels of severity of crashes and compare them in humans. And even, you know, from our first million miles, and remember, this product is continues getting better, just from the first million. we saw a 50% reduction in any kind of crash and over a 70% reduction in the kinds of crashes that could lead to injury. So not only are the AVs getting in fewer crashes, but when they get into a crash, it's less likely to be one where there was an injury. So we have a lot of situations where an AV is sitting still at a red light and the distracted driver rear ends it. We

count that as a crash. It is a crash, even though the AV, you know, did nothing to contribute to that. Are you able to tune the model, like, or the, the setting where like, do you like have like a hidden beast mode setting where these cars just like drive fast and accept like a greater percentage chance of collision? We don't have that. I'm not sure we build that. But we are doing some interesting things like that our focus, you know, earlier on was to get the Aves to be really good at not causing collisions. But what we found in the last couple of years, if that's not good enough. We actually be a really good at avoiding bad driving by other humans. So we put up, like, for example, now if a car is reversing, uh, and about to reverse into an AV and the driver's not

paying attention, we actually honk the horn to try to get their attention. And I can't tell the number of times the driver has been like, thank you. I wasn't paying attention. Like, they send us feedback and say, thank you for honking the horn. And I otherwise would have smashed my bumper. Um, you know, and that's one, one example of many of things we're doing to help humans make fewer mistakes. Right. I'm curious about the way that consumers will pay for this. Are they going to pay like per ride or are you going to get like a subscription to cruise and just like, you know, hit a button and it shows up whenever? I don't know yet. To be honest, we're going to experiment with some things. But, you know, right now what we're seeing is that we're supply constrained. There's far more demand to

ride in these vehicles than cars available. That's why we have a wait list and other things in cities and it can be pretty long at times. And we're also seeing people report that they have a very significant preference for AVs over, you know, a human-driven ride-share vehicle. You know, as you experienced by your third or fourth ride, you're like, I want this all the time. And so that could lead to all sorts of different things on the pricing side. But what we do to expect is that, you know, demand is going to exceed supply, unfortunately, for several years on this product, just because we won't be able to build enough cars to meet,

you know, the nationwide ride share demand in the next couple of years. Right. Okay. Do you have a sense as to like when this is going to be? Yeah. I mean, do you have a target goal for like when this might overtake human driving cars? Well, you know, there are like over 200 million cars on the road today in the U.S. And it would take us a long time to build that many cars.

And so I think we're going to be in this world where human driven cars and in robo taxis and also personally owned autonomous vehicles all coexist for quite some time, just because it will take a long time to roll over the entire fleet. But what I do expect is, you know, within two or three years, most likely, I think the majority of new car sales will transition to vehicles where people don't have to drive because once you have that choice, I have a hard time believing that people are going to go to a dealership or go online or whatever and buy a car where they have to drive all the time versus one where they can choose. And I think that's going to, I think that's going to flip very quick.

Interesting. Okay. Last question for you. I just want to hear a little bit more about like the corporate structure because you've raised something like $7 billion. You have ties to GM and Honda. So, you know, can you talk a little bit like his crews like a subsidiary of these automakers? Do they just have large chunks of ownership from you? Are you like planning to like do like the traditional IPO exit route like talk a little bit about that well we're over 80 percent owned by general motors but we do have outside institutional and strategic investors we also have a separate board from general motors and so what we're trying to do there is create an alignment between general motors and crews they manufacture all our vehicles they help like design and engineer

most of the vehicles themselves and we work more on the compute and sensing technology and so you know at this point in time, we benefit greatly from this high overlap in ownership and easy ability to collaborate. But we have just enough independence that everyone at Cruise feels like they work for Cruz, first and foremost. It feels like a separate company. We take a lot of steps to make it feel like a startup so that we can get that energy, that sense of urgency and that focus on delivering results that is harder to do for innovative or unique. products inside of a larger company. So as it stands today, I think we've got the best of both worlds. We're pretty happy with the structure. Kyle, thanks so much for joining. Thank you.

All right. Thanks everybody for listening. Thank you, Nate Gwattany for handling the audio. LinkedIn for having me as part of your podcast network. And all you, the listeners, we'll see you next time on Big Technology Podcast.