Marketplace - The future of self-driving cars

Episode Date: July 31, 2026

Amazon’s autonomous vehicle company, Zoox, can now roll out 2,500 of its vehicles annually in the next two years. Are more robotic cars coming, or will there be more speed bumps? But first, we’ll look at the market impact of the Fed’s decision to keep interest rates steady in our Weekly Wrap. Plus, the effect of rising health insurance costs for employers, a retiree returning to the workforce for a family business, and a look at how Boulder, Colorado is making room for the Sundance Film Festival.Every story has an economic angle. Want some in your inbox? Subscribe to our daily or weekly newsletter.Marketplace is more than a radio show. Check out our original reporting and financial literacy content at marketplace.org — and consider making an investment in our future.Read the stories in today’s episode:Weekly Wrap: Kevin Warsh's dilemma on interest ratesRising health insurance costs may take a bite out of your paycheckLeaving retirement for a new family businessAmazon's self-driving Zoox taxis are about to hit the roadsWhen a legendary film festival comes to Colorado, will homeowners open their doors?

Paying too much for wireless is just the way it is, right? Wrong. Escape to Freedom Mobile and get a plan with coast-to-coast coverage. Plus roaming in over 120 destinations starting at just $35 bucks a month. Conditions applied. Details at freedommobile.ca. On the program today, the week that was, because it's Friday, also the future of self-driving cars, and a story about retirement with a plot twist.

From American Public Media, this is Marketplace. In Portland, Oregon, I'm Rima Grace in for Kai Risdahl. It is Friday the 31st of July. Good to have you along, everyone. It has been quite a week in the economy, and we've got about seven minutes or so to sort it through it. So let's get into it. Here with me are Sudeep Ready of MS Now and Kath and Rampel with the bulwark.

Hey, you two. Hi, Rima. Okay, so of course, I've got to start with the Fed, which said on Wednesday, yeah, no, we're not raising rates. even though there was some notable dissent, a good family fight, as Warsh put it. Sudeep, what do you make of that decision? There were a lot of confusing things coming out of the Fed chair. And I think the fact that we had several dissents, three dissents was notable.

It was really just the reality that being a vague and non-committal Fed chair on inflation doesn't really work when the last three Fed chairs have been. communicating really fairly clearly and not leaving doubts with the market. Markets, there are a couple problems that Chairman Warsh has now. Markets love to test Fed chairs in their first year. They love to test their resolve and credibility and to have a Fed chair come out of a meeting like this and have all sorts of headlines about the credibility of the leader of the central bank is generally not a good thing.

The other is that he's in a bit of a bind here. that a huge driver of the inflation problem is the Trump war in Iran. And it's it's a war that on any given given day, you get three different messages between war and peace and somewhere in between. And so you don't actually know where that's going to go. And if that is a key driver of the worst of the inflation, there is continuing underlying inflation as well. But the, the ups and downs of that conversation are really bleeding into this noncommittal stance from the Fed chair. And maybe he is just trying to avoid creating ire from the person who appointed him right off the bat. And that's why he's staying noncommittal right now. But the rest of the committee is

going to have to come together and make a decision about whether they have credibility and resolve in this case. Well, what do you think, Catherine? Because, yeah, Chairman Warsh keeps saying he's serious about getting inflation back to 2%. How do you square that messaging with the Fed holding rates study again? I think that's really the challenge here. The chair was asked a couple of times by reporters during the press conference. If you are so laser focused on getting inflation under control, can you explain why you haven't raised rates yet? Because Warsh, of course, had been very critical of the Fed under his predecessor's leadership for acting too late. And Warsh, you know, couldn't really answer or didn't or chose not to answer.

One thing that's a little bit unclear to me is, you know, Warsh has said that he really admires the late chair Alan Greenspan. And Alan Greenspan was often deliberately opaque. I mean, he was quoted, I'm going to bungle the quote, but he's quoted as saying repeatedly some version of, if you think you've understood me, you've misunderstood. That he was trying to be deliberately ambiguous. and difficult to read. And it's a little bit, I have trouble parsing whether Warsh is deliberately

cultivating some sort of opacity here or if he thinks he's being clearer than he is. Certainly, the markets responded to that press conference by not necessarily believing that the Fed is going to do whatever it takes, to quote another Fed share, to get inflation under control in the near term. And that's why you saw yesterday long-term yields go up and then today kind of across the yield curve. Yield interest rates go up. Right. Well, Warsh wants the Fed to say less and listen more to what markets are telling it. But then the markets are trying to read the Fed too. So how does that not turn into one big feedback loop, Sadiab?

That is the problem. And markets are very clearly sending a message that they want the central bank to indicate resolve about inflation. And that's why we've got yields on the 30-year and at two-decade highs, almost two-decade highs now, this is going to be a problem that will become, as you say, a feedback loop with mortgage rates ticking up. That's going to depress the housing market even more. It's going to cause all sorts of other problems for the Fed. This hasn't necessarily bled into consumer spending yet. There are obviously lots of problems with gas prices that could do.

do that. But if if the market feel like the Fed chair, German, and the committee are not going to take this seriously, then they will force their hand. And bond yields going up this much, borrowing costs going up this much is going to mean a stock market that falls. That will create the consumer spending problem over time along with it. So you've got to at some point realize you have to take this head on if inflation stays this firm. So consumer sentiment ticked up this month despite inflation, despite new tariffs, despite the ongoing conflict with Iran. Catherine, how do you make sense of that? Like, are people feeling better about the economy?

Or are we just getting used to living with all this uncertainty? I think it's probably the latter. We did have a respite for a while in gas prices. So maybe it's partly that. I'd have to look at the actual survey dates, you know, because some of this is pretty sensitive to when the survey. was fielded and what were the gas prices that day and prices have gone down and they've been creeping back up again. So I think it's partly some relief there. It's partly, yeah, just getting kind of inured to the volatility. People still don't feel great about the economy, but maybe they're

getting a little bit worn down in how shocked they feel by some of the volatility that's, you know, as Sudu pointed out related to the war, related to tariffs. I mean, we haven't even mentioned the fact that tariffs are also feeding into inflation or, you know, at least one-time price increases. And Trump put in place a new round of tariffs relatively recently to replace an old round of tariffs that was expiring, which replaced a previous round of tariffs that the Supreme Court struck down. And, you know, a little over a year ago, that was a huge event when, you know, Trump put in place is Liberation Day tariffs, right? And now we're basically reconstructing that tariff wall and it gets lost in the news cycle. And I think that that tells you a little bit about,

again, how worn down consumers and just the general public are by this just kind of constant barrage of erratic policy changes. And, you know, maybe at some point, like what seemed really shocking a year ago is less shocking today. But certainly I would not say that the consumer sentiment numbers are great. They continue to be pretty dour. Sure. Yeah. Adapting to a new normal. Last question, Cedeep. We got GDP this week, too. The economy grew at one and a half percent pace. Not bad. Not amazing. But it seems like AI was doing a lot of that work. How much are we relying on the AI build out to keep this economy growing? Yeah, that's been the question for quite some time of how long can this go?

There's obviously just a huge, huge amount of spending from Silicon Valley. And that will probably continue for some time. There are lots of threats from other models overseas, Chinese models. We kind of got a shock in the stock market in the last week or two of whether this could be ending. But that is going to be, I think, the enduring. question for some time is can we be prompt up for years from this and when does the music stop? It doesn't look like it's stopping anytime immediately, but it could be. Sadipe Reddy with MS Now and Catherine Rampel with the bulwark. Thanks you too. Have a good

weekend. Thanks, Rima. Thanks, Rima. Wall Street today, Greens Across the Board. We'll have the details when we do the numbers. As the finale to a big week of economic data, we got one. more number today, the employment cost index from the Bureau of Labor Statistics. In other words, what it costs employers to pay their workers. And it shows that this spring, the cost of employee benefits was up 3.8% from a year earlier. That's a faster rate of growth than wages, which were up only 3.2%. One thing that's pushing up those benefit costs? What employers are forking over for health insurance? Marketplace's Stephanie Hughes looked into it. Health insurance costs for employers

have been growing at a rate we haven't really seen since 2005. So then that makes you, of course, want to say, well, why is this going on? Erica Groshen is a former commissioner of the U.S. Bureau of Labor Statistics. She's now with Cornell. And she says there are a bunch of reasons why. One is there's been a lot of innovation in health care. We have new drugs, and new drugs tend to be more expensive than old drugs. Think GLP1 inhibitors, new treatments for cancer.

Grosin says these drugs could make workers healthier in the long term, but right now they're driving insurance costs up. Another factor, rising wages for people who work in health care. Some of this is due to actually declining immigration because we get a lot of nurses, health aides, and doctors from overseas. Also, we have an aging workforce, and older people generally use more health care. So what's a cost-addled employer to do? Groschen says some might hold off on hiring to keep costs down. Others could choose to raise prices. Well, you know, this is a reason why we might have to increase the cost for our goods and services, whatever we're selling.

Or the bad news might be for the workers. Economist Guy Berger is with the Burning Glass Institute. You know, your boss will tell you, sorry you're raising not as big as it would have been because I had to channel more of that money that I pay you over to rising health insurance costs. A survey from the benefits consulting firm Mercer shows that last year, on average, paying for health insurance cost employers about $17,500 for each worker on a company's sponsored plan. Sunit Patel is Chief Actuary for U.S. Health with Mercer. Health care costs are the biggest component of benefits for most companies. He says some employers are trying to nudge workers towards certain providers to save on those

costs. It could be that the provider directory you see is going to prioritize those physicians, hospitals that they think are better quality and lower cost. Or offer a better deal for a particular provider. You can go to Dr. A, who has a $20 copay or Dr. B who has a $50 copay. Either way, Patel expects these high health care costs to stick around until at least next year. I'm Stephanie Hughes for Marketplace. By the way, if you want more stories like this about the complicated ways work and money shape our lives,

check out the Marketplace podcast that I host. It's called This Is Uncomfortable. You can find it wherever you get your podcasts. When it's finally time to retire, the idea is you're finally done with work for good, right? But a survey out earlier this year from AARP found that last winter about 7% of retirees, quote-unquote, unretired. Now, there are a lot of reasons someone might go back to the workforce. Maybe they need the money. But for some people, it's not that they have to.

They just want to. Which leads me to Irene Kesselman. She's the former owner of Alley Cat Toys in Carborough, North Carolina. She was actually one of our retail regulars for years before retiring in 2024. But now, she's back with a new chapter. So we called her up. When I initially started my retirement venture, I think everything in my life changed from the way I have my coffee in the morning to how long I perhaps stay in bed. instead of having been up at the crack of dawn and looking at emails.

But I think through it all, I am finding that I still have some energy and some desire to do some kind of creative work. Through the years, I've had people mention to me or suggest that I should, in fact, consider mentoring or consulting. And that kind of stuck in my mind. my daughter-in-law had wanted to pursue a new opportunity. We started talking and she asked if I would mentor her and I agreed to do so. The name of the store is Woodson's Toy and Baby and it will be opening on Main Street in Belmont, North Carolina. We don't want to pinpoint a date. We're hoping to open the end of August. From the minute she signed the lease, she's has been out buying shelving. We're also working with the reps and they're helping us to know

what has been new in the last couple of years. And we are staying up till all hours of the night to make this process happen. So we're a little exhausted, we're a little stressed, but it is in fact coming together. In some cases I'm having to step back and say, you know, I think you should buy the purple and she wants to buy the green. And, you know, having to allow her to make her own decisions and learn. That's a little hard for me because I am used to taking control and doing what I do best. And, you know, she's going to do it differently. But it is fun being back into it, back into the business.

I think the part of it that I really am liking the most is seeing some of the reps whom I haven't seen in several years, the relationships. that has always been a big part for me. I am not taking any money. It's not really what I wanted to do in this particular case. This is part of my family, and I'm doing it because I care about them. And I'm also, you know, it's a great practice endeavor for me, if in fact this is something that I'd like to do in the future. Irene Kesselman, helping her daughter-in-law open a new store in Belmont, North Carolina.

lineup. Coming up. And yeah, maybe you get Tom Cruise to stay in your place and money's not a thing. That would be nice. But first, let's do the numbers. The Dow Jones added 276 points, half a percent, to finish at 52, 485. The NASDAQ gained 251 points, 1 percent, to close at 25,373. And the S&P 500 picked up 52 points, 7 tenths percent, ending at 7489. For the week, the Dow was up 1 percent. The NASDAQ The ZDak improved 1 in 6th percent, and the S&P 500 also increased 1%. Oil prices ticked up again as reports that some tankers were forced to turn around in the Strait of Hormuz. Brent crude crested $90 a barrel today while U.S. West Texas Intermediate hovered around $84 a barrel. Meanwhile, Amazon reported its biggest revenue growth in over four years late yesterday.

Investors reacted accordingly sending Amazon.com soaring 15 and 3 tenths per. In contrast, Apple, set supply constraints from the AI boom will hurt its growth. Apple withered 7.310%. Bonds fell. The yield on the 10-year T-note rose 4.71%. You're listening to Marketplace. It's Charles Barkley with Wayfair. It's outdoor season, and my patio set up, better be ready to play.

That's what Wayfair wins. Patio seating, umbrellas, and grills. All delivered, fast, and easy. Shop Wayfair.com.ca.ca. Now. Wayfair, every style, every home. This is Marketplace. I'm Rima Grace.

The future of driving may not involve much driving at all. This week, the Department of Transportation gave Amazon's autonomous vehicle company the Green Light to roll out several thousand of its cars over the next few years. Now, the administration says it's working on safety standards for self-driving cars, which can look pretty different from what we're used to. Like they don't have steering wheels or brake pedals. or really any controls for humans.

This move from the DOT could mean we'll see a lot more robot cars in the coming years. But as Marketplace's Henry Epp reports, there are still plenty of speed bumps ahead. Amazon's self-driving car brand called Z-O-O-O-X is already going for test drives in Las Vegas and San Francisco. It's basically a shiny box on wheels, four passenger seats, no steering wheel, and a robot voice that talks to you when you get in. Welcome to Zooks. Use the touch screen to close the doors, and please buckle up. Zook's cars are pretty different from most of the self-driving cars on the road right now,

like Waymo, says Jeff Ferra, CEO of the Autonomous Vehicle Industry Association. For the most part, when you're getting into a robo taxi right now, you have a vehicle that looks very much like a vehicle that you could buy yourself. But that could change now that the feds have allowed Zooks to roll out up to 2,500 of its vehicles annually in the next two years and begin charging for. rides. And new federal safety standards now in development could allow for a lot more cars like this. Sam Abwell-Samid at the market research firm Telematry says those standards should set minimum requirements for what a self-driving car can do, just like we require for human drivers.

When humans go into a DMV and want to get a driver's license, first thing you have to do is take an eye exam and take a written test and prove that you understand the basic rules of the road. Once autonomous car companies know what's required of them, that could give the industry a clearer path to growth. But it faces other hurdles, says Missy Cummings at George Mason University. For one, there is no such thing as a self-driving car. All of these vehicles require extensive human supervision. Just not in the cars. Teams of people, in some cases overseas, are monitoring these cars remotely and stepping in when they run into trouble.

And that's expensive. It's still not clear whether we're not clear whether we're going. one self-driving car with one passenger and a remote operator supervising it is really going to scale in terms of cost. Another big hurdle, driving in bad weather, says Sam Abil-Salemad at telemetry. Autonomous vehicles aren't very good at it. If you look at where these things have been deployed so far, most of them have been deployed in warm weather environments.

California, Texas, Nevada. To really grow, he says self-driving cars are going to have to get better at driving in places with snow, rain, and fog. I'm Henry App for Marketplace. It's going to be a busy weekend at the movies. Odyssey, yes, but also the newest Spider-Man movie already made a record-breaking $72 million in previews. Those are obviously major studio productions

with massive budgets. But smaller independent films often get their first real spotlight at Sundance. And come January, the Sundance Film Festival is leaving its longtime home in Park City, Utah, and moving to Boulder, Colorado. Sundance is no small operation. So the question is, where are all those actors, directors, and executives going to stay?

Marketplace's Lee Patterson reports on how Boulder is trying to make room for Sundance. Dan Andrews' four-bedroom home is on a quiet street in North Boulder. Hi, Dan. Yeah. How are you? When Andrews heard the city had created a special short-term rental license for the film, Festival, he applied immediately. We were pretty intrigued right away.

Andrews thought he and his wife could go out of town and make some money, maybe cover their mortgage for a few months. And it wasn't until we started learning more than we were like, hmm, this may not be for us, actually. That's because renting out his home would take some work, starting with his office. Which is quite a command station here. Lots of screens. Lots of screens, lots of hardware and equipment.

man. Andrews, who is an AI engineer, says he would need to move out all of this gear and then buy bedroom furniture for the space. Plus, he would need to hire a property manager to oversee the rental while they're away. For us, it was really a question of, well, how many days could be actually rented out for and at what price? These are some of the questions homeowners are considering in deciding whether or not to rent. Right now, the city has around 1,400 active for festival rentals and short-term rentals, but Boulder's Sundance rental market is brand new, so neither inventory nor pricing is established. I think the first thing is it's okay to make money.

Caleb Dickinson is with Fox Property Management, which is partnering with Boulder on festival housing. It is okay to make money when you're inconvenience yourself and you're giving a great asset to someone else. Pricing will vary, of course, depending on size, location, and level of luxury. And yeah, maybe you get Tom Cruise to stay in your place and money's not a thing, but maybe you get a first-time director with an independent film who's never made much money wanting to stay in your home. The City of Boulder's pricing guide suggests a high-end, walkable four-bedroom house should go for around $15,000 for the 11-day festival. Some properties are listed on Airbnb for much more. The reason to price it accurately is so that people keep coming back, honestly, This is hopefully a 10-year event.

And if we get this really wrong, it won't be a 10-year event. Jill Grano, a Boulder realtor who helped start the state's festival lodging effort, points out that it's early. She says Airbnb data from the World Cup, for example, showed most housing didn't come online until a few months prior. And I think that we're going to see a lot of that. Plus, the number of short-term rental licenses is going up. All of the numbers are actually starting to point in a good direction,

a place that we weren't in a couple months ago. We grow vegetables. We love it. It's very hot out today. North Boulder homeowner Dan Andrews says his family will decide whether or not to rent by the end of the summer. He would love to see some sort of incentive from the city, a rebate or tax break. Because I'm already picturing all the work I'm going to have to do to get all my stuff from upstairs down to the basement. I would hopefully be able to hire somebody to help, but that's a lot.

not free. Andrew says he may just sit out this first year to see how the rental market develops. In Boulder, I'm Lee Patterson for Marketplace. This final note on the way out today, New York is suing Kalshi. That's, of course, one of the country's biggest prediction market operators, where people can put money on everything from elections to sports. Essentially, New York argues that Kalshi is running an illegal gambling operation. And once they keep it out of the state, unless it gets a gambling license. Calhsu's defense is that their markets are more Wall Street than Las Vegas. Needless to say, a whole lot of money is writing on this, and New York is not the first state to push back, because at the heart of all these fights is a question regulators and courts are still

wrestling with. What's the difference between trading on the future and just plain old gambling? Our theme music was composed by B.J. Leiderman, Marketplace's executive producer is Nancy Forgali. Joanne Griffith is the chief content officer. Neil Scarborough is the vice president. and general manager. And I'm Rima Grace. All right, everyone, have a great weekend. We'll be back on Monday. This is APM. The economy never stops shifting. Markets move, global trade gets disrupted, and policies shift. And all these factors have a tremendous influence on the ways we live and work. I'm Kimberly Adams, host of Marketplace Morning Report, a daily 10-minute podcast where a team of award-winning reporters helps you make sense of our evolving economy.

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