Odd Lots - Self-Driving Cars Might Finally Be For Real This Time

Episode Date: September 7, 2023

A decade ago, there was a lot of hype about self driving cars. In fact, there was more interest in self-driving cars than there was in electric vehicles, in terms of the future of the auto industry. But progress in developing these robotic cars has turned out to be slow, and many tricky challenges still have not been solved. But is the technology finally ready for prime time? On this episode of the Odd Lots podcast, we speak with long-time technology journalist and analyst Tim Lee, the author of the Understanding AI newsletter, about why he believes self-driving cars are here and why they're finally about to make serious commercial inroads.See omnystudio.com/listener for privacy information.

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And I'm Tracy Allaway. Tracy, remember the hype about self-driving cars from like 10 years ago? Like, that really died out. Can I tell you something? Yeah. I'm still holding out hope for the self-driving cars because I can't drive. And it was kind of acceptable when I was in my 20s, but now it's starting to get a little embarrassing. So I really need the self-driving cars to become viable options. So when we go on the road and like do podcasts like in another city, you have to drive. I have to drive all the time, don't I? I hadn't. Because I think I've asked you, I'm like, oh, Tracy, you're renting a car. And then you like sort of change the discussion or you bring up something else. I think there's Uber's in that town or something. But this is the real reason, isn't it? Well, I mean, there are Uber's everywhere. You know what we should talk about whether or not Uber's have decreased enthusiasm for self-driving cars as a business model.

Remember what people used to say Uber would never make any money if they still had to pay humans, but now they're making a little money. It's true. But I do think generally, like when people talk about like tech that didn't live up to the hype, and that you see it now with like chatbots and stuff like that and whether they're really going to change. Like people go back to the self-driving cars. Like to me, that's the sort of quintessential example of the like modern times, maybe 3D printing. You don't really hear that much about it. Yes. But don't you also find it weird to imagine a future in.

two or three hundred years where there wouldn't be self-driving cars. It feels at once both inevitable and like hype, if that makes sense, like an artificiality. No, I mean, I definitely, I definitely agree. 200 and 300 years, that's a, like, that's a long time, like 50 years from now. You think 50 years from now? Well, so this is the question, which is like my, I is not an area. I know that well, but my impression is it's like, like sort of classic thing where like tech goddess, like 95% of the way there. And then there are some edge cases that make self-driving cars difficult. I don't know exactly what they are.

But that getting that last 5% or whatever is so hard that it renders the whole thing very difficult. And that whatever that last percent is, is the difference between the tech being like, wow, versus actually changing the world. We are so close and yet so far. Yeah, it's one of those things. And I feel like, again, with chatbots and some of this other, like current, like artificial intelligence applications, it comes back to this question. of like, yes, it's really great and it sort of blows your mind, but there are these hallucinations another thing. And like if it's not 99.9, if it's not 100% reliable, does that mean it really won't be as disruptive as people expect it? Well, the other thing I'm curious about is whether or not

that sort of last 5% that you're describing, whether that's on the software or the hardware side. Oh, yeah. Because I think that has implications for, you know, if we do make huge leaps and artificial intelligence, maybe that solves a software problem, but maybe the issue. is actually that the sensors are too basic or too expensive, that sort of thing. I don't know the answer to any of these questions. The one other thing I'll say, too, is like there is a lot of car talk these days. We've been doing more and more on the podcast. It's entirely like on the sort of EV charging side.

And how are EVs and how EV production and batteries like, how are they going to reshape the industry or Chinese exports? How are they going to reshape the industry? It does not seem like, again, 10 years ago, the big question was like, who's a head in the self-driving car race, Google, GM, or Ford. There was much less talk then about EVs as the big disruptor. Right. So I think it is time for a checkup, right, on what's going on with self-driving cars. It is time for a checkup. And our guest says they're back, that they're happening for real. And I do believe him to some extent because I follow some people who live in

San Francisco and they're tweeting about it more and more that they see them on the road. And sometimes when I'm up at four in the morning to read the internet in the dark and drink coffee, see like people who are still out at night in San Francisco talking about all the self-driving cars around them. So there might actually be, it may not be totally over. They might be back. Well, the things I see on the internet about self-driving cars are those edge cases where it's like a car flummoxed by a traffic cone in the middle of the street, which they're simultaneously like impressive and amusing and disappointing all at the same time, if that makes sense. It's interesting. You're very pro self-driving cars. It hadn't clicked.

You really want this to happen. I have a personal self-interest in not having to learn how to drive. I figure if I'm super optimistic, maybe if I just hang on for like another 10 years, maybe. I don't know. Let's ask our guest. Let's ask our guest. We have the perfect guest, longtime tech journalist, a tech understander, someone who really delves deep into technology to understand, like how things work. And what's really happening?

I've followed his work for a long time. We're actually like, we're colleagues together like 18 years ago, I think, at a site called TechDirt. Tim Lee, he is the author of the UnderstandingAI.org newsletter, long-time tech journalist, and he recently wrote a piece, The Death of Self-Diving Cars is greatly exaggerated. So, Tim, great to have you on the show. Hey, I'm great to be on. I'm a fan of the podcast. Thank you very much.

Appreciate that. Let's start 10 years ago. And, you know, I think 10 years ago, there was a lot of self-driving car hype. And my impression was, and this is so vague and fuzzy, it's like, oh, most of it's solved, but this last part's really hard. Is that true? What was that last part that has proven to be very challenging to, like, turn these from, like, prototypes on a track or a very, like, organized grid-like suburb in Arizona to something that could actually be used on the road? So it is true that about 10 years ago, Google was the leading company, and they had vehicles that could, go on certain routes with a fair amount of kind of preparation. And about six years ago, Google

rebranded itself as Waymo, its self-driving car project as Waymo, and started testing a taxi service in Phoenix. And they've been plugging away at that ever since. There were a bunch of other startups that were started between about 2014 and 2018, say, and a lot of those failed or were forced to sell to some of the tech giants. And so there's many fewer companies operating in this space than that were five or six years ago. In terms of what the last little bit is, it's just a lot of little things. I mean, that's the thing about a long tail is there's a lot of stuff out in the long tail. One thing, for example, that Waymo and Cruz, the kind of industry leaders have been struggling with is when you deal with first responders, for example, if you come up to an active fire site, you're not supposed to drive over the hoses that firefighters are using. I mean, that's something you might only encounter every 100,000 miles or something.

And so there's just lots of where it's a really big deal when you do it. Yes, absolutely. There's another case where a cruise vehicle drove through police tape and a crime scene. So there's lots of little things. I saw a headline. I haven't actually looked into this yet, but apparently a cruise drove into wet concrete. So the real world is complicated. And there's just lots of weird situations that a human being, because we kind of understand how the world works.

We see, oh, that looks like wet concrete. I shouldn't drive on that. But you just have to, like, it's like whack-mole. You have to, like, hit every single, like, bad thing. A vehicle can do it. That just takes a lot of a lot, a lot of work. Yeah, I don't know why, but I find all the stories of like robotic self-driving cars behaving badly, absolutely hilarious.

And not the ones where they hurt people, I should just caveat that, but the ones where, you know, something that we wouldn't even think about, you know, there's an object in the road, just go around it. And they seem to really struggle with. I want to ask you more about why that seems to be an issue and sort of get into some of the edge cases that Joe mentioned in the intro. But before we do, why, here's a basic question. why have a lot of these self-driving car companies struggled?

Because on the face of it, it would appear that there is a lot of money floating out there in venture capital land that often goes into unrealistic or unprofitable projects. So why has this been an issue for self-driving cars in particular? I mean, I think on some level, the basic issue with safety, a lot of other areas of tech, you kind of build a minimal viable product and you put it out in the world and it breaks something. times, but that's fine. Like, that gets you more feedback. And because you can kind of iterate rapidly, you can like scale up very quickly and get to a profitable scale pretty quickly. That obviously doesn't work if the moving fast and breaking things is like literally breaking things and killing people. And so you have to be very close to perfect before you can launch a commercial service and start making money. And so you had a bunch of startups that were trying to do this. They had all sorts

of strategies to do that. Some were trying to operate in retirement communities or do like package delivery. They try to find kind of less demanding applications than like drive anywhere anytime, but it's just really, really hard. And so the companies that have sustained are the ones that have Amazon, Google, GM, like big companies behind them who are willing to put like a billion dollars a year behind them for several years in a row while they kind of try to iron out these final little wrinkles. So zooming forward to today, and that makes a lot of sense. I hadn't really thought about that. It's like for many tech, it's okay if there are edge cases where it doesn't work because you just sort of like, well, you put it out in the world and like, yeah, it's not a perfect product, but it's a minimum viable. It's free and we're refining it.

It's free and we're iterating, but you cannot do that when there's big safety issues. And if it's a threat to other drivers or pedestrians, it's not really an acceptable way to do product. Going to today, and you are more optimistic, and we'll get to that about the prospects for their existence. But has there been a breakthrough in recent years, or has it just been this slow, iterative, grinding away at the edge cases that makes it so that there are fewer and fewer edge cases? I would say the second one. I mean, Waymo's technology has worked pretty well. They started doing fully driverless operations in Phoenix in the fall of 2020, and have just very gradually expanded that service. Now, Waymo, just a week or two ago, they got permission from California regulators to begin

operating commercially in San Francisco after a year or two of doing practice driving there. And so, yeah, they've just been plugging away at it. And it's hard to tell from the outside because they're not super transparent about all the details of, you know, how many incidents they have or how much work they have to do on their back end. But yeah, it seems like they're just very gradual in making the technology better. And they seem to think because they're now talking about scaling up much more quickly. they seem to think that the companies seem to think that they're that this is ready for it to be a

commercial product just a really simple question if i were to go to san francisco right now could i go there and download an app or whatever and take get a get in a self-driving taxi like that's a yeah i haven't checked that recently so it was literally like last week or the week before the california regulators gave them permission to do that i think and so until like last week i think there's a waiting list but it's definitely case if you go to certain parts of phoenix um including the Phoenix airport, you can hail a taxi, and it's just like Uber left, you can go try it. I want to do it. I want to do it. Tracy, let's go. Let's go to Phoenix just so that for the one ride then fly back. I've sure. Yeah, and I've talked to people there. I mean, it works quite well.

I mean, the people, I've talked to several people who have ridden in those vehicles, and at least in most rides, they say it's flawless. It drives very comfortably, and yeah, the service, they just aren't that many rough edges. Can we talk a little bit more about the edge stuff? Because my, my impression is that, okay, computers learn from repetition and from modeling out various scenarios, but driving is such an infinitely unpredictable experience, especially if you're in New York. It's not that hard trace. You could get it. Like, if this technology, you've never taken up, I have confidence you could do it.

I don't know. I think I've missed the boat on that one. But anyway, okay. But there are all these different possibilities that a self-driving car could be grappling with. So for instance, an animal runs out in the middle of the street and, you know, maybe after that happens several times, the self-driving car starts to realize, well, it's this animal and then it's going to behave in this way and keep moving or stop and I need to respond to it in a certain way. But that kind of seems to be the issue here as far as I understand it. Yes, absolutely. And there's a

bunch of ways that the companies have tried to do this. So for example, Google has long had a big test track facility out in in California about an hour. I went out there a few years ago where they have some fake roads and they'll create kind of fake scenarios. They'll have cars cut other cars off or have somebody like moving boxes across the street, people in Halloween costumes, something like that. And so they try to think of what are all the situations that a self-driving car could run into and kind of anticipate that. And this is also why they started in Phoenix is one of their strategies was, okay, there's so many out cases. We can't do them all right at once. And so let's start in kind of easy mode. And so Phoenix has very nice weather, nice wide streets, well-marked, not a lot of pedestrians, not a lot of

bicyclists. And so that was kind of way most theory was that we'll do the easiest one first. The issue with that is that the economics of running a taxi service in Phoenix are not that great because most people already have cars. And so Cruz has kind of had the opposite approach, which is we want to see these educations as fast as possible. So let's start in downtown San Francisco because that's where there's a ton of crazy situations. And so it'll kind of be harder in the first place, but we'll be gathering data very quickly. maybe we'll master it. And it's not yet clear yet. I mean, both companies now seem to think they're ready, but I don't think we've seen them in the while long enough to have a sense for

kind of which of those strategies are working better. But yeah, it's really tough. And so I should say, like, for the first few years, both of these companies had safety drivers behind the wheel of every vehicle. And so the vehicle was mostly diving itself. But if it got stuck, the safety driver would have to take over. And the kind of big switching, the big risky point is when they take the first drivers out of the car, which when one did about two years ago and cruise did, I think, maybe a year ago. And then, you know, and then it becomes much trickier because if the vehicle screws up, it's a, it's a big deal. I love the idea of having to train the self-driving cars by, like, putting people in Halloween costumes in front of them. And it reminds me a lot of socializing

my dog, because we used to have to, like, wear weird hats, right? Or, like, bring balloons into the house so that he would get used to them and not freak out. But this goes back to something that I mentioned earlier, which is, is the issue here the software, so like the actual modeling of the reaction to an unknown or unfamiliar event or stimulus, or is it more on the hardware side where maybe you need better sensors that are better able to appreciate the things in front of you? I would say it's more software and particularly more data, but yeah, the hardware has stayed pretty constant. I mean, the trio of sensors, most of these vehicles have are cameras, radar, and then LIDAR, which is a laser range-finding technology that gives you kind of a 3D map of your

environment. And so 10 years ago, Google's cars had those three sensors. And I think now those sensors are better. But I don't think anybody thinks the main issue is that we need to upgrade and the quality of LiDAR. Really, they just need examples of every possible edge case. And it's hard to get enough of that data because some edge cases happen very rarely, but can be very serious if you encounter them. I'm Francie Lacquan, an award-winning journalist. and I've got a new podcast, Leaders with Francine Lacqua from Bloomberg Podcasts.

I've interviewed everyone from Heads of State to fashion icons about the news of the moment. But I've always been curious who are these people as leaders. I don't think there's one right way to be a leader. Make decisions. A poor decision is always better than no decision. Listen to new episodes every other Monday. Follow leaders with Francine Lacan where wherever you get your podcasts. Can you give us a quick, industry overview. You know, you mentioned Waymo, it's Waymo's Google, Cruz is GM.

Cruise is GM, yes. And then obviously Tesla and Elon's, like, if you just like raid Elon's Twitter feed, you would think that they've already had self-driving cars like in the wild. And I don't really think that's true, but I don't really understand what's going on. Can you give like a really just sort of quick like overview of who the big players are and like, who owns them and just sort of like what their status is? Yes, absolutely. So Waymo is mainly owned by Google, cruise is mainly owned by GM. I consider Tesla to be in a different market, and some of the Tesla fans get mad at me when I say this,

but Tesla is building a driver assistance product. So pretty much any car you drive now, they have advanced cruise control where it stays in your lane and doesn't hit the car in front of you. In some ways, I think Tesla has a more advanced version of that, although also in some ways I think it's almost just has a low risk tolerance, and so he's kind of pushing a technology that's, anyway. But the key thing about the Tesla product

is you are not supposed to crawl in the backseat and take a nap, right? You're supposed to be there making sure it doesn't break. Have people crawled in the backseat and taken a nap? I'm sure somebody has. There are videos of people doing inappropriate things while behind the wheel of the Tesla, but you're definitely not supposed to. And the vehicles, they have ways of monitoring the driver so that that doesn't happen. But anyway, so theoretically, Elon Musk thinks they're going to at some point get to the point where you don't have to be behind the wheel, but I did not think they're close to that

or really laying groundwork. Because one of the things for any service like that is you need an operation staff, because a vehicle is occasionally going to get stuck. And when that happens, it used to be able to phone home and get kind of remote guidance about how to deal with it. And as far as they know, Tesla's not doing it. Anyway, so that's Tesla. And then the other two companies, there are a few other companies that I would say are a little behind. So Amazon has a company called Zooks. They used to be a startup, but got acquired by Amazon a couple years ago.

And there's a company called Motional that is also, I think, close to being ready for driverless, but not to driverless. And then there's a company called MobileE that supplies the hardware for most of these driver assistance systems. and they have been working on this technology. So that's another company. But I say those four or five companies are the remaining players. Am I hallucinating this memory, or was there a situation in which Uber hired every single member of the Carnegie Mellon University Robotics Department to work out self-driving cars for them? Yes, absolutely.

That's a real thing that actually happened? Yes, that was an – I don't know if it was every member, but yes. Uber hired a bunch of talent in 2016, 2017. and then one of their vehicles struck and killed somebody in Tampa, Arizona in 2018, and that basically destroyed their program. And so I think the remnants, oh, actually, I should say there's a startup called Aurora that is doing trucking. I think Uber, they acquired Uber's thing. But anyway, yeah, so Uber is now not a player in large part because they're really the only one of these fully self-driving programs that have had a fatality with their testing.

So let's assume that self-driving cars become a realistic thing. How viable is that as a business model? Because on a first reading, it seems extremely expensive to develop, possibly extremely expensive to maintain if you have to provide operational support to all these robot cars out in the field. And then thirdly, it does seem like there's a big regulatory slash safety slash maybe legal liability risk. if something were to happen? I mean, I'm pretty optimistic about it because you think about, if you think about Uber and Lyft, about half of the cost of running Uber and Lyft is the labor of the human driver. And so if you take that out, then Waylon Cruz need to get the new costs, the cost of the sensors, plus whatever operational stuff in R&D to be less than half the cost of the driver. And that's a pretty significant amount of money. And so I think it'll take them a while to get to the scale where it's profitable,

because certainly, WIMO and Cruz both have, I think, hundreds or maybe thousands of people working on this technology, and the sensors are currently pretty expensive. But one of the most predictable things in business is that mass-manufactured technologies like LIDAR sensors and computer chips get cheaper at scale. And so I have no doubt that in the long run, this is going to be a viable business. And it's really, I think, a question of how much patience, the big companies backing, you know, Google, GM and Amazon companies like that, how many billions of dollars they want to spend to get to this. But I think that in the long run, I think that the taxi industry will be operated by self-driving cars. And I think that in the long I also think it'll be cheaper and probably expand the market a lot. So my long-run expectation is that

this is going to be a big and profitable industry. Do you envision it just or primarily for taxis? Or could you have a situation where people like me are buying self-driving cars? Well, just to add on to Tracy's question, because it sort of dovetails, could Tracy drive to work and then make some extra money by during the day when it would be parking for eight hours, have it be a taxi? And then could that impair total volume sales for the automakers because basically Tracy takes her self-driving car to work, but then also is a, you know, serving the taxi industry at the same time. A self-driving car capitalist. Rather than having the car sit for eight hours in the parking. lot or 10 hours. Smart. Right. So I think, certainly I think the initial product is going to be a taxi service. That's what all the people doing passenger. Nobody's talking about selling them in the short run.

Obviously, people like owning cars. And so in the long run, I think there will be a business model where you'll be able to have a car. My guess is that it's going to be something more like a long-term lease than actual outright ownership, but partly for liability reasons, I mean, if you imagine, if you own the car and the brake needs a replacement and you don't replace it and the car crashes to kill somebody, the people who made the software are going to get sued for that. And so I think they're going to be reluctant to sell people self-driving cars outright,

but you might be able to have something that's a long-term lease that's effectively the same as ownership. I'm not sure it would make that much sense. I mean, if you're the kind of person who wants to share a car with other people, then probably you would just take a taxi. So I'm not sure.

I mean, there's a lot of ways that economics can work out. My guess is that you'll have some people who will lease a self-driving car long-term and other people who will just take taxis. And I think that hopefully, like, in the long run, if economy is skilled bring costs down, it'll be much cheaper than the taxi today, like roughly half

the price if you figure that half is labor. And so then that'll allow lots of people, especially in cities, to own fewer cars and take more taxi rides. But I was just going to say, even if you didn't, and I mean, I know other people have said this before, but maybe Tracy doesn't want to share her car with other people during the day, but it could mean less need for parking, right? The car could drive home and go back into your driveway or garage while you're at work. And then pick you up. And then And then the amount of space that a city or a neighborhood needs for parking probably could be significantly diminished. Yes, absolutely. And I think one underestimated benefit is from an urban planning perspective is it'll be much easier to do congestion charging because the vehicles will all be connected. And so I could imagine more kind of complicated pricing where you give people a strong incentive not to drive their car into downtown.

Like if you're going to go downtown, take a taxi or maybe some kind of shared, you know, vehicles. So there's a lot of, I think self-driving cars will open up a lot of new options for the way you kind of organize, especially commutes, because, yeah, you can have different kinds of vehicles and different kinds of business models for how people pay for them. Could I use myself driving car to deliver packages as a sort of gig FedEx worker or something? I hear UPS drivers cost a lot nowadays. Right. I mean, again, I think that'll be a different market. So there's a company called Neuro that is trying to do this. Several companies actually, but I think they're the market leader.

So I think it's possible. I mean, one of the issues is, you know, with a FedEx driver, the FedEx driver physically gets out of the car out of the truck and carries the package to your front door. And obviously, your self-driving cars are going to be able to do that. So I'm not sure exactly what that market will look like. But my guess is that there will be customized delivery vehicles that are much smaller and lighter and cheaper than a full-sized car because there's no reason you need a full

car if there's nobody in the vehicle. Can I ask a question about safety? You know, you mentioned that Uber's self-driving car pilot program ended basically because a car struck and killed a pedestrian. It is also true that human-driven cars are killing people every day. I believe there's tens of thousands of people every year die in auto accident. Do we have meaningful apples to Apple statistics, or is it that still so far that the self-driving car universe is too narrow or in two ideal conditions to actually do a safety comparison? it's actually just the raw number of miles is not high enough so well it's true that that humans

kill 34 to 40,000 people a year um that's just that it's a staggering number yes number of people but humans humans drive billions or trillions of miles every year and so it's like one there's a fatality once every 100 thousand million miles roughly on the roads and self-driving cars are in the tens of millions of miles. So if they were as safe as a human, you would expect about less than one death so far. And so the fact that there has been only one death doesn't really tell you that much about, you know, is it more or less safe? I mean, so far, the Waybo and Cruz, the leaders have had zero deaths, but they've gotten less than 100 million miles. So you just, I think it's just too soon to say for sure. How much does the business model or the eventual profitability of a lot of these self-driving

car companies depend on the way the insurers react? Because I imagine, you know, if there is an accident involving a self-driving car and there's negligence involved or, you know, something's wrong with the model, the legal liability is almost infinite at that point, potentially millions and millions of dollars of payouts if there are actual fatalities. And I guess my question is a lot of this is going to depend on the insurers being willing to take on that risk, right? Yeah, you know, I'm not actually sure exactly what Google and Cruz's insurance situations are. I mean, they're big enough companies that I would guess they can self-insure.

So that's actually not something I haven't, I assume they've disclosed in some regulatory filing how they're insured. But it's a different market because it's not, especially in the early years, it's not going to be individual consumers buying insurance. And so, yeah, I'm not actually sure what the structure of that market is right now. And whether they have third-party insurance or they're just on the hook for the liability. That'd be interesting to look at, yeah. Can I just ask a really simple regulatory question? Right now, if one of these companies said, we're going to be. Good, we got it. You want to get a taxi at, or you want to do cannibal run and you want to go coast to coast.

We'll drive you from New York to California. Could they legally do it or has there still some sort of like regulatory blessing that would need to happen for that to exist? There's very little regulation at the federal level. There's some regulation of the design of the vehicle. For example, you still need to have a steering wheel in the car. But at the federal level, I don't think there'd be any legal barriers to do that. At the state level, it's state by state, I think if you weren't charging for it and just doing this a demonstration, I don't think there'd be any issue in most states. But as I mentioned, so California, I think, is one of the states that regulates these things more heavily. And they do have a fairly substantial process. They treat Way 1 Cruz similarly to the way Uber Lyft are regulated. And they just got the approval to start doing commercial taxi rides in San Francisco.

So, yeah, it's state by state. And Phoenix, I believe there's close to no regulation of that kind of thing. So, yeah, and I think Texas is probably similar. So the more kind of Republican-leaning states, there's very little regulation. California has some, but not enough that it's really, I think, a major problem. You can get the news whenever you want it with Bloomberg News Now. I'm Amy Morris. And I'm Karen Moscow here to tell you about our new on-demand news report delivered right to your podcast feed.

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Get the reporting and the context from Bloomberg's 3,000 journalists and analysts we're all over the world. Listen to the latest from Bloomberg News Now on Apple, Spotify, or anywhere you listen. So we discuss that there are some self-driving cars available out there, but they're kind of a novelty slash experiment at the moment. How will we know when self-driving cars are a sort of viable, realistic thing? What are you watching out for? I think they're running the experiment right now. So Cruz has announced, I think, eight to ten new cities, mostly in the southwest, places like Houston, Dallas, Miami, Atlanta, Nashville. And we'll just kind of have to see how quickly that happens or if it happens. I mean, it certainly wouldn't be the first time that a company has made an announcement in the self-driving space that hasn't panned out. But they've gone from just Phoenix to now Phoenix and San Francisco. And I think, anyway, so we'll just have to, to watch and see if those announcements actually turn into operating services. Like I said, right now, you can go to Phoenix. You can try it. I think in the next few weeks or months, you'll be able,

anybody will be able to tail a car in San Francisco. And then the other thing is a service territory. So right now it's not all of the Phoenix material. It's, I think, a couple hundred square miles. And so, yeah, you'll want to watch what cities are they going into and how big of a service footprint and do that does that service footprint grow over time. And then ultimately we'll have to see the financial results. I mean, these are both publicly traded companies, so eventually, I assume they'll tell us if it's profitable. I don't think it is yet. But yeah, I think if you see them rapidly scaling up the number of vehicles and the number of cities, then that'll be a sign that it's going well. And if it's, if it doesn't, then probably isn't going as well.

I'm not kidding, by the way, about going to Arizona just to try it. Because we, we already want to do an Arizona tour anyway, with all of our land and water and alfalfa and chips episodes we do there. So we got to fly there just to take a self-driving car. I just have like one more. question and it's basically, you know, here in New York, I don't think there's anything, but let's put a real time frame on this. Like you say, like, you know, you say they're coming. We're going to start seeing them more and more in some of these other cities. When can we say, like, you know, when will we have them in New York and give us a year by which we could say, okay, Tim was right or Tim was wrong? So I don't know if I'm making a strong prediction that, you know, on a specific

year. So I will say what Waymo and Cruz have said, I believe Waymo and has said they're planning to increase their footprint by 10x by the end of next year. And Cruz says they're going to reach a billion dollars in revenue, which I think would be a 50x increase by 2025. So I'm a little skeptical to hit those numbers, but that's the scale they're talking about. Now, that would still be a small fraction of the overall taxi industry. Sure. And I think one of the things you'll see is that they haven't entirely figured out the weather situation

and also to some extent they're like really dense infrastructure. So if this question of when will you be able to hail a vehicle in Manhattan, I could still see that being five to ten years away. But I would not be surprised if Los Angeles, Houston, Dallas, Miami, those kind of cities, you know, southwestern kind of suburban cities, if three to five years from now, it's very common to see self-diving taxis as just like a on par with Uber and Lyft in terms of popularity. Tim Lee will have you back in five years and we'll see if all of this born out. Really appreciate you coming on the podcast. Sounds good. Thank you. I'm telling you, Tracy, it always comes back to Arizona for us.

Chips. Seriously. We're getting chips, water, alfalfa, and now self-driving cars. Yeah. Okay. It's not that many things. What other state intersect with? I'm telling you, we've got to take a trip. I'm not being facetious.

Okay. Well, I would happily go to Arizona. I think that'd be fun. I don't know. I'm just going to go back to what I said earlier, which is like self-driving cars at once feel far away and very close and sort of inevitable and also quite difficult, if that makes sense. You know what I thought was really fascinating and I hadn't really appreciated this? His point about one of the companies starting in Phoenix where they're driving is super easy and then you sort of like progressively get better to go to more complicated places. And then the other one starting or mainly operating in San Francisco. where the driving is really difficult. And it's like if you can master San Francisco, you can probably master anyway.

I wonder what the better approach is, like getting progressively, you know, progressively better or just like really taking all the hard stuff on day one. You know what I don't get? Just thinking about that conversation, you know how all the captures to identify robots are like, identify the motorcycles in this photo or identify the buses?

That doesn't bode well for self-driving cars. Wait, why? Why? Well, because it seems like, robots struggle to identify motorcycles on the road and humans don't. I see what you're saying. Right, like our whole approach to even identifying whether someone is a human or not. It's always traffic lights or cars or motorcycles. So maybe actually self-driving cars are ultimately a threat to our existing CAPTCHA systems. Wow. Yeah, right. Like if we could solve self-driving cars, that guarantees that we're going to have spam and other internet attacks. I hadn't really thought about that.

Well, I mean, I think we didn't touch on it much there, but there are also obviously societal implications of this. We talked a little bit about the notion that, well, maybe companies could just replace all the taxi or the Uber drivers, maybe even some mail delivery drivers get replaced. That seems to be an issue as well. And then the other thing, actually, I want to look into this after this conversation, but I am really curious what the insurance is like on these things and who's providing. Yeah, who has to pay and how. I do think there are a lot of big questions. like that are like who's ultimately responsible when one of these malfunctioned. I think in San Francisco recently there was something where a bunch of them all shut down at the same time and they created

all these traffic problems, which is also not something that comes up with human drivers. I also think like the political debates are going to get like super weird. Like what if they say well, you know, because Tim mentioned congestion taxes. What if they say, oh, like you can't even do that route because the computer is determined that that would like use too much energy. Could it And it's interesting. Like, you know, it's interesting, like the red states, as you mentioned, have been a bit more liberal about allowing them. But then there's all in 20 years, will you be allowed to be a human driver? Will you allow it to be like go sightseeing? Like all these things. Like kind of some like big, interesting questions that could reshape society. And then the reshaping like sort of of our physical space, maybe less need for parking. If these actually take off, I think like it will change the world in ways we don't really anticipate. Yeah. Maybe we need to do a self-driving cars episode from the perspective of a city planner or something like that. Oh, that's a good idea. That'd be interesting. Yeah. All right. Well, shall we leave it there for now? Let's leave it there. Okay. And this has been another episode of the All Thoughts podcast. I'm Tracy Alloway. You can follow me at Tracy Allo. And I'm

Jill Weizthel. You can follow me at the stalwart. Follow our guest, Tim Lee. He's at Binary bits. Follow our producers, Carmen Rodriguez at Carmen Armin and Dashel Bennett at Dashbot. And check out all of the Bloomberg podcasts under the handle at podcasts. And for more OddLod's content, go to Bloomberg.com slash oddlots, where we have a transcripts, we have blog and a newsletter, and check out the Discord. We have a transportation and an AI channel and there, so people will be talking about this episode. Go in there, hang out with other listeners 247 Discord.g.g.com slash oddlots. And if you enjoy Oddlots, if you like hearing our thoughts about self-driving cars, then please leave us a positive review on your favorite podcast platform.

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