Rethinking transportation 2020-2030, Tony Seba, Stanford

[indirect]

The Disruption of Transportation and the Collapse

of the Internal-Combustion Vehicle and Oil Industries

 

 

https://static1.squarespace.com/static/585c3439be65942f022bbf9b/t/591a2e4be6f2e1c13df930c5/1494888038959/RethinkX+Report_051517.pdf

[Guest 50centdollars]

Here is the video

 

[DanielGMask]

Great talk. This should be mandatory viewing for every investor!

[Spekulatius]

I bet the presentations about nuclear power in the 50's looked the same.

 

Some changes occur faster than anyone expects, and some slower. Sheba has cherry picked examples. I also think that his cost estimates for electric vehicles (repair costs etc) as well as for current vehicles are way off, just to pick some details.

[rkbabang]

I bet the presentations about nuclear power in the 50's looked the same.

 

Some changes occur faster than anyone expects, and some slower. Sheba has cherry picked examples. I also think that his cost estimates for electric vehicles (repair costs etc) as well as for current vehicles are way off, just to pick some details.

 

Autonomous driving, unlike break-even fusion power, is already possible today.  The only thing standing in its way now is implementation, costs, and regulations.  It isn't like fusion in the 1950's, it is already much further along than fusion still is in 2017.

 

[Uccmal]

He is wildly overoptimistic. 

 

I have yet to have someone show me how autonomous vehicles are going to safe from hacking, or their equivalent of the blue screen of death, or in the case of my Ipad, the assorted screen freezes, and random crashes. 

 

The notion of ride sharing services operating in rural and exhurban areas is completely ludicrous.  He has no clue how people live and work in those environments. 

 

i.e. Repairing a water heater this winter at my cottage:  I had to drive down a dirt road four times one day to get parts at the nearby home hardware.  I had to go and look at the parts shelf each time to see what would work best.  And I am going to call a ride share program each time.  Yeah, right. 

 

File this whole report in the "I will believe it when I see it file".

 

 

[Spekulatius]

Nuclear power <> fusion. Nuclear power is solved from a technical POV since the 1950's. I agree on autonomous driving and I think we will see that before the majority of the cars will be electric. I am not sure, if the ownership model will change.

 

Some things change much slower than I think they would. When online banking came out in the late 90's, I really thought that this would make bank branches obsolete, but here we are 20 years later and we still have more branches l than back then ( I think). And that is just with a fungible asset ( money) that can easily be virtualized and moved around online.

[rkbabang]

He is wildly overoptimistic. 

 

I have yet to have someone show me how autonomous vehicles are going to safe from hacking, or their equivalent of the blue screen of death, or in the case of my Ipad, the assorted screen freezes, and random crashes. 

 

The notion of ride sharing services operating in rural and exhurban areas is completely ludicrous.  He has no clue how people live and work in those environments. 

 

i.e. Repairing a water heater this winter at my cottage:  I had to drive down a dirt road four times one day to get parts at the nearby home hardware.  I had to go and look at the parts shelf each time to see what would work best.  And I am going to call a ride share program each time.  Yeah, right. 

 

File this whole report in the "I will believe it when I see it file".

 

I agree that it will be a long time, if ever, before this happens in the most rural areas.  It will happen in the densest cities first and move out from there.  I think the major population centers (the two coasts almost completely and around the major interior cities) will look like he suggests within the next 20-30 years.  There is just no way to profitably run a ride sharing service without a certain population density to support it.  I'm not sure what that density is exactly and I suspect that the required density will decrease over time, but it may never be profitable in the most rural areas.

 

[rkbabang]

He is wildly overoptimistic. 

 

I have yet to have someone show me how autonomous vehicles are going to safe from hacking, or their equivalent of the blue screen of death, or in the case of my Ipad, the assorted screen freezes, and random crashes. 

 

The notion of ride sharing services operating in rural and exhurban areas is completely ludicrous.  He has no clue how people live and work in those environments. 

 

i.e. Repairing a water heater this winter at my cottage:  I had to drive down a dirt road four times one day to get parts at the nearby home hardware.  I had to go and look at the parts shelf each time to see what would work best.  And I am going to call a ride share program each time.  Yeah, right. 

 

File this whole report in the "I will believe it when I see it file".

 

I agree that it will be a long time, if ever, before this happens in the most rural areas.  It will happen in the densest cities first and move out from there.  I think the major population centers (the two coasts almost completely and around the major interior cities) will look like he suggests within the next 20-30 years.  There is just no way to profitably run a ride sharing service without a certain population density to support it.  I'm not sure what that density is exactly and I suspect that the required density will decrease over time, but it may never be profitable in the most rural areas.

 

Also, just thinking out loud here, this will increase the price of regular human driven automobiles since there will no longer be an economy of scale. Most vehicles will be autonomous, so many manufacturers will stop making human driven vehicles altogether leaving it as a niche product for the few who continue to make them.  This will further increase the cost of living in rural areas, which will further the wealth divide and increase the migration to the population centers over time which will exacerbate all these effects in a virtuous/vicious cycle (depending on your point of view).

 

[cwericb]

Every time I hear someone predicting that autonomous vehicles are just around the corner it makes me seriously question their credibility.

 

The day I see an autonomous vehicle drive through a snowstorm, dodging snow drifts and whiteouts, then perhaps, just perhaps I might believe autonomous cars might have a future.

 

Until then they belong with the Jetsons.

[Gardener]

I love technological progress, but also think these estimates are way off...

 

You often see forecasts being interpolated from previous smartphone adoption, but the smartphone was totally different in my opinion. First time I say an iPhone I was like "damn, can you do all of this with this thing". You have a camera, an ipod, a notebook, a internet device, ...., and o-yeah a phone all in once. If you compared the price of all these things combined, a smartphone is one heck of a deal. THAT imo is the reason why smartphones were so quickly dispersed across society.

 

Even if tomorrow they sell a autonomous driving vehicle, I won't buy it since I already drive a vehicle and the added value of autonomous driving doesn't convince me to buy a new car...

[rkbabang]

I love technological progress, but also think these estimates are way off...

 

You often see forecasts being interpolated from previous smartphone adoption, but the smartphone was totally different in my opinion. First time I say an iPhone I was like "damn, can you do all of this with this thing". You have a camera, an ipod, a notebook, a internet device, ...., and o-yeah a phone all in once. If you compared the price of all these things combined, a smartphone is one heck of a deal. THAT imo is the reason why smartphones were so quickly dispersed across society.

 

Even if tomorrow they sell a autonomous driving vehicle, I won't buy it since I already drive a vehicle and the added value of autonomous driving doesn't convince me to buy a new car...

 

Of course you won't.  I won't either.  But when the total cost of not owning a car and using a car service instead saves you 5-10X per year over the cost of buying/maintaining a new car then the next time you need a new car you may choose not to buy one, but rather sell your used car for what you can get for it and sign up for the car service instead.

 

 

[Pelagic]

The question as i see it is, can we extrapolate cost trends from technology, into other physical products where technology only accounts for a portion of the unit cost? Improving technology has certainly had a major impact on lower costs for electric cars and solar but will the trend lines continue or will they plateau as the portion of the cost that technology represents becomes smaller. Solar for instance is still going to have manufacturing and installation costs for instance and cars will still need steel and aluminum and somebody(thing) to stick it all together, whether they're self driving EVs or human controlled ICEs. I think it's naive bordering on disingenuous by the presenter to put up graphs of trend lines and then imply that costs will fall at the same rate or that utilization will increase at the same rate, especially when there are competing technologies benefitting from some of the same advancements available to self driving or electric cars or solar.

 

That said, assuming the autonomous vehicle future comes to fruition, there are some interesting implications. I know a lot of people who are "car people" for lack of a better term, they like their cars, know everything about them, go to meets with other owners, etc. Is this whole subset of American culture going to disappear? It's hard to get excited about a vehicle you have no control over, it will eventually become a commodity item with one car interchangeable for another. The incentive to take care of or fine tune your vehicle is a lot less if you aren't driving it, not a particularly bright future for aftermarket auto manufacturers.

[rkbabang]

The question as i see it is, can we extrapolate cost trends from technology, into other physical products where technology only accounts for a portion of the unit cost? Improving technology has certainly had a major impact on lower costs for electric cars and solar but will the trend lines continue or will they plateau as the portion of the cost that technology represents becomes smaller. Solar for instance is still going to have manufacturing and installation costs for instance and cars will still need steel and aluminum and somebody(thing) to stick it all together, whether they're self driving EVs or human controlled ICEs. I think it's naive bordering on disingenuous by the presenter to put up graphs of trend lines and then imply that costs will fall at the same rate or that utilization will increase at the same rate, especially when there are competing technologies benefitting from some of the same advancements available to self driving or electric cars or solar.

 

That said, assuming the autonomous vehicle future comes to fruition, there are some interesting implications. I know a lot of people who are "car people" for lack of a better term, they like their cars, know everything about them, go to meets with other owners, etc. Is this whole subset of American culture going to disappear? It's hard to get excited about a vehicle you have no control over, it will eventually become a commodity item with one car interchangeable for another. The incentive to take care of or fine tune your vehicle is a lot less if you aren't driving it, not a particularly bright future for aftermarket auto manufacturers.

 

There are still horses and horse people who love them.  Not many though, but almost nothing ever goes away entirely.

 

 

[TorontoRaptorsFan]

I love technological progress, but also think these estimates are way off...

 

You often see forecasts being interpolated from previous smartphone adoption, but the smartphone was totally different in my opinion. First time I say an iPhone I was like "damn, can you do all of this with this thing". You have a camera, an ipod, a notebook, a internet device, ...., and o-yeah a phone all in once. If you compared the price of all these things combined, a smartphone is one heck of a deal. THAT imo is the reason why smartphones were so quickly dispersed across society.

 

Even if tomorrow they sell a autonomous driving vehicle, I won't buy it since I already drive a vehicle and the added value of autonomous driving doesn't convince me to buy a new car...

 

Of course you won't.  I won't either.  But when the total cost of not owning a car and using a car service instead saves you 5-10X per year over the cost of buying/maintaining a new car then the next time you need a new car you may choose not to buy one, but rather sell your used car for what you can get for it and sign up for the car service instead.

 

Hence why all the big tech players (Google, Apple, Microsoft, etc) see it coming and want a piece of the pie.

They'll roll out ride sharing naturally in larger cities (NYC, London, Tokyo, LA) and then roll it out elsewhere. At some population point it doesn't make sense (less than <25,000)

[CorpRaider]

We should replace most of the autos in city center with electrified multi passenger vehicles.  I will file a patent and call it the "trolley" system.  ;D

[LongTermView]

By 2030, within 10 years of regulatory approval of autonomous vehicles (AVs), 95% of U.S. passenger miles traveled will be served by on-demand autonomous electric vehicles owned by fleets, not individuals, in a new business model we call “transport-as-a-service” (TaaS).

 

95% by 2030 is very specific. If I had to bet on this then I'd take the under with respect to the 95%.

 

What about people using cars as lockers/storage? Among other things, my car has golf clubs, golf shoes, gym bags, a yoga mat, jogging shoes, sun tan lotion, hats, umbrellas, measuring tapes, books, roof rack tie downs and levels.

 

What about folks who have tools and equipment in and on their vehicles?

 

Also, as other have said, this underestimates the impact of people in rural areas where it is more practical to keep a vehicle on site.

 

What about people like Nick Offerman who enjoy driving their own cars?

 

Some parts of Tony's video left an impression:

100x fewer moving parts in electric vehicles than internal combustion vehicles.

LIDAR costs have fallen dramatically.

it takes 2,500 liters of water to make 1 liter of ethanol from sugar cane

 

[rkbabang]

We should replace most of the autos in city center with electrified multi passenger vehicles.  I will file a patent and call it the "trolley" system.  ;D

 

I wouldn't ride in the vehicle if there were other passengers. Your service would have to be a lot cheaper than the car services.  Autonomous busses don't seem very attractive to me, I would never give up my car for that.

[rb]

One think I don't get is how is ride sharing supposed to meaningfully increase efficiency/lower cost for people that drive to work. Let's say that you have x people in that bucket. Those x people would require a car at roughly the same car. So for this pool of people you would need something close to x cars in your fleet. Yes a bit less than x because not everyone goes to work at the same time.

 

But if you have an efficiency of 20% then my savings on sharing vs owning a vehicle are 20x(1-profit margin of fleet operator). In my opinion that's not such a meaningful reduction in expense to give up ownership. This also doesn't take into account the other inconveniences of such a fleet such being bombarded by ads on my trip home from work.

[rb]

We should replace most of the autos in city center with electrified multi passenger vehicles.  I will file a patent and call it the "trolley" system.  ;D

 

I wouldn't ride in the vehicle if there were other passengers. Your service would have to be a lot cheaper than the car services.  Autonomous busses don't seem very attractive to me, I would never give up my car for that.

Lol that was snark from CorpRaider

[Spekulatius]

I think most will agree on one thing - the future will look different than anyone envisions it.

[Gregmal]

We should replace most of the autos in city center with electrified multi passenger vehicles.  I will file a patent and call it the "trolley" system.  ;D

 

I wouldn't ride in the vehicle if there were other passengers. Your service would have to be a lot cheaper than the car services.  Autonomous busses don't seem very attractive to me, I would never give up my car for that.

 

100%. Not only do I like driving, but I also like the peace and quiet when I'm driving alone. I would never ride with others. I also like being in control of the vehicle.

[Uccmal]

One think I don't get is how is ride sharing supposed to meaningfully increase efficiency/lower cost for people that drive to work. Let's say that you have x people in that bucket. Those x people would require a car at roughly the same car. So for this pool of people you would need something close to x cars in your fleet. Yes a bit less than x because not everyone goes to work at the same time.

 

But if you have an efficiency of 20% then my savings on sharing vs owning a vehicle are 20x(1-profit margin of fleet operator). In my opinion that's not such a meaningful reduction in expense to give up ownership. This also doesn't take into account the other inconveniences of such a fleet such being bombarded by ads on my trip home from work.

 

Very interesting points.  I hadn't really thought of the "everyone wants a ride by themselves at the same time".  And of course there will be a constant feed of advertising. 

 

The deeper I get into this the more of a non-starter it is.  Large usage of EVs seems probable butnthe rest... I dunno. 

 

I think most will agree on one thing - the future will look different than anyone envisions it.

 

Aint that the truth.  We always tend to extrapolate the trends and problems of today into the future. 

[Pelagic]

One think I don't get is how is ride sharing supposed to meaningfully increase efficiency/lower cost for people that drive to work. Let's say that you have x people in that bucket. Those x people would require a car at roughly the same car. So for this pool of people you would need something close to x cars in your fleet. Yes a bit less than x because not everyone goes to work at the same time.

 

Ironically this is the same reasoning behind peaking natgas power plants that he foresees no longer being necessary by 2030. Perhaps ride sharing of private vehicles like we know it today will still be relevant despite Uber and Lyft's efforts to move to a fleet of autonomous vehicles. Peak demand needs to be met somehow and private cars that are unused at the time or where use as part of the ride sharing pool is preferable to the owner's use will fill the difference between average usage and peak usage.

 

Speaking of which, if you were an investor in Uber or Lyft, would you be happy initially investing in an asset light technology platform and having it pivot into an asset heavy fleet of company owned autonomous vehicles? (I realize returns so far have been awesome  ;))It's always struck me as two very different business models. Once autonomous vehicles for ridesharing are common place in urban areas, I can see it becoming like the airline business where you have apps that let you comparison shop for the lowest fare, forcing most participants in the space to compete on price.

[Cardboard]

Some of these visionaries are...

 

1- It is already proven that using taxis is cheaper than owning your own car for the vast majority of people. And now with Uber, it is even cheaper and more efficient. Forget about rural/urban. So now all of a sudden people will stop buying their own car because the "autonomous" driving is done by a robot instead of a human? Remove a guy inside the vehicle that makes $20,000/year and now the cost advantage is life changing?

 

2- I also love their fascination for making obsolete fossil fuels. Again, how do you produce the electricity? Why is an autonomous car propelled by electricity any different than an electric car in terms of function? If there are fewer cars, so they run all the time, how do you beat the instantaneous recharge of a fossil fuel car? How much technological advance is required so that electric car can compete if oil is at $25/barrel?

 

What they also seem to forget is that if society is so advanced in terms of movement, then other areas have also advanced dramatically which may make this whole debate just a side show.

 

Cardboard