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The three challenges keeping cars from being fully autonomous

https://www.technologyreview.com/s/613399/the-three-challenges-keeping-cars-from-being-fully-autonomous/

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Understanding where we are in the pursuit of self-driving cars can be as confusing as understanding where we are in the pursuit of AI. Over the past few years, the flood of companies entering the space and the constant news updates have made it seem as if fully autonomous vehicles are just barely out of reach. The past couple weeks have been no different: Uber announced a new CEO and $1 billion investment for its self-driving unit, Waymo launched a ride-hailing app to open up its service to more riders in Phoenix, and Tesla unveiled a new custom AI chip that promises to unlock full autonomy.

But driverless vehicles have stayed in beta, and carmakers have wildly differing estimates of how many years we still have to go. In early April, Ford CEO Jim Hackett expressed a conservative stance, admitting that the company had initially “overestimated the arrival of autonomous vehicles.” It still plans to launch its first self-driving fleet in 2021, but with significantly dialed-back capabilities. In contrast, Tesla’s chief, Elon Musk, bullishly claimed that self-driving technology will likely be safer than human intervention in cars by 2020. “I’d be shocked if it’s not next year at the latest,” he said.

I’m not in the business of prediction. But I recently sat down with Amnon Shashua, the CEO of Mobileye, to understand the challenges of reaching full autonomy. Acquired by Intel in 2017, the Israeli-based maker of self-driving tech has partnerships with more than two dozen carmakers and become one of the leading players in the space.

Shashua presented challenges in technology, regulation, and business.

Building a safe car. From a technical perspective, Shashua splits driverless technology into two parts: its perception and its decision-making capabilities. The first challenge, he says, is to build a self-driving system that can perceive the road better than the best human driver. In the US, the current car fatality rate is about one death per 1 million hours of driving. Without drunk driving or texting, the rate probably decreases by a factor of 10. Effectively that means a self-driving car’s perception system should fail, at an absolute maximum, once in every 10 million hours of driving.

But currently the best driving assistance systems incorrectly perceive something in their environment once every tens of thousands of hours, Shashua says. “We’re talking about a three-orders-of-magnitude gap.” In addition to improving computer vision, he sees two other necessary components to closing that gap. The first is to create redundancies in the perception system using cameras, radar, and lidar. The second is to build highly detailed maps of the environment to make it even easier for a car to process its surroundings.

Building a useful car. The second challenge is to build a system that can make reasonable decisions, such as how fast to drive and when to change lanes. But defining what constitutes “reasonable” is less a technical challenge than a regulatory one, says Shashua. Anytime a driverless car makes a decision, it has to make a trade-off between safety and usefulness. “I can be completely safe if I don’t drive or if I drive very slowly,” he says, “but then I’m not useful, and society will not want those vehicles on the road.” Regulators must therefore formalize the bounds of reasonable decision-making so that automakers can program their cars to act only within those bounds. This also creates a legal framework for evaluating blame when a driverless car gets into an accident: if the decision-making system did in fact fail to stay within those bounds, then it would be liable.

Building an affordable car. The last challenge is to create a cost-effective car, so consumers are willing to switch to driverless. In the near term, with the technology still at tens of thousands of dollars, only a ride-hailing business will be financially sustainable. In that context, “you are removing the driver from the equation, and the driver costs more than tens of thousands of dollars,” Shashua explains. But individual consumers would probably not pay a premium over a few thousand dollars for the technology. In the long term, that means if automakers intend to sell driverless passenger cars, they need to figure out how to create much more precise systems than exist today at a fraction of the cost. “So the robo-taxi—we’re talking about the 2021, 2022 time frame,” he says. “Passenger cars will come a few years later.”

Mobileye is now working to overcome these challenges on all fronts. It has been refining its perception system, creating detailed road maps, and working with regulators in China, the US, Europe, and Israel to standardize the rules of autonomous driving behavior. (And it’s certainly not alone: TeslaUber, and Waymo are all engaging in similar strategies.) The company plans to launch a driverless robo-taxi service with Volkswagen in Tel Aviv by 2022.

This story originally appeared in our Webby-nominated AI newsletter The Algorithm. To have it directly delivered to your inbox, sign up here for free.

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These ten enterprise M&A deals totaled over $40B in 2019

It would be hard to top the 2018 enterprise M&A total of a whopping $87 billion, and predictably this year didn’t come close. In fact, the top 10 enterprise M&A deals in 2019 were less than half last year’s, totaling $40.6 billion. This year’s biggest purchase was Salesforce buying Tableau for $15.7 billion, which would…

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These ten enterprise M&A deals totaled over $40B in 2019

It would be hard to top the 2018 enterprise M&A total of a whopping $87 billion, and predictably this year didn’t come close. In fact, the top 10 enterprise M&A deals in 2019 were less than half last year’s, totaling $40.6 billion.

This year’s biggest purchase was Salesforce buying Tableau for $15.7 billion, which would have been good for third place last year behind IBM’s mega deal plucking Red Hat for $34 billion and Broadcom grabbing CA Technologies for $18.8 billion.

Contributing to this year’s quieter activity was the fact that several typically acquisitive companies — Adobe, Oracle and IBM — stayed mostly on the sidelines after big investments last year. It’s not unusual for companies to take a go-slow approach after a big expenditure year. Adobe and Oracle bought just two companies each with neither revealing the prices. IBM didn’t buy any.

Microsoft didn’t show up on this year’s list either, but still managed to pick up eight new companies. It was just that none was large enough to make the list (or even for them to publicly reveal the prices). When a publicly traded company doesn’t reveal the price, it usually means that it didn’t reach the threshold of being material to the company’s results.

As always, just because you buy it doesn’t mean it’s always going to integrate smoothly or well, and we won’t know about the success or failure of these transactions for some years to come. For now, we can only look at the deals themselves.

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Jumia, DHL, and Alibaba will face off in African ecommerce 2.0

The business of selling consumer goods and services online is a relatively young endeavor across Africa, but ecommerce is set to boom. Over the last eight years, the sector has seen its first phase of big VC fundings, startup duels and attrition. To date, scaling e-commerce in Africa has straddled the line of challenge and…

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Jumia, DHL, and Alibaba will face off in African ecommerce 2.0

The business of selling consumer goods and services online is a relatively young endeavor across Africa, but ecommerce is set to boom.

Over the last eight years, the sector has seen its first phase of big VC fundings, startup duels and attrition.

To date, scaling e-commerce in Africa has straddled the line of challenge and opportunity, perhaps more than any other market in the world. Across major African economies, many of the requisites for online retail — internet access, digital payment adoption, and 3PL delivery options — have been severely lacking.

Still, startups jumped into this market for the chance to digitize a share of Africa’s fast growing consumer spending, expected to top $2 billion by 2025.

African e-commerce 2.0 will include some old and new players, play out across more countries, place more priority on internet services, and see the entry of China.

But before highlighting several things to look out for in the future of digital-retail on the continent, a look back is beneficial.

Jumia vs. Konga

The early years for development of African online shopping largely played out in Nigeria (and to some extent South Africa). Anyone who visited Nigeria from 2012 to 2016 likely saw evidence of one of the continent’s early e-commerce showdowns. Nigeria had its own Coke vs. Pepsi-like duel — a race between ventures Konga and Jumia to out-advertise and out-discount each other in a quest to scale online shopping in Africa’s largest economy and most populous nation.

Traveling in Lagos traffic, large billboards for each startup faced off across the skyline, as their delivery motorcycles buzzed between stopped cars.

Covering each company early on, it appeared a battle of VC attrition. The challenge: who could continue to raise enough capital to absorb the losses of simultaneously capturing and creating an e-commerce market in notoriously difficult conditions.

In addition to the aforementioned challenges, Nigeria also had (and continues to have) shoddy electricity.

Both Konga — founded by Nigerian Sim Shagaya — and Jumia — originally founded by two Nigerians and two Frenchman — were forced to burn capital building fulfillment operations most e-commerce startups source to third parties.

That included their own delivery and payment services (KongaPay and JumiaPay). In addition to sales of goods from mobile-phones to diapers, both startups also began experimenting with verticals for internet based services, such as food-delivery and classifieds.

While Jumia and Konga were competing in Nigeria, there was another VC driven race for e-commerce playing out in South Africa — the continent’s second largest and most advanced economy.

E-tailers Takealot and Kalahari had been jockeying for market share since 2011 after raising capital in the hundreds of millions of dollars from investors Naspers and U.S. fund Tiger Global Management.

So how did things turn out in West and Southern Africa? In 2014, the lead investor of a flailing Kalahari — Naspers — facilitated a merger with Takealot (that was more of an acquisition). They nixed the Kalahari brand in 2016 and bought out Takelot’s largest investor, Tiger Global, in 2018. Takealot is now South Africa’s leading e-commerce site by market share, but only operates in one country.

In Nigeria, by 2016 Jumia had outpaced its rival Konga in Alexa ratings (6 vs 14), while out-raising Konga (with backing of Goldman Sachs) to become Africa’s first VC backed, startup unicorn. By early 2018, Konga was purchased in a distressed acquisition and faded away as a competitor to Jumia.

Jumia went on to expand online goods and services verticals into 14 Africa countries (though it recently exited a few) and in April 2019 raised over $200 million in an NYSE IPO — the first on a major exchange for a VC-backed startup operating in Africa.

Jumia’s had bumpy road since going public — losing significant share-value after a short-sell attack earlier in 2019 — but the continent’s leading e-commerce company still has heap of capital and generates $100 million in revenues (even with losses).

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Airbnb’s New Year’s Eve guest volume shows its falling growth rate

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between. It’s finally 2020, the year that should bring us a direct listing from home-sharing giant Airbnb, a technology company valued at tens of billions of dollars. The company’s flotation will be a key event in…

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Airbnb’s New Year’s Eve guest volume shows its falling growth rate

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

It’s finally 2020, the year that should bring us a direct listing from home-sharing giant Airbnb, a technology company valued at tens of billions of dollars. The company’s flotation will be a key event in this coming year’s technology exit market. Expect the NYSE and Nasdaq to compete for the listing, bankers to queue to take part, and endless media coverage.

Given that that’s ahead, we’re going to take periodic looks at Airbnb as we tick closer to its eventual public market debut. And that means that this morning we’re looking back through time to see how fast the company has grown by using a quirky data point.

Airbnb releases a regular tally of its expected “guest stays” for New Year’s Eve each year, including 2019. We can therefore look back in time, tracking how quickly (or not) Airbnb’s New Year Eve guest tally has risen. This exercise will provide a loose, but fun proxy for the company’s growth as a whole.

The numbers

Before we look into the figures themselves, keep in mind that we are looking at a guest figure which is at best a proxy for revenue. We don’t know the revenue mix of the guest stays, for example, meaning that Airbnb could have seen a 10% drop in per-guest revenue this New Year’s Eve — even with more guest stays — and we’d have no idea.

So, the cliche about grains of salt and taking, please.

But as more guests tends to mean more rentals which points towards more revenue, the New Year’s Eve figures are useful as we work to understand how quickly Airbnb is growing now compared to how fast it grew in the past. The faster the company is expanding today, the more it’s worth. And given recent news that the company has ditched profitability in favor of boosting its sales and marketing spend (leading to sharp, regular deficits in its quarterly results), how fast Airbnb can grow through higher spend is a key question for the highly-backed, San Francisco-based private company.

Here’s the tally of guest stays in Airbnb’s during New Years Eve (data via CNBC, Jon Erlichman, Airbnb), and their resulting year-over-year growth rates:

  • 2009: 1,400
  • 2010: 6,000 (+329%)
  • 2011: 3,1000 (+417%)
  • 2012: 108,000 (248%)
  • 2013: 250,000 (+131%)
  • 2014: 540,000 (+116%)
  • 2015: 1,100,000 (+104%)
  • 2016: 2,000,000 (+82%)
  • 2017: 3,000,000 (+50%)
  • 2018: 3,700,000 (+23%)
  • 2019: 4,500,000 (+22%)

In chart form, that looks like this:

Let’s talk about a few things that stand out. First is that the company’s growth rate managed to stay over 100% for as long as it did. In case you’re a SaaS fan, what Airbnb pulled off in its early years (again, using this fun proxy for revenue growth) was far better than a triple-triple-double-double-double.

Next, the company’s growth rate in percentage terms has slowed dramatically, including in 2019. At the same time the firm managed to re-accelerate its gross guest growth in 2019. In numerical terms, Airbnb added 1,000,000 New Year’s Eve guest stays in 2017, 700,000 in 2018, and 800,000 in 2019. So 2019’s gross adds was not a record, but it was a better result than its year-ago tally.

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