Apple now has more than 50 autonomous cars on the road

TidBITS Talk
22

Not nearly as true as it was even a decade ago.

My kids are 20 (nearly 21) and 16 and neither has any interest in driving. I know a lot of kids around my eldest’s age who also have no interest in driving if they can at all avoid it. They see it as a chore and something that the might have to do on occasions when it cannot be avoided. None of them want to own a car.

He is in a relatively small city in Canada without uber, lyft, or other ride share services and, oddly, a pretty poor public transit system, so he is feeling pressure to get a car of some sort, but is resisting it.

My niece, on the other hand (well, ‘niece’) was taking her test on her 16th birthday just like it was an 80s movie.

Owning a car is a significant expense and for many people, it is not an expense that makes economic sense even beyond the cost of the vehicle (fuel, insurance, maintenance, parking, etc can be several thousand dollars a year).

The biggest allure to autonomous cars to me isn’t the taking a nap during my commute (I don’t have a commute), it will be the increased efficiency of driving. A truly autonomous system will not have traffic jams. Hell, it won’t even need traffic lights. It will route efficiently for speed over distance, and if the cars are really autonomous (ie, you don’t own them) then the miles and miles of space devoted to parking cars will be massively reduced.

However, what will likely end up happening is autonomous cars will be an expensive service for the elite and everyone else will be shunted on to under-funded, poorly designed, user-hostile mass transit solutions. You know, because we can’t have nice things.

23

That’s of course correct, but once you’re talking about electric cars that don’t have tanks full of explosive liquid, and cars that have LIDAR and other sensors that can see farther and more broadly than human eyes, I certainly hope we’ll see a lot fewer of the stupid accidents that would have been easily preventable with more attention than the human driver gave.

24

Absolutely, which is why I said “While taking the doughheads driving
cars out of the equation will definitely make the roads safer” :-). I
was responding to an earlier post about safety equipment, specifically
“With an increase in safety will we need seatbelts?”. Self-driving cars,
as great as they’ll be, won’t negate Newton’s laws of motion. If a car
stops or swerves quickly to avoid an accident, anything in the car not
tied down will continue to move in the same direction until it hits
something that stops it, like the inside of the car, another passenger,
etc. So on whether safety equipment will still be needed in self-driving
cars (and need to be used), my opinion is definitely yes.

Brian

25

I wonder. Interesting to ponder what options we consider for a vehicle If we discard our current conception. Four people sitting the same way strapped in. When will the stats and risk factors become such that we can tear that up. A long long way off I grant you but I can see it.

@kreme interesting. It is my daughter who is very keen on learning to drive. Perhaps something there.

26

Brad Templeton has an interesting article today on how advertising won’t be able to pay for robotaxi rides, despite what some are saying, since the math just doesn’t work out.

https://ideas.4brad.com/no-ads-wont-pay-your-robotaxi-ride-your-employer-might-and-has-big-consequences

27

From what I’ve read so far, except for the current test market in Phoenix, AZ, Alphabet has fastidiously avoided making any statements about long term plans for any Waymo branded taxi service. Rides are free for this test period, but nothing has been announced about pricing beyond the test. Alphabet hasn’t said a word about whether or not they will run Waymo exclusively as a taxi service or if they will offer any Waymo taxi services on their own at all. At the moment, Waymo is very focused on convincing the big majority of Americans to stop being afraid of driverless cars:

http://adage.com/article/cmo-strategy/google-backed-video-puts-viewers-a-driving-cars/312542/

Waymo is currently testing with Chrysler/Fiat, and they just agreed to purchase a fleet of Jaguars. There are rumors that they are talking with a manufacturer to build an exclusive delivery robo truck, van and/or car with Honda:

https://www.theverge.com/2018/4/2/17189764/waymo-honda-self-driving-delivery-vehicle-krafcik

They are clearly not focusing exclusively on a robo taxi business, and I doubt they would want to compete with Uber, Lyft, etc. at all when they can make more money selling cars or autonomous systems to manufacturers. If I am wrong about this too, It is still highly doubtful that Waymo is aiming for a 100% ad funded robo taxi business model at all. But one thing I know for sure is that the information they collect about any robo taxi service, whether completely ad funded or not, would end up being tremendously popular and more than wildly profitable.

Unfortunately, Brad Templeton doesn’t know anything about advertising sales or media strategy, planning and buying, or production. I have no clue where “38%. Running a 30 second ad spot varies in cost, but $20 per thousand impressions (CPM) is a typical number. That means the advertiser pays 2 cents for every person watching the program” comes from. And the rest of what he says totally ignores that audiences are targeted, and the ability to precisely target messages increases exponentially every minute of every day as more information is gathered about a majority of the global population. He also ignores the fact that television audiences have been seriously declining every year, and people in cars can be a captive, and increasingly targetable audience.

Then there’s this…“You don’t, and won’t, spend your whole time in the car consuming ad-supported services. And when you do, it’s not very likely you will consume services and media from the ride vendor. Most of the time you are going to be just using your phone, consuming media on it, or doing all the other things you like to do on it. That’s what passengers sitting in cars and transit do today.”

Google already beams stuff to your phone depending on location, and this link shows what a no brainer it is to set up an ad with Doubleclick:

https://support.google.com/dfp_premium/answer/6383456?hl=en

It is with Google’s Adwords, and Google is paying $3 billion this year to be iOS’s search engine:

https://adwords.google.com/home/resources/boost-in-store-traffic.html#?modal_active=none

Geo targeted mobile ads are expected to reach $20.8 billion this year alone. This number will grow exponentially in the future. A friend in the business mentioned that they are salivating about the down the road possibility of offering free or discount robo taxi rides to and from airports to promote a travel destination, with in-car ads for stuff you can do or buy at the destination.

More often than not, a robo taxi will contain more than one person. A unique message can be delivered to each person; it doesn’t have to be one message blaring through the car’s speakers, or just one or two people watching a video screen in the back.

I can go on and on all day about how Alphabet and Google will make many, many billions more in ad dollars from advertising targeted to passengers in autonomous cars, but I’m tired so I’ll shut up now.

Marilyn

28

I had a feeling you would have opinions about this, Marilyn. :slight_smile:

Leaving aside all the specifics about which Brad may or may not be right, do you think advertising could ever hit $20 per hour? That seems to be the real question.

29

ace
Adam Engst

    May 22

I had a feeling you would have opinions about this, Marilyn. :slight_smile:

Leaving aside all the specifics about which Brad may or may not be right, do you think advertising could ever hit $20 per hour? That seems to be the real question.

The benchmark is cost per thousand (CPM), not hour. Back in the days when Xtreme precision targeting was wished for but impossible and prices print (hardly at all) radio and TV were not terribly negotiable because of limited inventory, it was a bigger deal than it is in an increasingly digitally invasive era. A CPM of $20 for a 15 second TV commercial is very low, but not nearly as low as a highly targeted 15 pre-roll on YouTube that’s served exclusively to a narrowly defined audience. And Google can does this now in mobile phones, even when you’re in a car.

An example of going against the logic of focusing strictly on CPMs… in 1984, over the vehement objections of everyone at Apple’s ad agency and John Scully, Steve Jobs insisted on blowing the entire $800,000 broadcast media budget for the introduction of the Mac one one Super Bowl commercial at the beginning of the most desirable (and expensive) pod. The primary target of the campaign was initially corporate IT decision makers. A media buy reaching a smaller target at an extremely lower CPM with multiple exposures, mostly on the business segments of nightly news at low CPMs, was what was recommended. Jobs didn’t listen, and achieved his goal of reaching the largest audience of the year in the US at the top priced CPM within of the highest priced CPM show of the year. 1984 is still considered by many to be the best TV ad and smartest media buy ever.

https://www.nytimes.com/1984/01/23/business/advertising-the-other-superbowl-ibm-vs-apple.html

But there are other metrics in the digital media equation that Brad didn’t even mention that are not in the scope of traditional media that will be even bigger factors when autonomous cars roll out:

Cost per click (CPC)

Click through rate (CTR - the % of ads clicked on based on the number of ads served)

Revenue per thousand (RPM - all the ads from one advertiser on a page count as one ad)

Cost per engagement (CPE - the ads that expand as you move your mouse over them or you scroll down. You pay less or nothing at all of the ad doesn’t expand)

Active View - if an ad is at the bottom of a page and the visitor doesn’t scroll all the way down, you don’t pay

Earnings per click

IMHO, it doesn’t make sense to make predictions about profitability of advertising in robo taxis unless you consider at least the many variables we know about today.

Marilyn

30

For advertising, yes, but since the robotaxi pricing will essentially be by time, the advertising metrics have to be set against time to be evaluated effectively. In essence, how much value is there in the advertising that can be presented in an hour of driving against the $20 it costs to do that driving?

What I thought was most interesting was the idea that businesses might provide free robotaxi trips to customers much the way they provide free parking today.

31

On May 22, 2018, at 10:14 AM, Adam Engst <tidbits-talk@talk.tidbits.com

I had a feeling you would have opinions about this, Marilyn. :slight_smile:

I’ve got even more opinions…

"Free ride to the sponsor’s establishment

“Much more likely will be sponsored rides with a specific goal. A nice restaurant might offer free taxi service to and from the restaurant. It’s not going to be expensive to offer this. This might be particularly appealing for bars – eliminating drunk driving risk, as it could. It’s possible that offering such a free ride might become an industry standard – if all the other bars offer free rides, you might have to as well. It will be a good way for ride companies to lock in business by making exclusive deals with particular locations.”

I think that Rolex, Apple, Burberry, etc., etc., would gladly pay a fortune to advertise in for hire robo limos that would escort guests to the next royal wedding, resort or hotel owned by the POTUS, Oscars, Emmys, Cannes Festival, fashion week, etc.

For families and individuals going on a trip or vacation, a ride in a basic model robo taxi offers a ton of targeted opportunities timed not just to the destination, but also linked to the time of day, whether or not someone paid for admission to something. Even if someone or a group is just going to a movie or a show, the opportunities to reach a targeted audience at the right time and the right place are endless.

“Stores might have a harder sell. Most people like to visit more than one store on a shopping trip.”

I can’t believe the author even said this! Macy’s, Target, Bloomingdales, Kohls, etc. have been tracking what I buy and haven’t bought for decades. In addition to what I’ve bought online, they have in-store NFC and beacon data about where I’ve been in their stores.

“Malls could make a comeback in this way. With bars and restaurants, you know people are going to eat and drink, and can even insist on it: “Free ride if you order food.” With a store, a person might take the free ride, browse for 5 minutes and head to their real destination. Stores can’t easily force you to buy.”

Not likely as the tendency for shoppers to check stuff out in a store then buy it cheaper online keeps increasing. What robo taxis can help with is making it cheaper and easier to commute and travel around town, benefiting suburban and exurban residential and commercial real estate as well as restaurant and service establishments more than malls

“I have suggested that the neighbourhood elevator – a local shuttle to bring neighbours to the shopping street – might well be free and sponsored by the merchant association. That’s an easier sell than a ride that binds you to a single store.”

This isn’t even clever enough to be sarcastic. Digital and audio elevator ads were tried decades ago and flopped across the board, so it isn’t even knowledgeable.

If a mall, or a group of stores in an area, wanted to increase foot traffic, they can easily set up a fund to subsidize free robo rides. Or a store can do a free ride with purchases of $100 or more on your store card. No pay, no free ride.

Marilyn

32

This sound horrific. Please let there be a way I can pay to not be assaulted by these vultures.
James Arnold

33

It depends on how each company offering robo taxi rides is structured. Waymo, in particular, will be feeding a wealth of data into Google that will benefit all of their advertising and subscription based businesses, like Alexa does. They’ll make money off of it even if they offer free rides and don’t sell any advertising in vehicles at all. Selling ads that are delivered in robo taxis will probably add at least a few hundred extra million $ a year in profits for starters.

I agree with the consensus in the press that Moviepass is not likely to make it, though Cinemark is doing well with a $9 a month plan for 12 movies a year at its own theaters:

https://www.bloomberg.com/news/features/2018-05-16/with-vultures-circling-moviepass-still-believes-in-a-happy-ending?utm_campaign=news&utm_medium=bd&utm_source=applenews

I also think that Spotify ultimately will end up in the same boat as Moviepass, but Apple Music will not. Apple Music doesn’t have to turn much of a profit, if any at all, but heavily indebted Spotify is an independent, and now publicly traded company and needs to do so in a market in which this is unlikely to happen. A Waymo taxi service would be very profitable for Google.

Marilyn

34

Same here.

To a certain degree I believe we have alternatives. You can chose to buy something where you pay upfront for it instead of through your personal information or through ads. I can buy my online newspaper and then run an ad-blocker, I can pay for an iPhone instead of getting a spyware-loaded cheap Android, I can pay for my ride rather than take the free one where I get spied on and have to endure a whole bunch of advertising.

To some extent I believe we have ourselves to blame for all the spying and ads everywhere these days. For some reason people started believing stuff should be free. Instead of paying for software, people want adware. Instead of paying for webpage hosting, people want a free page on Facebook. Instead of buying music, people wanted to stream it for free. Instead of renting a movie for $5 people wanted to see if for free on Youtube (while selling themselves to Google). Free is only great if you disregard the consequences. And when you put a $ sign on the consequences, the "free’ stuff doesn’t look great at all anymore.

I don’t work for free, I won’t expect others to do so either. I’ll pay for what I want, I’ll safeguard my privacy, and I’ll sure as heck refuse all this ad-loaded junk. The world works just fine without Facebook or Google. It’s those guys that want you to believe otherwise. Just chose not to.

35

I’ll bet that privacy will be a huge selling point for Apple autonomous driving systems.

Marilyn

36

All very interesting, Marilyn.

As someone trying to disentangle from the Google-Facebook-Amazon model (and finding it hard) I would be one of those who like to pay for what I get.

37

A post was split to a new topic: Amazon pushes facial recognition info to police

38

Some interesting thoughts about robo-buses and public transit.

39

Some smart thinking alright. I hadn’t considered his point about where the intelligence lies and how endpoints provide flexibility. I guess a counterpoint is that you can build upon a guaranteed use case and that transport isn’t, well, everything.

In Dublin we have light rail, trams, bus + taxi lanes and regular roads. The urban development that occurs along the tram lines is very tangible, whole swathes of the city have opened up and new enterprises and housing have grown.

But back on our topic, robocars certainly fit the model of well-behaved, or at least, predictable and controllable transit. Personally I think that robocars will be all that is permitted within urban centers beyond regular transit.