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Politics

Self-driving firms to California: Let us charge, or you'll fall behind

Limits on charging customers could change as state regulators consider updates to the rules for AV testing.

A Zoox car in San Francisco

The California Public Utilities Commission is considering updates to its rules for self-driving vehicle testing.

Photo: 615 Productions

When Cruise Automation recently won a permit to carry passengers in the self-driving cars it's testing in California, the award came with a caveat: The General Motors subsidiary can't charge fares.

More than 60 companies, many based in Silicon Valley, can now test autonomous vehicles in California, but most of their riders have been their own employees. When it comes to testing paid services, the state just doesn't allow it — a frustration for firms in an industry that faces hard questions about near-term funding and long-term prospects. Partly as a result, the testing is happening in places like Arizona — where Waymo announced a delivery experiment with UPS — as well as Nevada and Florida.

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All that could change depending on what the California Public Utilities Commission, which is considering updates to its rules for self-driving vehicle testing, decides after its Friday deadline for input from companies and other stakeholders.

"Fares are a critical component of any pilot program," Candice Plotkin, lead counsel for regulatory policy at San Francisco-based Cruise, wrote to the commission. She said the same thing during a public CPUC hearing in October, which brought together representatives from AV companies Waymo, Aurora, AutoX, Pony.ai, Voyage and others. The companies say they need to collect data to figure out if they can create a viable market for their services. Besides that, they want to defray some of their costs.

The larger question is whether California risks being left behind in the AV industry because it won't allow for paid testing while the industry is in pilot stage. Complicating matters is the fact that two agencies make the rules: the DMV for the vehicles, and the CPUC for passenger services.

"Regulatory certainty" is one reason Foster City-based Zoox was looking to test its autonomous technology in Nevada, Bert Kaufman, the company's head of regulatory affairs, told the commission at the October hearing. He said it would help "knowing that California is actually open for business." George Ivanov, Waymo's head of policy, said that, "Until there's a commercial path, our work in California is really focused on providing a limited pilot."

But it's difficult to square the well-funded companies' rationale, said Jason Levine, director of the Washington, D.C.-based Center for Auto Safety. He said in an interview that while he understands companies may want to recoup some of what they spend, "That's the cost of doing business. It's hard to feel sorry for Silicon Valley venture capitalists who have chosen to invest $80 billion in technology that probably shouldn't have deployed as quickly as it has."

The CPUC is also considering whether to create a separate rule-making category for AV passenger services; allow fare-splitting or pooling of rides; require more data collection; establish emissions standards; and more. A couple dozen stakeholders, including six companies with permits to carry passengers, have sent hundreds of pages of written input. Others that have filed responses include business groups, chambers of commerce, municipal transportation agencies and advocacy groups.

The submissions will be reviewed by administrative law judges and the CPUC before the commission proceeds with its rule-making, according to an agency spokesperson who would not comment on a possible timeline.

"I have full faith that the CPUC understands the importance of companies being able to commercialize their technologies and will move quickly to ensure Californians will be able to benefit from AV services," said Justin Erlich, vice president of policy and legal at Voyage, a startup that's testing offering autonomous rides at retirement communities in San Jose and in Florida.

Erlich, who attended the October hearing, told Protocol this week, "As we think about where to expand our service once we've gone fully driverless, we will certainly take into account our ability to collect revenue."

Waymo has also been running an AV service in Phoenix for the past year, with about 1,500 riders a month. Some of its rides can be summoned by app through a deal with Lyft, which also partners with auto and mobility company Aptiv for AV rides in Las Vegas. The big ride-hailing company said in comments filed with the CPUC, "Significantly, the inability to collect a fare also prevents companies conducting testing from defraying a portion of the cost of that testing."

Levine said, "It's hard to imagine you need people to pay … to accurately report their reactions to use of the technology." Sven Beiker, a lecturer at the Stanford Graduate School of Business and director of Silicon Valley Mobility, which consults with AV companies, agreed.

"I don't really see enough evidence of how paid testing would change the effectiveness and usefulness of testing," he said, praising the California DMV's effort to keep the public informed about AV testing. The DMV requires companies to file disengagement reports — instances in which humans have to take over AV systems for any reason — as well as collision reports.

The CPUC also asked for input on whether it should require pilot permit holders to provide more specific data, such as where each trip begins and ends. For the AV companies and those who support them, such as the California Chamber of Commerce and TechNet, the answer was a resounding no.

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"Should the disclosure of personal information be required — to governments, academics and others — customers may become reluctant to utilize AV services to maintain a higher level of privacy," the Bay Area Council said in its submission. Others argued that the DMV requires adequate data reporting already.

In its comments, Lyft said, "When combined with the comprehensive and overlapping regulations imposed by the California Department of Motor Vehicles, certain requirements in the AV Pilot Programs have had the unintended effect of impeding the testing of AVs in California, and therefore risk delaying the eventual adoption of AV passenger transportation in California."

People

Beeper built the universal messaging app the world needed

It's an app for all your social apps. And part of an entirely new way to think about chat.

Beeper is an app for all your messaging apps, including the hard-to-access ones.

Image: Beeper

Eric Migicovsky likes to tinker. And the former CEO of Pebble — he's now a partner at Y Combinator — knows a thing or two about messaging. "You remember on the Pebble," he asked me, "how we had this microphone, and on Android you could reply to all kinds of messages?" Migicovsky liked that feature, and he especially liked that it didn't care which app you used. Android-using Pebble wearers could speak their replies to texts, Messenger chats, almost any notification that popped up.

That kind of universal, non-siloed approach to messaging appealed to Migicovsky, and it didn't really exist anywhere else. "Remember Trillian from back in the day?" he asked, somewhat wistfully. "Or Adium?" They were the gold-standard of universal messaging apps; users could log in to their AIM, MSN, GChat and Yahoo accounts, and chat with everyone in one place.

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David Pierce

David Pierce ( @pierce) is Protocol's editor at large. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.

Power

Amazon wants to use delivery drones to surveil your house

Plus ads in AR, phones in VR, offline Siri and other patents from Big Tech.

One of Amazon's prototype delivery drones.

Photo: Amazon

It's that time of the week again. Take some time away from your busy Sunday to check out these weird and wonderful patents from Big Tech. As ever, there's a focus on augmented and virtual reality: Amazon is looking for how to advertise in AR, Facebook is looking into AR headphones, and Microsoft wants to turn your phone into a VR controller. And then there's Apple, which just wants to make your car's air conditioning a bit more enjoyable.

And remember: The big tech companies file all kinds of crazy patents for things, and though most never amount to anything, some end up defining the future.

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Mike Murphy

Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.

Politics

Pitch for federal robocar legislation: Social distance through self-driving

Autonomous vehicle companies are the latest to seek a change of fortune by branding their tech with the COVID-19 stamp of public good.

AV companies are pushing federal legislation that could accelerate the adoption of self-driving technology.

Photo: Andrej Sokolow/picture alliance via Getty Images

Energized by the sales pitch that autonomous vehicles are not only driverless but in some ways contactless, a growing number of Republicans and industry players are seeking to use the coronavirus crisis to push Congress to finally pass national rules for the technology. The backers hope a federal framework could boost investment and speed the introduction of self-driving cars, which have been stuck in a mire of regulatory, technological and safety issues.

For four long years, lawmakers have fought bitterly over legislation, hitting roadblock after roadblock amid partisan bickering: Republicans, backed by the tech and auto industries, want to cut red tape and create one overriding federal standard. Democrats, backed by safety advocates and lawyers, want to go as far as possible to ensure that autonomous vehicles are safe — and that their makers can be sued if they're not.

Before the COVID-19 outbreak triggered mass quarantines, lobbyists had begun to turn away from Congress. The Self-Driving Coalition for Safer Streets, created by Ford, Lyft, Uber, Volvo Cars and Waymo, reported no federal lobbying activity in the first three months of 2020, after spending $50,000 over the same quarter last year. Now, COVID-19 has kickstarted the conversation. AV companies are sensing opportunity in D.C. while demonstrating in real time the potential for contact-free delivery, facilitating thousands of essential deliveries in small pockets across the country.

The coronavirus crisis "spotlights a way that AVs can be a public good, in a way that nobody could have imagined even a few months ago," said Eric Danko, the director of federal affairs for Cruise, GM's AV division.

Rep. Greg Walden, the top Republican on the House Committee on Energy and Commerce, agreed, telling Protocol in a statement, "The ongoing COVID-19 crisis has demonstrated real-world applications of AV technology. Whether it be to deliver meals and packages to seniors or to support our health care workers on the front lines, AVs are being put to work." He said Congress "must create a federal framework for the safe development and deployment of AVs."

The effort is somewhat opportunistic, making self-driving companies the latest to seek a change of fortune by branding their tech with the COVID-19 stamp of public good. The issues challenging the AV movement, which could fundamentally change the way people travel, go far beyond the promotion of social distancing. Consumer and safety advocates remain broadly skeptical, and fully autonomous vehicles are years away from negotiating freeways and busy downtowns. Existing AVs are still mostly in the early phases of testing and piloting.

But an enormous amount of money is at stake: Cruise recently predicted that the global autonomous vehicle industry is an $8 trillion market opportunity.

A spokesperson for the Democratic side of the Committee on Energy and Commerce declined to comment. But consumer advocates have already started to criticize AV backers for pushing controversial legislation amid the pandemic. Cathy Chase, the president of the Advocates for Highway and Auto Safety, which includes consumer and law enforcement groups and insurance companies, criticized the industry for engaging in an "opportunistic power play" and "using a time of national crisis to advance their economic agenda."

But aides and lobbyists who have sunk years into the fight don't want to see the initiative fail yet again. In lieu of federal standards enacted by Congress, the industry worries it will have to wait years for the U.S. Department of Transportation to update its rules while navigating an increasingly complex web of state and local regulations emerging across the country. Most states have passed their own AV executive orders and laws, a fraught situation that allows fleets to test in certain states but not others. Of course, many local leaders feel they need such power to make sure self-driving technology is launched fairly and safely.

In February, Congress had, once again, seemed to be turning a corner in the battle over legislation. Aides, after a year of "four-corner negotiations" across the House and Senate, were disseminating text of what was said to be a bipartisan bill that incorporated safety measures and clarified the role of the federal government in overseeing AVs. Key lawmakers sounded optimistic about getting the legislation passed and signed into law this year. Then coronavirus hit, brushing aside talk about AVs as lawmakers churned out the unprecedented $2 trillion stimulus package and followup bills.

Nuro's R2 vehicle Nuro's second-generation R2 vehicle will deliver goods in a partnership with Kroger in Houston. Photo: Courtesy of Nuro

In recent days, however, companies and tech trade associations have peppered the Committee on Energy and Commerce with letters urging lawmakers not to forget about AVs as Congress barrels through this session. "As Congress considers longer-term solutions in response to this crisis, there is an opportunity to broaden the reach of contactless and driverless delivery," wrote Gary Shapiro, the president of the tech trade group Consumer Technology Association, in a May 5 letter to the committee. CTA has almost 2,000 members, including key players in the self-driving space: Uber, Lyft, Cruise, Nuro, Argo AI and more.

Proposed AV provisions, per drafts circulated to stakeholders, would ease a multitude of regulatory hurdles, potentially enabling companies to test and deploy tens of thousands more vehicles every year and overriding state laws. Lawmakers have not officially introduced the legislation, and the provisions they have circulated leave the most controversial issues unresolved. Though one industry lobbyist said aides are "on the verge of potentially putting a draft bill together," divisions are stark between Democrats and Republicans over interaction with state laws, rules on lawsuits and particulars of safety measures.

Though a similar AV measure passed the House in 2018, it stalled in the Senate, a sore subject for many involved. A separate bill also failed in the Senate. "Third time's the charm," said John Kwant, an AV lobbyist with Ford.

House GOP aides and industry lobbyists told Protocol the AV bill could be pushed through in one of the larger legislative packages moving this year, or as a standalone bill. Rolling the AV legislation into a larger package could make it likelier to pass — as long as the Republicans get support from Democrats. Partisan fighting over the bill has not let up, however.

"A lot of our guys are wondering, 'Why are we not moving something that everybody agreed was a good idea, saves lives and advances U.S. leadership?'" a GOP aide said.

It's been an exhausting fight. Republicans say they want one federal framework to enable more testing and deployment of AVs, arguing that the current setup hampers "innovation" and could prevent the industry from blooming. Democrats sound a far more cautious note, saying they want to ensure tough safety and liability standards before greenlighting any overriding federal rules.

In the meantime, AV makers are seeking to promote their altruistic projects. Cruise has facilitated more than 4,000 food and meal deliveries from two food banks in San Francisco since mid-April, with each vehicle staffed by two safety drivers, Danko said. "We're focused on developing the technology and playing a small part in the current crisis in terms of trying to fill an immediate need," he said.

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Emily Birnbaum

Emily Birnbaum ( @birnbaum_e) is a tech policy reporter with Protocol. Her coverage focuses on the U.S. government's attempts to regulate one of the most powerful industries in the world, with a focus on antitrust, privacy and politics. Previously, she worked as a tech policy reporter with The Hill after spending several months as a breaking news reporter. She is a Bethesda, Maryland native and proud Kenyon College alumna.

Power

Amazon has a new plan for drone home delivery: Radar landing pads

Plus, Apple patented styluses that feel like real pens; Microsoft might be reviving the ghost of AIM; and Waymo wants to protect you from self-driving car crashes.

Two new patents from Amazon could get the delivery giant closer to this kind of imagined future.

Photo: Hiroshi Watanabe/Getty Images

Another week in self-isolation, and another week of solid patents from big tech. Amazon is getting serious about automating the last leg of delivery. Alphabet is designing a seat-scrambling system for self-driving cars. A surprising number of patents discussed styluses, which may be coming back in a big way — and so might AOL Instant Messenger, too. A bunch of patents also dive into new uses for VR, which is a technology that seemed absolutely ripe to take off during this time when no one can go outside, but still hasn't. Maybe what it needed can be found in the files of the U.S. Patent and Trademark Office.

And remember: The big tech companies file all kinds of crazy patents for things, and though most never amount to anything, some end up defining the future.

Keep Reading Show less
Mike Murphy

Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.

People

A new selling point for Nuro: No-contact food delivery

Co-founder and President Dave Ferguson on coronavirus fears, self-driving vehicles and his bid to speed testing of the autonomous R2.

Nuro's second-generation R2 vehicle will deliver goods in a partnership with Kroger in Houston.

Photo: Courtesy of Nuro

With many people sheltering at home, demand for grocery delivery has skyrocketed — so much so that companies are scrambling to hire workers and keep them safe. Which puts Dave Ferguson in a unique position.

Nuro, the self-driving and robotics startup he co-founded, is poised to roll out a fully autonomous grocery delivery service in Houston in partnership with Kroger grocery stores. While the Silicon Valley company has competitors in the space, last month it secured the first federal exemption to test its vehicle, called R2. The compact, sensor-equipped electric pod will have no backup driver — in fact, it has no room for either a driver or passengers, just space for cargo.

Last year, Nuro tested autonomous delivery in Scottsdale, Arizona, with its first-generation R1 vehicle, and for the past year has been delivering groceries with Kroger in Houston using its Prius self-driving fleet, a service available in six ZIP codes. When the coronavirus crisis hit, the company, which received a $940 million investment from SoftBank last year, was weeks away from launching the R2. Now, Nuro is aiming to hasten that timeline while trying to keep its 500 workers healthy.

In a recent conversation with Protocol, Ferguson — who along with his co-founder, Jiajun Zhu, left Google's self-driving division in 2016, before it became Waymo — talked about his vision for the company, the future of robotics and automation, and how grocery delivery might fare after we are out of pandemic mode and can begin coming within 6 feet of each other again.

This interview has been lightly edited for length and clarity.

How is the coronavirus crisis affecting your business? How are you adjusting?

I think like most companies right now, we're trying to figure out a path through this where we're prioritizing the safety of our team and the community. Almost all the team is now working from home. We still have some of our operations team on the ground, performing limited delivery in Houston through our Kroger partnership. We've seen increased demand and frankly a need to get core essentials delivered. We're trying to help as much as we can.

This is a massive challenge for the country. It's also going to be a fairly long-term problem. We're trying to make sure that as a company we're part of the solution. We're trying to get our second-generation vehicle out and making a positive contribution as quickly as possible. And so we do have a very small team that is actively trying to go through the final stages of testing. One of the things that we're very excited about is we can provide true contactless delivery with that vehicle.

Has the crisis sped up your timeline?

We've been contacted by some government entities about what we can do to help. So in the last couple of weeks we've been thinking really hard and talking with a bunch of our partners about what we could do together. There's a real need for vehicles like our R2. We had a timeline where we were looking at deploying it in a matter of weeks. When the crisis hit, we tried to take stock and figure out: How do we provide a strong contribution to the community while also managing the health and safety of our team, which is of paramount importance to us?

We obviously designed our vehicles to transport goods. Mostly that's through deliveries, whether that's with Walmart, Kroger, Domino's or other partners we haven't announced yet. Because it does provide a complete customer interaction and can transport anything, we've also been looking at other uses. For instance, can we aid some of our partners in COVID-19 testing? We could help provide contactless testing. We're trying to figure out if there's a way to accelerate some of our plans, including how many vehicles we have deployed and where we're deploying them.

What are your plans for expansion?

The only active delivery service we have right now is in Houston with Kroger. Our plan was always to scale up to the full city of Houston over the next year. We're also planning to expand with Walmart and Domino's. We've also been doing tests in Sacramento and Scottsdale. A lot of this is in flux right now; we're trying to figure out what the updated plan is. Every day we're having conversations with partners. I do hope that we have some more exciting developments over the next week or so.

Really as a company, this is core to our DNA. Our mission is to accelerate the role of robotics in everyday life. It's about being able to play a positive role in this crisis — not just lip service and not just token PR stunts.

How does the service work? Who are the people involved in getting groceries to customers?

With our R2 vehicle in Houston, a Kroger store employee will be doing the pick, pack and bagging of the groceries. The same infrastructure they use for in-store grocery pickup, they also use for delivery. They'll put the groceries in a staging area. Then a vehicle will turn up, and it will notify them. A Kroger employee loads the vehicle, then the vehicle will take off. The nice thing there, it's the minimum amount of personnel touching goods. The customer then interacts with the vehicle, which has doors that open automatically. The customer can use a touch screen or phone app. With the phone app, you don't have to touch anything. You just grab your groceries. It's truly contactless.

Let's talk about why you and your co-founder decided to leave Waymo and strike out on your own, and why you decided to start with driverless deliveries.


Nuro co-founders Dave Ferguson and Jiajun Zhu Nuro co-founders Dave Ferguson (left) and Jiajun Zhu worked together at Google's self-driving division before founding the Mountain View startup in 2016. Photo: Courtesy of Nuro


JZ and I have been working together for nine years now. We worked together at Google for about five and a half years.

If you look back over the past 30 years, we've seen a tremendous amount of transformation in the digital world, in how we produce and consume information, everything from the internet to smartphones, laptops, computers, all the rest. But if you look at the physical world, we've seen far less innovation. Our day-to-day life, and interaction in the physical world, is not that changed relative to 50 years ago. We still drive cars that look similar. We sit around the same tables, desks, chairs. Everything is relatively manual.

What we felt very confident about was that in the next 30 years, we're going to see massive transformational change in the physical world — and we're going to see it through the advent of intelligence agents, like robots. So we wanted to play a key, positive role in helping bring about that transformation, because we also saw the potential that this wasn't all going to be positive.

When we started the company we weren't sure what our first application was going to be. We thought about a ton of different things, everything from automated manufacturing to home assistant robots, and we landed on last-mile goods transportation. It was this really compelling juxtaposition of a massive need with technical readiness, and a huge market opportunity as well.

In the U.S. alone we take 400 billion personal vehicle trips a year. Clearly that's a lot of trips, and this is one of the reasons why people are so excited about self-driving tech in general. Couldn't we make it safer and more convenient, and give that time back if we had the car drive itself? One of the nuances we saw was that 43% of those trips are for shopping or running errands. If almost 50% of trips could be replaced by vehicles running errands for us, we could not only regain an hour of leisure time a day, we could also make roads safer.

What is the proper place for robots and automation in society, especially at this time?

I don't think any of us except Bill Gates really thought deeply about the consequences of a pandemic, and how it would change the way that we think about things. But in this context, services like contactless delivery through robotics suddenly have a real tangible value that frankly probably wasn't there three months ago. Automation as a potential hedge to our existing workforce, when for whatever reason that workforce is stretched thin, is something we're going to be thinking about a lot more as a society in coming years.

One of the things that attracted us to goods transportation is that we do care a lot about what sort of impact we're having on society. When you think about automation and the future of work and what role robots play — are they taking jobs? Are they contributing or are they detracting? It becomes tricky to figure out a path that is very clearly purely beneficial.

What really attracted us about last-mile goods transportation is that we're very, very confident that this is going to be a net increase in overall jobs. We're dealing with markets that are very nascent right now. We also felt we could work with local businesses to help extend services they provide.

What does the current demand for online grocery delivery — which has had an interesting and troubled history — say about the industry's future?

The grocery industry is a roughly $850 billion market in the U.S., and today about 3% of that is online and delivered. The main reason is really cost. It's far too expensive for the average American to pay to get groceries delivered. [Nuro charges $5.95 per delivery.] However, they all want it. Studies have shown 90% of Americans want it, if we could overcome the cost hurdle. If we can make this cheap enough that the average American can afford it, it can make their lives better.

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Levi Sumagaysay

Levi Sumagaysay (@levisu) is a former Silicon Valley reporter at Protocol. Previously, she was a tech reporter at The San Jose Mercury News, where she covered everything from artificial intelligence to IPOs, tech culture, news about big tech, and more. Levi has edited or written technology news since the first dot-com boom, and was for a time the writer of Good Morning Silicon Valley, one of the earliest tech blogs/newsletters.

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