BlackBerry’s QNX division already makes the operating systems that power many cars today, and it’s just announced a new version of its OS for cars titled QNX Hypervisor 2.0. The key selling point of the new version is that it better partitions the safety-critical and non-safety-critical elements of the OS and the services they support in order to both prevent localized glitches from crippling the whole car and also insulate safety-critical functions from hacks that penetrate, say, the infotainment system. The implication of both of those, of course, is that there could be glitches or hacks that would penetrate certain systems, which seems a realistic if not a heartening concession. But as Android and other operating systems make their way into cars, being able to separate functions relating to driving tasks from those that merely deal with infotainment and other elements of the in-car experience is going to be increasingly important, and BlackBerry/QNX is emphasizing that element. I also wonder if it means QNX will be more able to operate as part of a hybrid operating system environment within cars, where infotainment features might be powered by the new version of Android for center consoles while driving features are still powered by QNX.
One of the best recent examples of the fragmentation that still exists within Alphabet and even within Google specifically is the fact that Waze, the navigation app acquired by Google a couple of years ago, has been working on what’s effectively a ride sharing service, and that it’s been doing so entirely independently of any other part of Alphabet or Google that’s working on related services and technology. It grew entirely out of Waze engineers’ desire to do something interesting rather than out of any strategic imperative from Alphabet management, which means that Alphabet’s Waymo has launched a test of a self-driving ride sharing service while Waze is expanding its Carpool service and the two have nothing to do with each other. To focus on Waze for a minute, it had previously launched its Carpool service in the Bay Area, and now is expanding it to the rest of California. But it’s still more of a true ride sharing service than most of the other services that get painted with that label – this is intended purely as a way for people to literally share rides to places one of them is already driving to, and to help split the driver’s gas money. As such, it also hasn’t generated revenue for Waze, which has merely passed along the entire IRS mileage rate to the driver, so it needs to find some other way to make money, and it looks like that might at least in part be showing ads to users of its app. It’s ironic, then, that even though the interesting disruptive transportation technology has no connection to the rest of Google or Alphabet, but its business model might end up borrowing quite a bit from its parent.
This comparison leaked earlier in the week but Tesla has now made it official by posting it on its website (and Elon Musk pointed to it in a Tweet overnight). The only reason I’m including it is here is that it’s a great illustration of the hole Musk dug for himself with his puerile naming strategy for the Model 3 (he originally intended to name it the Model E, making the three current models the S, E, and X, but Ford objected so he flipped the E to a 3). That strategy has led many people to believe the Model 3 is the third iteration of the Tesla and therefore better than the other two models on offer, something Musk has been somewhat frustratedly trying to rectify for the last few months. This comparison, therefore, which is coming out months if not years ahead of the actual availability of the Model 3 to new buyers, seems almost entirely designed to clarify that confusion. Even the introduction makes the point Musk has been hammering home via Twitter recently: “Although it will be our newest vehicle, Model 3 is not “Version 3” or the most advanced Tesla”. All the specific side by side comparisons make clear that the Model 3 is indeed substantially inferior to the Model S – slower acceleration, shorter range, paid versus free supercharging, smaller passenger and cargo space, and so on. Again, this problem is entirely of Tesla’s own making, but also reflects an old problem in the tech industry: the Osborne effect, in which announcing a new version of a product while still trying to sell an earlier one reduces sales of the one currently available. This is just a unique spin on that particular problem given that the Model 3 isn’t actually a successor to the Model S.
It might seem odd at first glance that I’m covering an auto industry leadership change, but it’s news that’s very much in keeping with the “Tech Disrupts Transportation” narrative here on the site, and the nature of both the troubles that prompted the move and the move itself are reflective of that trend too. Mark Fields, who has been CEO for the last three years, is being replaced by Jim Hackett, who has been running Ford Smart Mobility. Although this New York Times piece and others this morning are focusing on the fact that FSM and therefore Hackett has owned Ford’s autonomous driving initiatives, that’s only part of its remit, and that’s worth noting. It also owns in-car connectivity, mobility itself (which is the industry term for ride sharing and other new ownership and other business models for cars), and data and analytics, among other things. In other words, with the exception of electrification, it has owned essentially all of what’s next in the automotive industry. That Fields would have put all that in a separate division is perhaps the biggest sign that he underestimated how central these changes would be to the future of the company, and it also makes sense to put the guy who’s been running all that in charge of the company at this point. Hackett will need to bring these initiatives to the forefront of what Ford does, along with electrification, where it’s moved more slowly than other car companies, if he’s to help turn Ford around. But he’s taking over at a really tough time in both the company’s history and the US automotive industry.
★ Waymo and Lyft Partner Over Self-Driving Cars (May 15, 2017)
The New York Times reported last night that Alphabet autonomous driving unit Waymo and ride sharing company Lyft are partnering around self-driving cars. There aren’t many details, but it’s worth noting that Lyft already has GM as an investor and partner, and GM has its own autonomous driving technology through its Cruise Automation subsidiary. But the brief Lyft statement on the partnership described Waymo’s technology as the best out there, which certainly matches my own perception but likely wasn’t well received at Cruise. But the partnership is a concession by Lyft that it needs its partnerships in autonomy to move much faster to compete in autonomous driving with Uber, which of course is developing its own technology, and a concession by Waymo that it likely won’t be building a ride sharing network at scale on its own. Even though the situation is complicated somewhat by Alphabet’s investment in Uber through GV, Waymo and Lyft certainly have a common enemy in Uber at the moment, and joining forces makes a ton of sense. Waymo has the autonomous technology but not ride sharing expertise or scale, while Lyft has the ride sharing scale but no expertise in autonomy. As I’ve said before, though a number of tech companies are trying to play in one of the three major shifts in transportation – autonomy, electrification, and mobility as a service – few are serious players in more than one of those domains. Partnerships are therefore going to be key for most of them, although acquisitions (including a possible eventual Waymo-Lyft acquisition) would be another eventual outcome.
Weekly Narrative Video – Tech Disrupts Transportation (Apr 29, 2017)
Apple has filed a letter with the California DMV requesting some changes to its reporting requirements for the testing of self-driving cars as well as some of the definitions it uses, in response to a request for feedback from the DMV in March. Apple formally received permission to test its cars a couple of weeks back, and is now taking a more active role in helping to shape policy around the topic, partly because at the end of the year it’ll have to report its performance to the DMV and the public. Apple’s biggest request relates to the reporting requirements for disengagements, the name given to a situation in which a driver has to take over from the autonomous system. Apple wants the definition of a disengagement to be narrowed to include only those necessary to avoid either crashes or traffic violations, and to exclude cases which are pre-determined (such as driving through a construction zone) or for which the technology explicitly isn’t designed. That would have the effect of reducing significantly the number of disengagements reported, which would further Apple’s stated goal (as outlined in the letter) of increasing public confidence in autonomous systems. It would also have the side effect of making Apple’s first year of testing look better than the first years of other companies which began testing earlier under the current definitions. The other changes Apple proposes are relatively minor and mostly appear intended to provide greater clarity and remove unintended restrictions on reasonable testing.
via CA DMV
SiriusXM Buys Car Dongle Company Automatic for $100m (Apr 27, 2017)
I’m on record as being very skeptical that Tesla can achieve its production targets for the Model 3, given both its patchy track record on meeting such targets in the past and the massive ramp the Model 3 production schedule entails. This report from Reuters suggests that Tesla is banking in part on an unusual strategy for manufacturing, under which it will move straight to ordering and installing the final assembly line tooling, rather than testing the manufacturing process with “soft tooling”, which is easier and cheaper to replace if something’s not working. That skips a stage in the production ramp, which should accelerate things, but will only work if Tesla’s computer modeling is effective in helping it get the tools order right first time. So it’s definitely a gamble, and one which could either pay off in a big way and allow Tesla to get to its target production more quickly, or actually delay production or lead to defects in the cars. Even with this approach to manufacturing, it’s still not clear to me that Tesla can accelerate its output fast enough to meet its targets. So while there’s some upside in that it may get somewhat closer to meeting its goals, the downside is potentially much bigger if things go wrong. What’s crazy here, of course, is that all these challenging deadlines are entirely self-imposed – it’s Tesla that insists on promising so much and then underdelivering.