Ground Transportation Podcast

Autonomous Vehicle (AV) Trends: Are Chauffeurs DOOMED?

• Ken Lucci & James Blain • Season 1 • Episode 45

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Robo-taxis going mainstream may happen sooner than you think...

In this episode of the Ground Transportation Podcast, Ken and James discuss a groundbreaking announcement regarding the latest advancements in AV (Autonomous Vehicle) technology, referencing key players like Waymo, Tesla, Lucid, and Nuro. 

The conversation covers the exponential growth predicted by Moore's Law, the competitive landscape, and the significant technological advancements driving the industry forward. They also highlight real-world applications and future opportunities for fleet operators, touching on topics such as the impact on the luxury transportation market and the potential for AVs in specialized environments like university campuses. Tune in to stay ahead of the curve in the rapidly evolving world of autonomous vehicles, and the potential impact on the transportation industry.

CHAPTERS:
00:00 Welcome
01:40 Waymo in NYC
02:31 Moore's Law
06:31 Different Types of AVs
16:55 The Fate of TNC and Taxis
18:43 Effects on the NEMT Space
21:00 Google and Fleet Operations
28:46 Uber Announcement
39:47 The Possible Benefits From AVs
48:36 What Operators Can Do Today
52:00 AV Predictions

At Driving Transactions, Ken Lucci and his team offer financial analysis, KPI reviews,  for specific purposes like improving profitability, enhancing the value of the enterprise business planning and buying and selling companies. So if you have any of those needs, please give us a call or check us out at www.drivingtransactions.com.

Pax Training is your  all in one solution designed to elevate your team's skills, boost passenger satisfaction, and keep your business ahead of the curve. Learn more at www.paxtraining.com/gtp

Connect with Kenneth Lucci, Principle Analyst at Driving Transactions:
https://www.drivingtransactions.com/

Connect with James Blain, President at PAX Training:
https://paxtraining.com/

James Blain:

Hello everybody and welcome back to another exciting episode of the Ground Transportation Podcast. Today we are absolutely going to nerd out on autonomous vehicles. I, have heard people say it's not coming. We've got 10 years. We've got this, we've got that. There was a huge announcement today, and we're super excited to talk about it. us always. I am with my amazing cohost, Ken. Ken, I know you're just as excited about this one as I am.

Ken Lucci:

I, I am because every single day the data, platforms that we use, um, you wanna talk about nerding out on, uh, Bloomberg Terminal on our Dow Jones, Factiva on, d and v Hoovers on PitchBook. I have alerts sent up, set up alerts for every possible subject that I wanna look at, including autonomous vehicles, electric vehicles, and the specific companies. So every morning. I started this a year ago with these databases. Maybe once or twice a week I'd get stuff on avs, autonomous vehicles. Now I'm getting three or four news stories and analyst reports a day.

James Blain:

Yep. It is hot.

Ken Lucci:

Red hot.

James Blain:

And I think, you know, we've got an announcement that we'll cut to here in a little bit, but I know that we've had the news Waymo's moving into New York. That was a recent one. We've got

Ken Lucci:

Yep.

James Blain:

just broke today that we'll talk about in a second. There are so many things happening in that space I think people have kind of made this, I call it an underestimation. Like people think that in the tech world, things move on kind of a straight line. If I tried it today and it sucks tomorrow, it's gonna suck. But tech leaps and balance,

Ken Lucci:

that law they call it? What's that law?

James Blain:

Moore's law? I think is what you're talking about. So of of course, the resident nerd.

Ken Lucci:

wait a minute. You've cemented yourself in my mind as a techno nerd. I want you to explain to the studio audience, wait a minute, we have no studio audience to the audience what that law is. Please take your time and explain it because it's

James Blain:

All right, Moore's Law basically explains that you're on an exponential scale when it comes to the power of computing. So when we're talking about a computer chip and you know, you think of, for those in the audience, you're probably all, remember the days when we had like Pentiums, I have the penem one, I have the PENEM two. Now we have, you know, the core I seven, the core i nine. Apple has M two, And four. What Moore's Law says that. It's going to double. So, you don't go from going, zero miles an hour to one mile an hour to three mile an hour. You start really jumping and that's why if you start looking in computers, start seeing, you know, you might have, back in the day we had 64 megahertz and then it was 128 and then it was five 12 and then, you know, it just keeps by doubling. And so roughly, depending on which version of that you wanna apply, basically what it's saying is in our, a cycle of, of roughly six months to a year or so, computing power doubles. And so when developers, when tech people are planning stuff, it basically tells me that if I know I'm gonna need twice as much computing power and tech power to do this as I currently have is currently technologically available. I just have to get working on it now. Knowing that the power I need, the computing power I need will catch up because it's doubling, incrementally going up. And that's exactly what I was talking about a second ago. Just'cause something was here yesterday doesn't mean it's gonna do a linear jump. We saw it happen with ai. AI is just absolutely bounding all over the place. It's

Ken Lucci:

So, just to reign you in a little bit, Moore's Law is not just a computer about a computer chip, it's about technology advancement in general.

James Blain:

in general.

Ken Lucci:

Yes. So let's, let's put this into some reality. Transports 250,000 passengers a week with 1500 robo taxis, and they are doubling the passenger service every five months. Whereas when they started, it was tiny. To James Point, when technology reaches a certain point. It exponentially grows in an extremely short period of time, and we're getting damn close to that exponential growth on the AV side.

James Blain:

And there's something I think we need to really point out that a lot of people aren't grasping. These companies are data companies. So you know, I've ridden in Waymo's, I've ridden in self-driving vehicles. I'll give you a great example. And, my buddy down the street has a Tesla and he's part of the full self-driving beta. You know, we're, I'm a hockey player, so we're going to the hockey store. He put, I said, Hey, you got the full self-driving. let's, see what he can do. He puts it in full self-driving mode. It backs outta the driveway, it starts driving. We get off the highway and there's a no turn on red and it tries to run the no turn on red. And I go, ah, got it. It's not ready. He goes, oh no, no big deal. pushes the little round part on the string wheel, holds it down, and it goes, record your message for the developers. And he goes, Hey, this was a no turn on red. It didn't identify the sign it tried to make a right on red here. this is something that you guys need to look at to fix. And I said, wow. How long's that gonna take? And he goes, it'll probably be next week the next time I drive through here. It won't do that. Now.

Ken Lucci:

so let's, let's

James Blain:

like that easy.

Ken Lucci:

st Wait, wait a minute. Stop there because you, you've hit upon something that I don't think anybody knows.

James Blain:

Yeah.

Ken Lucci:

Teslas are recording data and recording pictures.

James Blain:

cameras.

Ken Lucci:

It's covered in cameras and it's sending them back to Tesla.

James Blain:

Yep.

Ken Lucci:

That data. Okay, so, so let's just set the tone for a second.

James Blain:

Yeah.

Ken Lucci:

everybody in the industry should know about Waymo, if you don't. Waymo is owned by Google. They operate a fleet of Jaguar SUVs that

James Blain:

E Pace Jaguars.

Ken Lucci:

He pays jaguars that have all kinds of technology. Waymo, te uh, Google Technology on it, and it's LIDAR based AV technology.

James Blain:

Yep.

Ken Lucci:

Tesla, uh, just launched their robo Taxii service in Austin, Texas. Oh, by the way, Waymo is in Phoenix,

James Blain:

Yeah.

Ken Lucci:

Francisco, LA Austin, and they are mapping 12 other cities, including New York, Boston, and Philadelphia. This summer. Their goal, Waymo's goal is to double their size of their fleet by the end of 2025, beginning of 2026,

James Blain:

They want

Ken Lucci:

te

James Blain:

major metropolitan areas.

Ken Lucci:

all of them. Then you have Tesla's Robo Taxi. These are the two bigs in the United States, but it doesn't end with the United States. Tesla. Talk about if Waymo uses Lidar r. Talk about lidar, not that I expect you to be an expert, but, and then talk about what you understand the Tesla, uh, how the Tesla operates

James Blain:

Okay, so you've got a couple things there. Right? This is one of the few times that being in training and having a tech background pays off.'cause we can, we can bring these things down

Ken Lucci:

and being a nerd.

James Blain:

nerd, right? Being a nerd doesn't help. Right.

Ken Lucci:

Yep.

James Blain:

here's the thing. LIDAR is light-based radar. We are sending out light pulses. We are measuring the way they get back and they're using it. radar uses the same thing, only radio waves. So At like radar guided crews, laser-assisted crews, um, of the, those technologies are using that. It's the exact same technology on the laser side, if you've ever seen one of those laser measuring tapes where you put it on the wall, you push the button and it magically tells you, right?

Ken Lucci:

back to avs. Yep.

James Blain:

doing is we're doing this on a big scale. So lidar, same thing that's on your iPhone. We're putting out all these light pulses and we're using that to take measurements of the real world. And we're using that to create a 3D map of the real world. When you have camera works the same way as your eye. We have two eyes in our head because we have to use those two points of view to give us depth perception. That's how you know how far something is. Your brain compares your left eye and your right eye, and it knows the difference between it. Since we're born, it just automatically does that, and that's how you know how far away something is.

Ken Lucci:

And that's how Tesla operates with cameras.

James Blain:

how Tesla operates. But

Ken Lucci:

Okay. So we have Lidar. Lidar. is coke. the Tesla camera and AI is Pepsi. To me, that's,

James Blain:

that's it's an oversimplified. It's an orange and an apple,

Ken Lucci:

That's the way my mind works because I'm oversimplified. Keep, so keep going.

James Blain:

think about it more like an orange and an apple, right?

Ken Lucci:

Okay.

James Blain:

has their advantage, each has Each has their

Ken Lucci:

But explain the Tesla camera and AI concept as opposed to the lidar

James Blain:

So here's the thing. In the beginning we had lidar and camera. We're taking two different readings. We're comparing them to each other, and we're using that now as humans. I mentioned the two eyes in your face. Typically, a lot of these systems have one or more cameras that they're using to try and map stuff out, obviously there's some tech there that your brain can't do that. It can't. But at some point Elon decides, yeah, we're not gonna do LIDAR anymore. We're gonna cut those sensors out. Our cameras are good enough. We're visually seeing good enough. That's what humans do anyway, so they go to a non LIDAR model. If you start looking at Waymo, if you start looking at these vehicles that kind of have the sensor arrays all over'em, the little spinning thing on the top, all of gonna be your LIDAR and other sensors. Again, oranges and apples. Tesla has done a really good job of getting the camera to work by processing it and the whole thing is, and I, I won't jump the gun on this, but what you have to understand we're at really kind of a central point where certain technologies have all merged and come together. got 5G internet, which is fast enough now an LTE, which was kind of its predecessor, which is fast enough down to do a lot of realtime data stuff. You've got arm processing and you've got processors that do a lot of work with multiple tasks at the same time while using very little power. This is your Apple M1 through M four chips. Those are arm,

Ken Lucci:

by the way,

James Blain:

go ahead. I.

Ken Lucci:

Tesla's data. getting back. Is the Tesla vehicle data getting back to Tesla using 5G or some other way?

James Blain:

So it's gonna send data with whatever connection it has.

Ken Lucci:

Yep.

James Blain:

when they started this 20 years ago, my grandfather who worked for Jet Propulsion Laboratories, the think tank of NASA, did a joint process. They did a, a joint program with the Department of Transportation. And back then we were putting the tech in the road. You just, you, the computer processing power needed was so big it wouldn't fit in a car.

Ken Lucci:

sure.

James Blain:

what did they do? They started embedding magnets in the road and

Ken Lucci:

Yeah, I remember that.

James Blain:

yeah. So basically at this point, we're making road trains. It's

Ken Lucci:

Yep.

James Blain:

the magnets like tracks. And then at that point, I don't really have to worry what's around me. I just at that point have to worry, okay, am I gonna hit something and be looking out? And if I hit something, I slam the brakes. We're not talking about having to worry about changing lanes, all these other things. Back to kind of that point I made, as we've seen computer processing and all of these things get faster and more compact, and Moore's law has taken that computing power and shot it to the moon, right? For those of you that don't know, speaking of moonshot, you have more processing power in a calculator than we had to get to the moon back in the sixties. So now we can take that and it actually fits in the car. So the idea here is really simple. We cover the car and sensors. We have this thing in there, and now we're mapping it out. This third magical element comes into play in about 2020. already had ai, not in the way that we know it, but in the terms of learning and

Ken Lucci:

Sure.

James Blain:

data

Ken Lucci:

Yep.

James Blain:

In 2020, they make these giant leaps in ai. We start seeing the chat, we start seeing the modeling, we start seeing all of these multi-layer ais like we never had before. So now I can take these massive amounts of data, I can extrapolate the information, I can get a model of it, I can get it to fit in a computer in the car. now that car having the right sensors can drive. I said, a lot of them are using lidar, but you've got some like Tesla that are making it work with a camera. So that's, that's kind of your playing field,

Ken Lucci:

Uh, so that's the tie in between the Tesla cameras and grok ai.

James Blain:

So yeah. So you've got

Ken Lucci:

Okay.

James Blain:

different pieces there. It's not that simple, But, you've got grok, you've got all these different ais they're using to crunch the, data. Yeah,

Ken Lucci:

keep it simple for the audience. Lidar is very intense on. The radar devices on the vehicle. whereas Tesla is using the cameras and sending the data and interpreting it in AI to do its mapping. Correct.

James Blain:

almost all the mapping is taking place on the vehicle and they're comparing GPS data with what

Ken Lucci:

Unbelievable.

James Blain:

it and doing it there.

Ken Lucci:

And you and in real time

James Blain:

to

Ken Lucci:

though.

James Blain:

up to the cell tower, you'd be toast.'cause as soon as you get a cell drop out, you're done. But

Ken Lucci:

Yep.

James Blain:

doing is it's essentially, think of it as if you're driving through somewhere new and every time you get done, everybody comes back and tells you what they learned about the new place they drove and you're making notes about it. That's

Ken Lucci:

is what I experienced on this route. And what I love about what you just said, a, as far as your buddy is, your buddy is pressing a button in real time saying, this is a problem with where we are right now. So it's, it's constantly evolving and AI is changing it. Okay. So the, the interesting thing is to me is, you know, Waymo, Waymo and Tesla are the bigs, but there are probably two dozen other companies in the United States. I'm, you know, I'll just mention one is May Mobility,

James Blain:

Yep.

Ken Lucci:

and they are, they're mounting devices on standard vehicles. But to me the, the news of AV is actually more exciting everywhere else in the world. in addition to Waymo and Tesla, there's a company, uh, called Pony ai. Now, pony AI is traded on Nasdaq. And it's United States office is out in Silicon Valley, but it's basically a Chinese company. And pony AI has massive fleets of autonomous vehicles in China.

James Blain:

Oh, China's huge in this.

Ken Lucci:

Huge. They are building EVs and avs in mega factories in China that are the size of football fields

James Blain:

Yep.

Ken Lucci:

in size and the manufacturing facilities that once manufactured cell phones are literally turning out EVs. So

James Blain:

It's the same tech. It's the same brains.

Ken Lucci:

right? Another name to watch is pony ai. So recently, pony AI developed or pony AI in China, the avs. You know, they say, well, they're all electric vehicles, and boy, that's gotta be a charging nightmare. They actually have batteries that change cells. You don't charge the vehicle. You send the vehicle back to its depot for a 20 minute change of the battery and you put in a fresh battery. It's

James Blain:

they're starting to do that like drive-through, right? So think of how you swipe the battery off the bottom of your screw gun, right? You

Ken Lucci:

yep.

James Blain:

new one in, you pull in, it's got an arm, it comes out, pulls the battery pack off the bottom, a new one on and off you go.

Ken Lucci:

So it's interesting to me how the TNCs are reacting, responding, and to figure out how to get AVS into their fleet. But let's set the tone. Waymo has its own app, Uber like app. Tesla has its own Uber like app.

James Blain:

yep.

Ken Lucci:

So contrary to what many in the limo software industry or the software providers in the limo space tell us, it's not really difficult to come up with an Uber app or

James Blain:

No,

Ken Lucci:

a universal app,

James Blain:

and they're going to do to Uber, what Uber did to the limo industry, right? That if Uber doesn't find a way to get on that same wave and ride it.

Ken Lucci:

Correct.

James Blain:

now, all of a sudden it's the, before it was, oh man, the bus is gonna hit us because it's gonna disrupt it.

Ken Lucci:

Right?

James Blain:

at this point, the taxi industry was already decimated.

Ken Lucci:

Yep.

James Blain:

some hit. The people that didn't elevate their service, that didn't actually live up to the black car standard got hit. in my opinion, if you're a taxi guy, you really gotta figure out how you're gonna

Ken Lucci:

Yeah.

James Blain:

cause this is the nail

Ken Lucci:

Yeah. It's incredibly difficult. What'll be left in the taxi space is what I call the unbankable, meaning someone who doesn't have a credit card or a debit card, someone who doesn't have a smartphone, and all of the governmental programs, whether it's local Medicaid, et cetera, et cetera, et cetera. But it's not gonna be the general public. The general public,

James Blain:

no.

Ken Lucci:

I think, would rather get into a clean robo taxi, than a standard taxi with a driver. I think that's going to be a death nail for the industry, for the taxi industry. You know, any MT give me your thought processes on non-emergency medical transportation. A big part of that service is the attendant.

James Blain:

Yeah. So, so you, we've had this conversation a lot in the NEMT space, right? I'm lucky enough to, to be a member of TTA and I, I, I sit on a committee there. On the safety side, one of the things that comes up there is this ambulatory versus non-ambulatory. And for anyone

Ken Lucci:

Yep.

James Blain:

not familiar with that, ambulatory is whether or not they're able to get into the vehicle, whether or not they need assistance. You start looking in NEMT, whether it's, curb to curb or it's door to door, um, stretcher? Look, if you are doing the non-ambulatory, which is the people that need assistance, if you're doing stretcher, if you're doing Like that,

Ken Lucci:

yep,

James Blain:

you are in a good space. It's going to be. A while before that, you know, until we get to the point where you've got the Jetsons robot walking up to the door, which Elon's allegedly working on. I, think you're all right.

Ken Lucci:

I agree with that. I think what you're gonna get hurt is, I do think that. That ambulatory is going to be hurt pretty bad,

James Blain:

and, and let's, but Uber was already targeting that, and back to

Ken Lucci:

totally.

James Blain:

earlier, Uber was already targeting that, but the way that Uber was a disruptor. The big thing here is that by having Waymo get ahead of it now, the keys to the car shift, so to speak, to Google, because Google could go out and all of a sudden your Ubers, your Lyfts, your rideshare companies are now having to compete with the largest tech company on the planet. It makes a lot of sense that Uber and Lyft and those types of companies want to figure out how to get in on this. And most importantly, their biggest issue right now is the driver, right? Their biggest issue is having inventory, having drivers. The interesting part is, and people don't think about this will be a considerable shift to their structure because they don't own metal right now. If They, go the direction of self-driving cars, now they're in the fleet game. Uber has not been in the fleet game.

Ken Lucci:

and they need capital for that, which is, the capital requirements are balanced by the fact that instead of now paying out to a driver, 70% of the trip, allegedly,

James Blain:

Allegedly

Ken Lucci:

allegedly they're gonna be able to use 70% of the trip for the av. But here's the thing, fleet operation does not begin an end with the vehicle being on the road. It's everything behind the scenes. I firmly believe, and, and, and we'll discuss, um, announcement that I think is gonna affect the chauffeur space. I firmly believe that Waymo was gonna get tired of building depots all over the place. And managing fleet. I think the fleet. Well, I think the fleet operators are in a good position if they can withstand the disruption. The larger fleet operators who have mastered how to buy, repair, maintain, and keep fleets on the road, I think there's gonna be opportunity in autonomous. and, you know, Waymo's extremely, tight-lipped about it,

James Blain:

they're Google,

Ken Lucci:

you know, the, they, they also don't have to together a p and l okay? At, at some point, even Google is gonna get tired of throwing money at this and not seeing a return on investment. Now, sadly, that can be a long time from now. Their staying power is incredible. Their staying power is even more so than Tesla. So you've got way more Tesla, you've got pony ai. You've got a, a bunch of other companies that are actually manufacturing

James Blain:

But there's a couple things there, Ken. So You've hit on four huge topics, right? So you've got Tesla that already has service centers and sales centers. already have that infrastructure now on Google's side. I agree with you, Google, I, I think it's a toss up whether or not they decide to do that. But the other thing is, if you look at like the line bikes and the scooters that we had, they a lot of times would employ people to go in at night, collect them all,

Ken Lucci:

Yep.

James Blain:

and

Ken Lucci:

Yes.

James Blain:

them back in. I agree with you. That could be an opportunity.

Ken Lucci:

the cost of a scooter to manufacture and maintain any, even if you lose them, is peanuts. Uh, compared to and Waymo's, very tightlipped about it. But the what, from what I understand, the cost of a Waymo is over 300,000 at this point. Now they have some deals going. Waymo has some deals going. The secret to Waymo is they're sitting on 3,476 patents globally

James Blain:

it

Ken Lucci:

on autonomous vehicle. So tech, so they're going to people like Hyundai and Toyota and others and putting that tech

James Blain:

there.

Ken Lucci:

in those vehicles. So I do think that eventually, I do think eventually you, if you buy a Hyundai or Toyota and you wanna deploy it into an autonomous fleet, which is what, you know, Tesla is promoting, I think you're gonna be able to do it. And I do believe the cost is gonna come way, way, way down, which we're gonna talk about in a minute.

James Blain:

And Moore's Law covers that, right? Because the computing power doubles, the cost comes down. If you Of that, look at fat screen TVs. you and I both remember. TVs literally being, five feet deep. So you could have the nice DLP projection.

Ken Lucci:

Yep.

James Blain:

go buy an 80 inch flat screen LCD for 2,500 bucks. Costco.

Ken Lucci:

And you know what? And you don't give a shit if it, at two years from now, the thing doesn't work. You throw it away. I agree with you. So when you look at the Waymo's of the world and the Teslas of the world, there's no question that they're gonna be able to deploy fleets and depot, the fleets, and maintain the fleets in major cities. The question is, are they gonna want to do it in the metropolitan areas, you know, below the top 50, or are they gonna want to have a partner?

James Blain:

it'll be, it'll be major cities. And here's the other thing,

Ken Lucci:

yeah.

James Blain:

One of the, one of the neat things that people don't think about, And the reason I brought up the scooter is that the maintenance here is minimum because, but all right, so my Jaguar epac, I'm Waymo, my Jaguar EPAC needs service. I make it drive itself to Jaguar. It's Jaguar's car, as long as it's not a failure on MI Tech. But guess what? Even if it is a failure on Miek, what do you have there? Trained guys that are used to engines, complex vehicle components. As long as I make easy to replace, easy to swap out modules that tech can swap modules all day. And

Ken Lucci:

And you're,

James Blain:

used to. Tow

Ken Lucci:

Yeah,

James Blain:

it when it breaks down.

Ken Lucci:

I was just gonna say it you're, what you're doing is your auto dealership, whoever it is, and it's pronounced Jaguar, by the way, Jaguar, Toyota, Hyundai. They become the depot.

James Blain:

Right?

Ken Lucci:

where the vehicles sleep at night. That's where the vehicles charge, to your point. So this, this evolution's gonna be interesting, but, but you know, I, I have to tell you my conversations. with operators are pretty interesting. And it almost hearkens me back to the days when I was an operator. An Uber came in and people are like, ah, they're gonna be out of business. This isn't gonna catch on. And they, you know, they're gonna have to adhere to the regulations. Right. Ex ex. Right, exactly. You know, it reminds me of when I was in the security business, one of the biggest operators that I dealt with said, oh, you know, this internet of things, which by the way, completely changed the security industry.

James Blain:

Yeah.

Ken Lucci:

Oh, this Internet of things is a fad. It's, you know, we're always gonna be running wires in people's houses. Are you kidding me? So anyway, so I've spoken to quite a few people in the industry. at the network level, you know, stakeholders in the industry, and they're like, no, no, it's gonna, it's not gonna affect the luxury space. And in my mind, listen, a lot of these people and my customers, I'm not gonna sit there and argue with them over that. I argue enough with them. OI argue enough with'em OO over their financials anyway I said I'm not, you know, I don't agree. And I say to myself, it's all going to change when somebody builds out an AV luxury model. And then it's so funny, we had Leonardo gno from Mag's, uh, on another episode, and, and Leonardo brought this up, he said, Ken Waymo is a luxury vehicle. They just didn't paint it the right scheme. And he's right. If you did a black, black Waymo. And that Waymo was cleaned between rides and it was a higher level service. It's gonna affect chauffeur, but that's, that's not the announcement.

James Blain:

you hit, so before we go to the announcement. You've hit on what I, right, and I'm in training. I come from tech. This is my world. I know this stuff like the back of my hand. I, like I said, grew up with a grandfather that literally worked on this tech back when it was smart roads. This was basically bred into me to know tech. That's my world. But one of the things you've just brought up is still need someone to clean the vehicle. If I'm going to the airport at 4:00 AM and I've got a ton of stuff with me and my whole family, and it's just the vehicle showing up, versus if I know I've got someone in town that's going to send someone that's going to take care of everything, that's going to basically now shift more to concierge role. if you are looking at autonomous and you're thinking, oh man, how do I not get hit by this bus? That's where in my mind, you start thinking is, how do I provide service? How do I make it to where I am able to the people that I have? To do things that I know even autonomous can't

Ken Lucci:

And to your point, we'll get to that because at the end of this, I am gonna make some recommendations for every operator out there. But this week, in my mind, the game changed

James Blain:

big

Ken Lucci:

and the game changed specifically with the announcement that Uber Technologies announced yesterday. That would be a Thursday that it's partnering with the Electric Vehicle Startup, lucid, L-U-C-I-D.

James Blain:

The same electric vehicles that we see in the industry.

Ken Lucci:

all right. Okay. And, and it's stock prices, LCID. And I'm gonna get to the reason why I said that. And the self-driving software company, Nuro which to me is the biggest piece of the story. So they announced yesterday. That Uber is partnering with Lucid. They're investing a few hundred million dollars in Lucid, and they're going to have 20,000 of these vehicles on the road over the next few years. And at the same time, the announcement was made that these vehicles, the fir, one of the first places it's gonna deploy is it's gonna deploy in Dubai. And then the expectation is they are going to launch 20,000 of these vehicles in quote, yet to be named major US cities. So Uber has agreed to invest several hundred million

James Blain:

I think

Ken Lucci:

of dollars

James Blain:

plus million and the,

Ken Lucci:

in Lucid

James Blain:

yeah. No, no, no. So it's, it's, yeah. It's split between Lucid and neuro and, I think

Ken Lucci:

and neuro,

James Blain:

clip we can cut to,

Lucid provides the gravity SUVs. You guys provide a part of the technology stack. Uber basically pays for everything. They've invested$300 million into lucid several hundred million dollars into you. What happens next? So Lucid is integrating Nuro's driver. Hardware components, so the sense and compute into their vehicles on the production line, those vehicles are then shipped to Uber. Uber owns and operates them, and Nuro driver's software, provides the driving capability for those vehicles on the Uber network. You have a very close relationship with Nvidia. You, you know, essentially building on top of, of what Nvidia offers. End to end. Just explain it because it seems like a bit of an unlock for you guys. This deal kind of involves Nvidia to a certain extent as well. So all of the compute on this Robotaxi platform is gonna be based on N NVIDIA's. That's the Thor chip set, the Thor, uh, SOC. That's right. And for us. For Nuro, that has dramatically simplified our overall compute, because before we had that system, we had to have FPGAs that dealt with the raw sensor data. We had to have CPUs, we had to have GPUs, we had to have safety computers. We've been able to effectively collapse all of that into the Thor, SOC. So a simplification and the complexity as well as a, a significant reduction in cost. Gravity goes into production late 2026. And thousand of them are due to Uber over a six year period. How do you get to public roads? Nuro, has been doing fully driverless operation on public roads for over five years now. So we have a lot of experience with what it takes to validate our tech and to get it out onto those roads safely. With the Lucid platform, it's obviously a new vehicle platform for us to work with. We got uh, first prototype in something like seven weeks, which is unheard of so it'd be moving very, very quickly. So Lucent's providing the sensor suite. The sensor suite is Nuro driver hardware, so it's a sensor suite that Nuro has designed, although all of it is automotive grade sensing off the shelf. Off the shelf sensing. So Nuro has basically provided a design template for that, and Lucid is going to integrate that for the prototype vehicles where we're doing small scale integration for the 20,000 fleet, it's going to be integrated directly into the production.

James Blain:

neuro was very tightlipped about the exact amount. I believe Lucid wasn't as tightlipped, but, but I, I might be misquoting that,

Ken Lucci:

lucid, look, it Lucid is not because there's

James Blain:

chunk of money.

Ken Lucci:

right Lucid stock skyrocketed 36% and let's just stop with that, where that investment was yesterday. Anyway the story to me behind this is neuro, okay? Neuro is, there's two, two guys that run neuro, a guy named Dave Ferguson and prior to Neuro, he was the principal engineer for Guess Who Guess

James Blain:

Put'em outta their misery,

Ken Lucci:

Google Self-driving program known as Waymo. Okay. He left Google to found neuro. This guy has a master's in robotics and a PhD in robotics from Carnegie Mellon and a bachelor's in Computer Science and mathematics from the University of Tonga. He also has a hundred patents to his name in a, uh, in autonomous vehicles, and he's published 60 academic papers. his partner, is a guy named John J Zoo. I'm, I know I murdered that, but I apologize. This guy was a principal software engineer at Google, one of the founders of the self-driving program known as Waymo. In addition, he, basically, I'm sorry, he earned his master's in bachelor's in computer science. From the University of Virginia and he has over a hundred patents. Also. To me, the story is not lucid and Uber. Yeah, it's a little bit Uber to me. The story is they took the neurotech, which they called neuro driver. This is the huge piece to me, and they put neuro driver in an ordinary lucid ev. Well, there's nothing ordinary about a lucid ev. They're gorgeous. Okay.

James Blain:

but they basically bolted it on.

Ken Lucci:

In five weeks. Five weeks, they had it on the road testing. Okay. That that's huge.

James Blain:

there's something there too, because on this, you, you, you've got this leadership, and we've seen this a lot in Silicon Valley. Apple had a self-driving car program. Google's had a self-driving car. They've all been fighting over who they want. They're all fighting over AI engineers. One of the big things, and neuro talks about this, if you go look at them, is neuro is using the Thor chip from Nvidia. Now, I, I don't care if you're not a tech person, anybody who bought Nvidia stock has made money on it because Nvidia is basically powering the AI movement.

Ken Lucci:

Hundred percent

James Blain:

I talked earlier about you have, arm computing, you have 5G internet and you have AI and kind of them all hitting that, that right hockey stick moment where they've all just kind of crossed in scale and power. are working very closely Nvidia, which means if they can dream up what they want it to do, NVIDIA's going to have chips they can give them and be able to for it. You've got a huge, big backing on the tech side and the ability side, and now you've got money behind it.

Ken Lucci:

So we've got the Lucid Air Sedans, which go from 70,000 to 249,000 for the high performance sapphire trim. Then you've got the touring trim, the EV model, and the touring trim starts at 78,900, and the Grand tomo trim is 110,000.

James Blain:

Yep.

Ken Lucci:

the lucid gravity is, I'm sorry, the lucid gravity is the electric SUV. It goes from 81,400 to 96 5.

James Blain:

Yeah.

Ken Lucci:

Okay. So for the sake of argument, just say that the neurotech triples the cost of that unit. You've got a$300,000 piece of equipment that. You can keep on the road. And if it does$200,000 a year in revenue where your cost of goods is 70,000, it doesn't take long to pay for that vehicle and start getting an ROI. Now, I, I also wanna share some internal news that is pretty wild. We, uh, driving transactions for the first time in the last two weeks has gotten two customers who put AV vehicles in front of us to do financial pro performance. Okay? Now what does that mean? They give us the cost of the vehicle. We do the fixed cost, variable cost, we do the revenue models. One of them is for college and university. Okay.

James Blain:

the, what's the number on those vehicles? What's the cost of

Ken Lucci:

Gotta be careful.

James Blain:

able to

Ken Lucci:

Can't say for who, but it's been.

James Blain:

one, I'll throw one out to kind of help give you that. The la

Ken Lucci:

It is three. It's, it is between three and$400,000.

James Blain:

Because now, now to give you a point of reference, when I went to I-A-T-R-A couple years ago, which those of you that don't know, that's the International Association of Transportation Regulators.

Ken Lucci:

Yep.

James Blain:

to my good friend Matt Doss, who runs that. Matt invited me out and they were doing AVS one year, and when

Ken Lucci:

You know something?

James Blain:

what

Ken Lucci:

I, wait a minute, I gotta stop you. The there,

James Blain:

okay,

Ken Lucci:

Matt Dos does not invite me anywhere. The business I've done with him, the business we do together, he's never so much has bought me a dinner. I apologize. I had to get that off my chest. Go ahead.

James Blain:

okay. Matt, if you're listening, you gotta take care of my buddy Ken over here. We gotta get him invited

Ken Lucci:

Never bought me a dinner.

James Blain:

If it makes you feel any better. The one time I could have been bought dinner by Matt, I, I missed so,

Ken Lucci:

The business we've done together, put the, probably put the deposit on his house in Florida. It's okay. I'm not bitter. I'm not bitter. Go ahead. Go ahead.

James Blain:

him on the side right now as we're recording. No, I'm kidding. No, so, so at Matt's conference, right at ITR, the number that they gave, when we asked how much a fully autonomous vehicle cost out the door, was it half a million dollars?

Ken Lucci:

Yeah, so they've even come When was that?

James Blain:

that's,

Ken Lucci:

that?

James Blain:

last year's, right? That was 2023.

Ken Lucci:

Two years ago.

James Blain:

a million dollars.

Ken Lucci:

Okay.

James Blain:

you are now telling me that you're seeing ballpark at 300,000, and this kind of goes back to that Moore's law, that

Ken Lucci:

Yep.

James Blain:

doubling, the cost is

Ken Lucci:

Yep.

James Blain:

down. The amount of power you can get is changing. It, it's going to be big. Now the other side of that that I think is really important to note here is that the big mark that is kind of sat out in the industry who will be selling autonomous. And they keep it for themselves? You've got Tesla, you've got, you know, I would expect Toyota is gonna do it. You've got some that are

Ken Lucci:

Excuse me,

James Blain:

an

Ken Lucci:

it's pronounced Toyota and it's pronounced Jaguar. You said something wacky like you. You said Ja, you said Jaguar.

James Blain:

yeah.

Ken Lucci:

It's, anyway.

James Blain:

East Coast guys, you can't, you can't understand our, our Midwestern accent I guess. But no, The whole deal there is you're that are gonna sell it. I think the big question becomes, as you talked about with the patents as you talked about, what's there, I don't see Waymo taking their foot off the gas. I don't see Uber taking their foot off the gas. I don't see any of these doing it. But I think where we may see opportunities is their model right now is going to have to entirely rely on large cities. They're not gonna be able to do small windmaster towns.

Ken Lucci:

And huge infrastructure builds. And huge infrastructure builds.

James Blain:

These are not things that I think we're gonna see mass adoption on. It's the exact same thing that we had with EVs when they first came out. You had to have charging stations, you had to have things there. And so I don't think it's gonna eliminate it. But I can also tell you there's been some interesting talk about what's gonna happen to Cruise, who we haven't mentioned yet. For those Cruise was operated by GM on a similar model.

Ken Lucci:

Yep.

James Blain:

depending on what you've heard and what you read into it, what you want to do, it, it doesn't sound like Cruz is going forward in the same way they were. And even when I was at IATR, they

Ken Lucci:

Huh?

James Blain:

sponsors there were Waymo and Cruz

Ken Lucci:

I thought they closed.

James Blain:

well, and that's where I'm going with this, right? Waymo was

Ken Lucci:

Yep.

James Blain:

Cruz was kind of lower end. But is not just gonna take everything they learned in all that tech and throw it out.

Ken Lucci:

Well, to wait a minute

James Blain:

crews, they've got pieces there.

Ken Lucci:

to your, point, to your point, for self preservation. Uber has to dive into this.

James Blain:

They don't have a choice.

Ken Lucci:

Okay. Waymo, this can be a rounding error on their p and l and balance sheet. They can do this shit for years to come.

James Blain:

Google

Ken Lucci:

Okay?

James Blain:

an entire list of projects it's spent bank on and then it's like me, it didn't work out.

Ken Lucci:

Right. But in this case, Waymo, there's nobody who can say to me that Waymo is not an initial success. In other words, you know, when you do a proof of concept, if you consider the first few cities proof of concept, doing extremely well. Now, the, the, the first ones that Waymo is displacing is Uber. There's no question about it. But if you ask the savvy operators in the cities, you know, which I have, they do believe that it's costing them some money. And when I pose the question to them. What happens if there was a category of service that was exclusive and it was a luxury piece of equipment and it was attended to in between rides, do you think it would hurt you then? And they're like, yeah, we do. We believe it will hurt us. So we've been, for the first time we've, we've been pulled into a couple of AV situations. An operator says to me this week, well, you know, we're not big in the black car space. not gonna hurt me. And I had to send him this because he's, I wanted him to understand it. The Uber of Southeast Asia is called grabs, GRAB. And it's a, it is a smart app like you cannot imagine. It does banking, it does deliveries. It does so much stuff. It's not funny. It really is Uber on steroids.

James Blain:

Huh?

Ken Lucci:

Grab just partnered with a company in Korea called, it's a full full stack Korean autonomous vehicle tech manufacturer called autonomous A to Z to deploy the first autonomous electric shuttle in Singapore.

James Blain:

Yep.

Ken Lucci:

Okay. So that caused me to reach out to, uh, the stakeholders over at A to Z and they were nice enough to, after the time zone difference. My question was simple when we be coming to the US and their answer to me is, we already have proposals in the US

James Blain:

Yep.

Ken Lucci:

and we are already approved as a AV testing company. The interesting thing about their partnership with Grab is part of this autonomous shuttle vehicle program is also partnered with the National Private Hire Vehicle Association. To provide safety drivers,

James Blain:

Okay.

Ken Lucci:

the safety drivers have to be on board the vehicle. Okay. At least at this point. I couldn't get them to tell me where. But then I started doing more research on the shuttles. University of Michigan has got an autonomous, um, shuttle program, Mississippi State University, uh, Mississippi, not necessarily the bastion of technology or forward thinking, shall we say, is on the cutting edge with tech innovation and research. Introducing an electric, autonomous vehicle shuttle system pilot program on campus. And the shuttle is made by same company.

James Blain:

Well, but think about it. You've got places that are used to doing research, development, testing, education. What better place to test it? You've got. All of these issues they already have with, getting drivers with running shifts, with everything there. If I can put a bus on that route that runs 24 hours a day, that doesn't get tired, that charges itself does everything. We're good, and let's get some crap outta the way right now because favorite and someone's thinking it right now. Well, as soon as they run someone owner or as soon as they kill somebody. The problem is, even though they've had actual fatalities with avs at this point, how many fatalities do we see on the road with human drivers? How many accidents do we see with human drivers? How many times do we have issues?

Ken Lucci:

You just there, um, you just literally. You just uncovered their way into the market.

James Blain:

Yeah.

Ken Lucci:

Remember that back in the day that Uber's big entry into the market was the sharing economy

James Blain:

Yep.

Ken Lucci:

and the ability to use the vehicles that are already on the road for to, uh, lower carbon emissions. Well, it actually proved to be wrong, but it

James Blain:

It's'cause they're all driving around in circles waiting for trips, but that's

Ken Lucci:

Exactly. But to, to your point, the Autonomous Vehicle Association, and there is one, there is, and I think everybody should, by the way, I think everybody in the industry should get involved. Autonomous Vehicle Industry Association's mission is to advocate for the safe and timely. Deployment of autonomous vehicle technology. There is not a manufacturer, an auto manufacturers that's not a member, and everybody we've been talking about is a member and their entire persona, their entire, messaging is to tell the federal government and the state governments that it is much safer to deploy autonomous technology than human beings. So, when we, everybody on the other end of this, are we, are we doing this to scare you? No, we're not because

James Blain:

not

Ken Lucci:

I, I believe that yeah, it is, without question, it's going to be somewhat of a disruption, but if you are the operator that is going to the colleges and universities and you are bringing up, have you looked into any electric or any autonomous or anything else in, for your campus, you need to be the operator that they go to. We ride, this is another example. Uh, I have a client that does a ton of events, a ton of events in France recently, an event in France. We ride and Renault partnered to put a robo bus

James Blain:

huh.

Ken Lucci:

in the event it was a, you know, they basically closed the city for the event from the parking areas and the hotels to the stadium. Okay. So

James Blain:

And, and

Ken Lucci:

I,

James Blain:

Ken, for

Ken Lucci:

yep.

James Blain:

that that doesn't know, this Reno is a brand of vehicle in France. They're very popular. They're

Ken Lucci:

No, see again, it's Rene, it's you what is with your pro? It's Rene what's with, what is with your pronunciations. Anyway.

James Blain:

if we were in Spain, it would be Reno. It depends

Ken Lucci:

Okay.

James Blain:

country you're in for the

Ken Lucci:

I've learned something about you today. You really have a strange pronunciation

James Blain:

Oh

Ken Lucci:

of a

James Blain:

geez.

Ken Lucci:

automobiles. I don't know. What's that. Anyway,

James Blain:

find a younger hohos. Your, your

Ken Lucci:

yeah,

James Blain:

going out, man.

Ken Lucci:

I know

James Blain:

wrong.

Ken Lucci:

it is. It is. So what's my, what's our point? What's my point with that?

James Blain:

Yep.

Ken Lucci:

I'm an operator today, a fleet operator, I'm looking at, I want to be involved in the regulatory process in my state. I want to get in touch with and become networked in with the Department of Transportation in my state. I want to make sure that I am networked in with every college and university. facilities manager, the facilities manager's, groups, associations are incredible, right? So I would want to be read in with what is going on everywhere around me, and I would wanna be on the cutting edge and find a way to let it be known that you are, uh, looking into ev charging, you're looking into avs, et cetera, et cetera. The thing that got me about neuro getting back to that, going from five, weeks of putting the NeuroDRIVE attachment, it kinda looks like an air conditioner on the top of that Black SUV,

James Blain:

about right.

Ken Lucci:

putting that on top of of a standard vehicle and getting it to testing.

James Blain:

So there's a couple things we haven't talked about there and, and we, it's gonna be a little bit longer episode than usual, which is all right. But the bigger things that are coming into play, and it's gonna matter more and more, is things like electric steering things where, we went, it used to be there was a cable from your foot all the way to the engine to open the throttle body. And that's when the gas and you know, the air comes in and you get your power. They started changing that. Now it's fly by wire. The planes started first, then they started doing it on cars. There's your gas pedal if you have a newer vehicle, is a sensor. Then it opens the throttle body accordingly. The steering now is electric. It's not hydraulic. So what's going to happen with that? They're setting things up, whether inadvertently or on purpose, where you can start plugging into those systems that control it and you can start driving it and doing things there. And again, I think to your point, Ken, I've heard they, they're gonna get hacked. They're gonna kill somebody, they're gonna do this, they're gonna do that. Look, when we started doing airplanes, people were like, oh, they're gonna fall out of the sky. They're gonna, people are gonna die, but blah, this is the safest mode of travel. But when the Wright brothers were out at Kittyhawk, everybody thought they were outta their mind. What happened? Time went by, the technology improved. Now it's common day. And

Ken Lucci:

Yeah.

James Blain:

don't think if you're a small operator, you're like, man, I gotta go figure out how to buy an EV tomorrow or an AV tomorrow. But I do think if you are in the business, you need to be looking at where am I gonna have an opportunity to buy an AB. How do I find my niche? How am I gonna keep an identity? How am I going to, deal with this new technology? And keep going because it's coming whether you like it or not.

Ken Lucci:

Oh, it totally is. And to you, to your point, you know, when you, when you look at the automobile business, back in the automobile, the first automobile, manufacturers, there were 3,200 of'em in the United States, 3,200. Okay. So I think you're, I think you're at that much, much like the automobile business. The, the AV business. AV business that we're there, right?

James Blain:

Oh

Ken Lucci:

There's all of these startups and you have to

James Blain:

They're racing, they're trying to get there first.

Ken Lucci:

Watch the ones that are the most promising. In my mind, neuro AI just took a giant step forward. and Nvidia, I agree with you on Nvidia, by the way. I, I, I've been watching that stock. But anyway, if I'm an operator, give me your guess, and I'll tell you mine on when we are going to see avs go from,

James Blain:

Ooh, is a good

Ken Lucci:

no, let me set it up from avs. Are gonna go from a novelty to normalcy in the top 50 MSAs in this country. How long will it be MSAs and Metropolitan Statistical area?

James Blain:

So let's, let's talk about a couple things that haven't come up yet. One of the things that we have seen, and the reason that Waymo entering New York is such a big deal, that typically AI relies on good weather. Now, AV ai, right? Because one of the

Ken Lucci:

Good point.

James Blain:

your brain can do is we can filter. when it's raining, you don't try to track every single raindrop. Now, if you've got lighter, if you've got other systems, guess what? One of two things is gonna happen. You either have to figure out how to filter all that out and ignore all of those raindrops instead of tracking them individually or. You have to figure out how to still do it. Guess what? If it's raining hard enough? If it's foggy enough, if conditions are bad enough, you have to pull over. thankfully, the way the human brain is set up, we do an amazing job of just naturally adapting to that. Same thing happens in low light conditions. Lidar really works great at night. A lot of those technologies work great at night because the camera starts getting low light images, the quality drops, so you have to have cameras that are designed to be able to handle low light, those types of things.

Ken Lucci:

So your, your supposition is that they're gonna struggle, the avs are gonna struggle with rain and snow.

James Blain:

Oh, I, I, I think it's going to be a hurdle like anything else. That's why we saw them launch in Phoenix when Phoenix

Ken Lucci:

Oh,

James Blain:

dust storm, when it

Ken Lucci:

yeah.

James Blain:

in Phoenix, when weather was subpar,

Ken Lucci:

Yeah.

James Blain:

'em in, they wouldn't run'em. And I've been told, right, I, I haven't been there when this happened. When I was in Phoenix, it was all nice weather, but I've been told that people have been riding in Waymo's and it starts rain. the Waymo basically pulls over and goes, Hey bud. Sorry. It's not safe to keep going. Now, they have spent a ton of time, a ton of money, everywhere from Findland and Sweden to Canada, to the northern United States trying to adapt to weather. here's the thing, I think we're go, we're already at the point where we've seen them grow from Phoenix to Los Angeles to Austin, to all of those, I think we're probably in novelty mode for about five years. Um, it has taken five years, and I want everybody that's listening to think about this chat. GPT came out in 2020. How many people right now don't have it as some. Part of their life. Apple's integrated it into their email, into the iPhone, into Windows, and it's literally gone into everything. And when it came out, it was like this new toy that we've played with five years down the road. Were, were not there. It used to be that models, right? I, I've always been a Mustang guy, sorry Camaro people. but it used to be that Ford would update and change the Mustang design every five years, right? Probably somewhere in that five to eight range is a typical lifecycle of a body style, of a model of vehicle. if we look at that and we say, okay, it gets into the main major cities and we've overcome the hurdles, we can assume that within five to eight years, the new model vehicles are coming out. If you've got neuro, if you've got. All of these other options to just strap sensors onto it. You are, you're absolutely kidding yourself. If you don't think that at the proving grounds, companies are already strapping on and they're already working on that five to eight year from now vehicle. We've got Super Cruise and gm, we've got Lane Assist. Right? You've got all of these things to where you basically get on the highway, you push go and e even a brand new Kia drives itself down the highway if you put on the cruise.

Ken Lucci:

So I'm gonna amend, I'm, I am going to slightly disagree.

James Blain:

Okay.

Ken Lucci:

I think within, I think within three years, I think within three years you're going to see major institutions and closed campuses and closed communities look at the AAV model to replace their public transit, student transit,

James Blain:

I agree with that. I I think it probably four years probably is, is my guess

Ken Lucci:

I I also think that, I think within five years, you'll see the top 20 MSAs with fleets of these things in them

James Blain:

Yeah.

Ken Lucci:

of them within five years. and that's as far as as, that's as far as I'm willing to go. I'm not read up enough on it. I would love if anybody in this audience knows Dave Ferguson from neuro

James Blain:

Oh yeah. No, we'd love to have

Ken Lucci:

I would, I would love to have him on. I would love to get one of the AV people from the TNCs on, if I'm still not on a watch list inside their companies, but that's okay. Nevermind at least one of'em is, you know, somewhat friendly.

James Blain:

So Agree that 10 years is kind of where I think, I think within 10 years.

Ken Lucci:

oh yeah.

James Blain:

gonna, we're gonna see them commonplace.

Ken Lucci:

Oh,

James Blain:

be

Ken Lucci:

absolutely.

James Blain:

to see AB and I.

Ken Lucci:

Absolutely.

James Blain:

that's, and that's beyond just, I, think within 10 years be able to go to pretty much any dealership and buy your own self-driving vehicle.

Ken Lucci:

I, I agree with that. I mean, I'm a little concerned because I'm watching the Tesla. Tesla has several fatality lawsuits from the Autopilot. One is big in Miami,

James Blain:

Yep.

Ken Lucci:

and I'm watching that because I want to see what the verdict is because Musk's. Excuse me. Tesla's defense is the terms and conditions by which they sold the the autopilot. and supposedly it's a different system than their autonomous system. Anyway, I'm watching that.

James Blain:

Well,

Ken Lucci:

And the other piece that we have not talked about is the reaction of the insurance industry, which,

James Blain:

industry is going to embrace it. But I think you brought up a huge point because right. now Tesla's full self-driving is a beta. You're supposed to be hands on the wheel driving the car, paying attention, but it's

Ken Lucci:

right.

James Blain:

uncommon to see people treating it like it's, mainstay. And I

Ken Lucci:

Oh,

James Blain:

and I don't, I

Ken Lucci:

absolutely.

James Blain:

story's true or not, but the story that I was told was that when RVs first came out, they had autopilot and you would put on autopilot and it was really just a really bad name for cruise control. And so they had a couple accidents where people put on the autopilot and then went in the back of the RV to make dinner and crashed and died. Now, whether or not that's true, but

Ken Lucci:

No, I, I believe it. No, no. Listen, I believe it because people are inherently fucking stupid. I mean, I'm sorry. You call it an autopilot,

James Blain:

not wrong.

Ken Lucci:

And my mind goes immediately to the autopilots in, in planes.

James Blain:

Yeah.

Ken Lucci:

you know, when we get to this point, where AVS become more normal, do I think that you are gonna see a 56 passenger, AV motor coach without a pilot? No, I don't. For the same reason why, you know, Boeing, those, the Boeings can take off and land without the pilot. Okay.

James Blain:

Oh.

Ken Lucci:

But

James Blain:

but

Ken Lucci:

they.

James Blain:

not have been watching the Airline Pilots Association because they are right now to keep two pilots. And by the way, I a hundred percent

Ken Lucci:

Oh, I, I think that they there's no way I, I think they're gonna win it.

James Blain:

They, wanna go down to a single pilot.

Ken Lucci:

Well, here's what shoots that in the face, right? The, okay. The guy is,

James Blain:

right? The, the Airline Pilots Association wants two, but Boeing

Ken Lucci:

well, Boeing wants it. Wait a minute. Let's just say, say this right now. Does Boeing really have a fucking track record for safety that we wanna follow? Those sons of bitches are falling out of the sky,

James Blain:

Yeah, I

Ken Lucci:

right?

James Blain:

here's but to the point, right? People that are like, oh my God, you killed someone and avs are gonna be done.

Ken Lucci:

No, it's.

James Blain:

were crashing themselves and we're still flying on them.

Ken Lucci:

Exactly right, but, so here's the, here's why. The, the one pilot doesn't work. Okay? The average pilot I see going through the airport is 25 pounds overweight. He's eating fast food. He hasn't slept right. You want to put the lives of 300 people in front, in, in the, in the hands of a walking coronary. I'll take those odds all day long. Two pilots. And you know what?

James Blain:

Pilots association, we support you.

Ken Lucci:

if Boeing wins this argument, I'll never fly again. I'll fly with Bobby, be Gamba who owns his own plane. I sold his company and I told him that I wrote in Invisible Inc. That he has to give me flights anywhere I want in his private play. But no, it doesn't. And it's a laws of law of probability. If you are responsible for 56 people I'm sorry, that motor coach is gonna have a pilot. It's going to always have a pilot if

James Blain:

But I think that role's gonna change, Ken.

Ken Lucci:

Oh,

James Blain:

that,

Ken Lucci:

absolutely.

James Blain:

and that's where I was saying the opportunity is earlier. In my mind, when I think about the future, the way I envision it is you are most likely going to go to a hotel-like model where there's a concierge at the airport that

Ken Lucci:

Yeah.

James Blain:

unload your luggage. That helps you there. And then if you have someone doing like a and again, this is gonna be super luxury, not your everyday guy, but if you have a high-end person that needs something there, are going to have someone help load the vehicle, help get them there. But the big thing, and this is my concern with that and my view on that, and I don't have an answer to it, people are not looking, and by the way, anybody that has chauffeurs, people are not looking for a friend to ride. The vast majority of the time, one of the biggest problems that I see time and time again is that people that are providing luxury service have chauffeur, drivers, whatever role it is that think they're there to entertain and not serve. And

Ken Lucci:

Yeah.

James Blain:

is if the car's driving itself and I have a concierge in the vehicle, they're going to innately want to converse and entertain and be that person. And so I, I think the big question mark right now is, what does that look like? Because you gotta think about it, your biggest, most important VIP. Do you really see them going on a big trip with a bunch of luggage, schlepping all their stuff into the back of the vehicle Then It into their private

Ken Lucci:

no. I don't. I see that being a luxury. I think it's a luxury av. It's with a ticker in the back or with financial news playing. It's absolutely a rock solid wifi connection. Et cetera.

James Blain:

Yep.

Ken Lucci:

So yeah, I see those amenities coming and that's, I had a, a strong disagreement with an operator who said, Ken, we can be in the business for the next 30 years and those are not gonna affect us. I said, you're dead wrong. I said, you're dead wrong. And a hydrogen powered Rolls Royce. Okay?

James Blain:

Yep.

Ken Lucci:

Rolls Royce is saying, no more EVs, they're going right to hydrogen. Okay. Rolls Royce, and this is, you know, rolls Royce is in intox with some AV technology people. But the issue with Rolls Royce is you must build it in. It cannot look like it's

James Blain:

Yeah,

Ken Lucci:

It has to be built in.

James Blain:

can't Looking unit on the roof with sensors on it.

Ken Lucci:

it's

James Blain:

to build it

Ken Lucci:

coming,

James Blain:

think about it, and to your point, right point, Tesla has been probably one of the most forward thinking because Tesla was putting all the sensors built into the design already there, already ready,

Ken Lucci:

not telling you why.

James Blain:

not telling you why. And then

Ken Lucci:

Yep.

James Blain:

their now. Like this could be a whole user agreements could be a whole like series, right? But what you don't realize is when you're getting into any of these vehicles, your user agreement basically says you are allowing us to mine all the data. We're basically tracking your car. Does. So the

Ken Lucci:

yep.

James Blain:

em they sell, the better it's gonna get. And again, back to

Ken Lucci:

yeah.

James Blain:

law, it's gonna really hockey stick and go straight up in the next couple years. If you really think it's gonna be 30 years,

Ken Lucci:

No way.

James Blain:

in a rural area,

Ken Lucci:

Yeah.

James Blain:

and I really hope you're somewhere where you've got older clientele that are terrified of technology. Because even people that hate tech, it is alarming how fast they'll go from, oh my God, that's so stupid. That's so unsafe to, oh, I didn't really want to, but I wrote in one and it was okay to, I wrote in it the second time to the third time, oh yes, this is awesome. This is my new thing.

Ken Lucci:

And I think you have to open up your mind because, you know, the university that's near me here, I mean, I have to go off the Eastern shore by two hours to get my teeth worked on the university here Waymo is absolutely not gonna put depot, but some entrepreneur will sign a seven, eight year agreement with this university and supply them with their on-campus transportation, the avs to come downtown to their, where their, their big student buildings are, et cetera. There will be use cases where our fleet operators, the ones that are savvy and prepared, and by the way, well-financed

James Blain:

Yep.

Ken Lucci:

will benefit eventually from avs. Uh, well listen, we've kicked the crap out of this hour as usual. Very spirited. You kind of went off on a little bit if the tech nerd thing there, which is fine,

James Blain:

Gotta What's coming.

Ken Lucci:

Yeah,

James Blain:

what what

Ken Lucci:

thank you for explaining. Thank you for ex explaining the hydraulic steering wheel versus, you know, it's wonderful to be enlightened. Um, this has been another exciting episode of the Ground Transportation Podcast with my techno nerd, uh, sidekick James Blaine, who will be, I'm sure at some point, training AVS

James Blain:

I don't know about, I don't know about training avs, but

Ken Lucci:

training

James Blain:

I

Ken Lucci:

AV attendance.

James Blain:

yeah, if you've gotten anything out of this podcast, think the thing you should get is that we are not going to a point anytime soon where service loses the human aspect

Ken Lucci:

Agreed.

James Blain:

sure that people are living up to that aspect and can provide the service is huge. I think in our world, we, that's where I see the shift is there'll be a lot of focus on understanding the technology, how to provide service, and who knows, maybe even at some point how to service the vehicle.

Ken Lucci:

Listen, I hope I'll be retired by then. Five more years, baby. That's it. Unless the big one comes in. When that big one comes in, I'm out.

James Blain:

you go.

Ken Lucci:

Alright guys, we'll see you again next next week on another exciting episode of the Ground Transportation Podcast.

James Blain:

Thanks everybody for listening.

Thank you for listening to the ground transportation podcast. If you enjoyed this episode, please remember to subscribe to the show on apple, Spotify, YouTube, or wherever you get your podcasts. For more information about PAX training and to contact James, go to PAX training.com. And for more information about driving transactions and to contact Ken, Go to driving transactions.com. We'll see you next time on the ground transportation podcast.

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James Blain

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Kenneth Lucci

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