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May 24, 2018

In today’s digest, we examine a potentially untapped and lucrative business space in the AV market, check out some new smart roads, and more.

Is There An Untapped Billion-Dollar Business in the AV Market?

The poll results are in: the recent spate of AV crashes has caused significant harm to public acceptance of autonomous vehicles. But one expert thinks he has the solution — a set of fixes that could create big business for companies that aren’t yet major players in the burgeoning AV market.

First, let’s look at the bad news. A recent AAA-sponsored poll found that three-quarters of Americans are now saying they are too afraid to ride in an autonomous vehicle. That’s up 10 points from attitudes polled in late 2017, bringing the “fear factor” back to where it was when autonomous vehicles were mostly a foreign concept to poll respondents.

Even worse, according to Autonews: “The biggest surge in anxiety comes from young adults, ages 20 to 37, with 64 percent now saying they’re afraid to ride in a self-driving car, up from 49 percent at the end of last year. The so-called millennial generation had previously been the most accepting of the new technology.

‘Our results show any incident involving an autonomous vehicle is likely to shake consumer trust, which is a critical component to the widespread acceptance of autonomous vehicles,’ Greg Brannon, AAA’s director of automotive engineering and industry relations, said in a statement.”

But in a recent Forbes op-ed, Shahin Farshci — the founder of VC Lux Capital and a leading investor in next-generation transportation tech — thinks this presents an opening for entrepreneurs, potentially a billion-dollar one, that would make major headway in assuaging the public’s anxieties about autonomous vehicles. That opening would be for “massive enterprises testing and certifying compliance, with the roles of these companies in our autonomous futures being as important as those building the sensors and software stacks in these four-wheeled robots,” Farschi writes.

Farschi says the problem the AV industry is facing has to do with priorities being set by VC money: “I see disproportionate capital going into building fundamental technology to enable autonomous cars, but not as much going into building the ecosystem that they need to operate.”

He makes the case using airlines as an example:

“Today, Boeing and Airbus constitute only a portion of the aviation ecosystem: there’s the air carriers (Delta, United, Southwest), airports (LAX, JFK, SFO), airline caterers, jet fuel suppliers, as well as flight inspection service providers. The flight inspection service providers ensure that proper steps have been taken towards complying with safety rules set forth by the Federal Aviation Administration.”

“In the outside chance a tragic accident were to occur, investigators are activated to determine the root cause.  If they conclude that the airline did indeed comply to the rules set forth by the FAA, then they are required by law to take specific actions with respect to those injured or killed. If there is evidence of negligence or non-compliance, then the airline can have an existential crisis as a result of penalties and lawsuits.”

“I expect a similar model for autonomous cars: robotaxi operators must comply with specific rules and regulations.  In the unlikely, but inevitable event of an accident, an investigation is carried out to determine whether the vehicle and the robotaxi operator were indeed compliant.  If the answer is yes, then the robotaxi operator’s liabilities are limited to the expenses associated with carrying out an investigation, which can be insured. If the investigation concludes that the robotaxi operator was not compliant, then action is taken to identify those responsible for putting the safety of passengers, pedestrians, and other motorists at risk.”

Essentially, if there were third-party companies in the business of validating and certifying AV systems and manufacturers were required to attain such certification, and if still more third-party companies were tasked with investigating the root causes of AV crashes, the public could be expected to develop a level of trust in AVs that equals trust in airplanes. With the current AV legislation looking fairly doomed in the Senate, perhaps it’s time for federal officials to re-think their approach of more or less putting companies on an honor system when it comes to compliance and safety reporting.

While the federal government may be stretched too thin to be able to provide these services, there are certainly lots of companies out there who would love some involvement in the AV sector. Farschi’s argument (which goes further in-depth than could be reprinted here) is an intriguing one. And he asks any entrepreneurs interested in his idea to get in touch with him at the end of the op-ed, so if that could be you, be sure to click the link! (Here it is one more time if you don’t want to scroll up.)

Smart Roads Startup Making Headway in Kansas

Smart cities and AV buffs alike will be fascinated to read about the recent work of Integrated Roadways, a smart roads startup, in the state of Kansas. Their project could be a preview of things to come, with roads that collect very specific data, acts as a V2X communications server, and even provides Wi-Fi to passengers.

Here are the key details from the above-linked article:

“Integrated Roadways, along with partners Kiewit Infrastructure Co., Cisco Systems, WSP Global and Wichita Concrete Pipe, will build about a half-mile of smart pavement on the highway to collect data on run-off-the-road crashes as well as automatically alert authorities of the crashes.”

“The road system uses high resolution fiber optic sensors and other technologies inside the pavement to detect vehicle position in real time as well as roadway conditions. This technology would detect crashes as they occur, for instance, and automatically notify emergency responders to those crashes.”

“‘The pavement would be able to act like the tracking pad one your mouse, knowing the speed and direction that a vehicle travels across it is going,’ [said Peter Kozinski, director of the RoadX program Colorado Department of Transportation]. ‘If a vehicle leaves the pavement at a trajectory and speed that suggests they left unsafely, the pavement would notify emergency responders that someone had ran off the road.'”

“This way dispatchers could send someone to the scene to see if anyone needed help, instead of waiting for a passerby to recognize that someone had gone off the road.”

“In addition to alerting authorities to run-off-the-road crashes, intelligent infrastructure can help improve road safety by providing data from before and after a crash to highway officials so they can design changes to prevent similar crashes in the future.”

“Unlike most road construction where crews build the roadway on site, smart pavement is a collection of precast, factory-built concrete slabs that are shipped to the construction site on the back of trucks and then positioned into place, one by one.

“This method allows roads to be built faster, last longer and reduce maintenance and repairs. Because it is factory built, the technologies can be built inside the slabs, which would not be feasible on site.”

“Integrated Roadways uses passive technologies inside the pavement that are operated by a fiber optic network and other technologies on the side of the road that can be serviced and upgraded separately.”

“And the pavement has expansion ports that allow for sensors and other elements to be plugged in or removed when they are not working properly or have become obsolete.”

In addition to all these features, local officials “envision the roads paying for themselves through revenue generated by selling access to data, connectivity and services”, and initially anticipate that “the primary use of smart pavement will be the collection of real-time data about vehicles and traffic… data [that] will provide a statistical model about the aggregate behavior of all drivers on the roadway.”

They’re also tackling privacy concerns. While “the data…is able to determine the difference between a Buick Regal or a Honda Civic on the road,” local officials and Integrated Roadways have assured citizens that no personal names or accounts will be associated with that data.

It’s something that will be useful now, but even moreso down the road: “future uses of smart pavement would be for connectivity purposes, including Wi-Fi access, dedicated short-range communications for connected vehicles and as a host for the next generation of high-speed cellular service.”

This project is definitely one to watch, since V2X communication is often brushed aside in favor of developing more exciting autonomous tech. Plus, having wi-fi hotspots in pavement is just objectively cool.

Quick Bites

  • WIRED brings us another “how AVs will reshape cities” story, but this time it’s got some interesting specifics we haven’t seen before, complete with illustrations. It’s worth a click.
  • For our Wisconsin readers: Foxconn recently announced a smart cities initiative that will involve a contest spanning the University of Wisconsin system that will ask students to “envision what a smart city should, and could, look like.”
  • Bloomberg provides an updated look at the global AV race as regulations continue to develop. The big change: South Korea is ranked as the current “silent leader”, with China preparing to grab the lead by a mile, as the Chinese government nears the end of its final review on AV testing guidelines. China will propose that provincial authorities manage all AV tests — which Bloomberg notes that “federalist North Americans could learn from.” Wonder who they’re talking about?

What do you think — about any of these stories or the other ongoing developments in the realms of next-gen transportation or smart cities? Contact us and let us know. If you write something really great, we might even quote you next time, so don’t be shy, join the conversation!

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