An Essential Transportation Transformation

With engaging knowledge, humor, and energy, Larry Burns shared with the Imagine Solutions audience his vision for the future of the autonomous car, a future Larry bellieves is coming much sooner than later, and to our great benefit. For the first time since the automobile was invented over a century ago, it is undergoing a massive innovation. A key result of driverless vehicles will be the much more efficient movement of both people and goods. Larry posits that the scaled adoption of driverless cars will improve our safety and quality of life, optimize costs, decrease road congestion, and contribute to better environmental impact. Larry predicts a transformed industry within five years.

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knock em dead good morning I'm an optimistic technologist by nature but also by experience 25 years ago I lost my hearing and today I here with an amazing technology called cochlear implants when you live in this world of the heart of hearing you have your moments my wife and I came down earlier in the week we went up to the Orlando area and I was driving then I said to her look honey we're gonna get to go to kiss me she said it's not kiss me it's kissing me I said well I thought was kiss me she said I can hear and you can't hear and I said well we stopped to ask someone so he stopped and we walked into a restaurant and I walk up to the waitress I said excuse me can you tell us where we are my wife says say it real slow cause he can't hear too well and the waitress goes Burger King so you never know what you're going to get this is my classmate Karl Benz and he invented the first gasoline-powered automobile a hundred and thirty two

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years ago and we've had an enormous evolution of the car since then along with the roads and the energy supply the parking the laws and regulations but there aren't many technologies in our life today that were invented a hundred thirty two years ago because things have changed so much during this time frame cars have become more affordable more useful safer cleaner more efficient and they've also reached an enormous scale there's 1.2 billion cars and trucks in the world if you park them in 2n and wrap them around the planet that traffic will go around a hundred times and with that scale and that freedom that comes from owning an automobile our serious side effects whether it's the 1.3 million fatalities a year worldwide which is epidemic and scale whether its climate change or whether it's inequality of access these are very very serious issues the same DNA for the car

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that was designed by Benz is in the car that you drive today if you are an archeologist and you dug up a 1900 vintage car or a 2000 vintage car and you did a DNA let's say they're pretty much the same mechanically driven with a combustion engine an oil-based fuel with mechanical and hydraulic controls human operated standalone machine general-purpose and the business has always been vehicle as a product General Motors for example will sell you a vehicle as they're a product an amazing thing happened between 2007 and 2012 this by the way was the darkest age of the auto industry due to the recession my company General Motors went bankrupt but during that time three things were going on totally outside the auto industry autonomous vehicles were being stimulated by our Defense Advanced Research Projects Agency and then moved on by Google Tesla was leading the way with electric

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vehicles and uber and lyft was changing the business model to transportation as a service when you put all three of these together that's when the change comes about that's one of my important messages it's not just autonomous cars alone or electric cars alone it's when you combine the three you create a new age of autumn ability and that's what I want to help you understand today and understand the implications this vehicle here is called boss and it's a self-driving car that competed in the DARPA urban challenge and a lot of you probably think self-driving is a fairy tale ice picking on my wife before but we have a godchild named Gabby and my my wife was reading her a bedtime story on Gabby said auntie Cece do all fairy tales start with once upon a time and my wife said no most of them start with if I am elected so this is this is not a fairy tale this is a car that competed in that challenge

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General Motors sponsored Carnegie Mellon University in the race there are 85 teams who thought they could create a car that could go 60 miles in a city setting no remote control nobody in the car on the prize if you could do it was 2 million dollars the economy was softening I was head of R&D at GM I figured we're gonna need that 2 million pretty bad we better go out there and win it and we did we won at teaming with Carnegie Mellon Stanford and Volkswagen came in second but the real message was 35 cars were built that could pass a driver's training test and we completed the price um this is basically how the system works daniela did a good job of describing it the key point I want to make in addition to the component she described is that like humans autonomous driving is about making two decisions over and over and over again in some ways this is very very simple where should i stir and how fast should i go but in fact because of the complexity of the settings that we drive in it's much

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more difficult so companies are creating these development processes and the key is to learn in the real world that's really what's important and what we've discovered is that getting the first 90% of driving handled went pretty pretty well going from 90 to 99 percent was harder than going from zero to 90 and actually that last 1% is proving harder than going from 90 to 99 if I told you I had a speech recognition system that could recognize 99% of the words you'd say that's probably gonna work pretty well if I told you I could handle 99% of your driving you'd say no way I'm not gonna buy into that so that's really what we're dealing with the challenge of autonomous driving gets harder the further you get into it Google then stepped up after that DARPA urban challenge and in 2009 they created Google self-driving cars and whammo I became an advisor to that team in 2011 and continue in that role today but

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Larry Page and Sergey Brin had a passion for this technology and they recruited 15 young engineers that participated in those races and said go for it the vehicle on your upper right then was one of the prototypes that created that vehicle does not have a steering wheel or brake pedals or accelerator pedals subsequently Wayne was now working with the Chrysler Pacifica Hybrid down in the lower left corner in their Jaguar electric ipace so they stepped up and they said we believe we can pull this off and they've made enormous progress and it's not just the autonomous car what's really exciting right now is that electric vehicles are approaching a tipping point here are several examples in the most recent one the one in your bottom right corner of the Rivia and pick up has really gotten the attention of the auto industry as well as some major investors and it's not just electric vehicles autonomous vehicles it's the business model vehicle as a product is really the industry I

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came from we would spend at General Motors about a half a billion dollars to design an engineer a new Chevrolet Equinox we would then tool it and manufactured and distribute it and then people would buy it and then ExxonMobil would be able to sell gasoline because the cars were there and insurance companies would insure your car and finances so here's your first quiz of the day and I want you to be honest with me how many of you really like to go out shopping for a car Saturday morning go yippee I get to go to that dealer and talk to the dealer what about financing your car or insuring your car how many people when your cars on one eighth of a tank say hooray I get to pull into this gas station grab that dirty gas pump get some gas on my shoes and fill up my tank do you like getting your car washed about maintaining your car how about looking for a place to park in Naples on a Saturday night when you're really hungry what about driving a car now I expect some hands to go up here you like to try

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some of you how about sitting in traffic my point here is that for over a century the auto industry has assumed you're willing to put up with all of these negatives for the privilege of spending thirty five thousand dollars on a typical new car and leave it parked 90 to 95 percent of the time it's amazing that business models last for a century and the long comes a couple companies Zipcar uber lyft and they start exploring this transportation as a service model and pert because with GPS and cell phones I could tell where a person was and where a vehicle is they could connect them together and here it's selling miles trips and experiences not cars and lo and behold you get rid of all those negatives your future is going to be about hitting an app a vehicle showing up your door within minutes you getting in the vehicle arriving at your destination getting out of the car feeling better than when you

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got into it and that car is either gonna go serve someone else or it's going to go and park in some Sparks spot and wait for you and get itself recharged and you're gonna get all these hassles out of your life and you're going to do that with far less risk of getting in the car crash so this is an exciting model I want to emphasize this is not just over without a driver and it's not just about moving people it's moving people and goods notice there in the middle 26% of us in the United States live in cities 53% in suburban areas 21% in rural areas this is going to apply to all three it's going to be shared use and exclusive use if you want to have your own you're gonna be able to subscribe to a service and have your own and you're gonna be the one controlling the dispatch of that vehicle so maybe you have one that's assigned to you ride to work it goes in parts itself three hours into the day you realize you forgot to pick up your dry cleaning you dispatch your

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yokota go get the dry cleaning about 4:00 in the afternoon you say geez I forgot about dinner or I want to get Chinese takeout your dispatch your vehicle to go get the takeout then finally it's there to take you home again so that exclusive use could be yours it's long home and local trucking and very importantly this underlying infrastructure of parking and energy and maintenance and all of that's going to change dramatically these are some of the concepts that have surfaced around the types of autonomous vehicles that will exist you know in the United States 80% of the trips we make in our cars are one and two purse but yet we insist on having cars with four to six seats every city speeds are 20 to 30 miles an hour but yet we insist in buying a car with over 100 mile per hour speed 70% of the trips we make are less than 8 miles but we want a range when we fill up with gas of 3 to 400 miles my point here is that the cars we've had for over a century are grossly over specified compared to the kinds of trips that we make so we have a huge

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opportunity to tailor the design of the vehicle the design objective is to create the ultimate writing machine the goal is every time you get in and get out you feel better than when you got out whether you took a nap 8 did some work socially networked with your kids whatever it is that made you feel better about yourself that's the experience we strive for and when it's a transportation service the business is about optimizing costs per mile not price at the dealership and these vehicles will have much longer lives because they're going to be maintained and managed in a much more effective way and when you have a 3 out of thousands of my life low and behold the electric drive makes all kinds of sense because you can say 5 to 10 cents a mile and energy costs by making an electric drive over 300 thousand miles that's 15,000 to 30,000 dollars of lifetime savings and then finally these vehicles will have far fewer parts why all these driving

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controls when you leave here if you're driving your own car look at all the parts that are there to allow you to drive the car and look at all the parts that are under the hood that are due to a mechanical drive system from combustion you know transmissions and emission systems and all of that the easiest way to test emissions is to measure zero so this is pretty profound and what's coming with the vehicles it's a transformational opportunity and when you see that opportunity you have to jump at it I I knew I was gonna have a great relationship with my wife on my honeymoon it was great that we talked about the natural natural parks because we went to the Grand Canyon and we're writing these burros down into the canyon and she's in front of me and in her burro trips and she goes that's one and I go yeah that's kind and then it stumbles and she goes that's two and then a trips again and goes that's three she gets up and pushes his burro over the edge and I said geez suddenly I know a trip but aren't you overreacting and she said that's one so

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but this this is transformation and I transformed that minute we're gonna go to autonomous electric vehicles using diverse energy the business will be transportation service so the vehicles will be tailored to segmented markets you're going to have compelling transportation experiences that are designed for you the rider or the package is coming to you and it'll be optimized for cost per mile this is a great opportunity better in terms of safer more convenient more productive more personalized more affordable more enjoyable and as an engineer what excites me about this is you can get all of this simultaneously they're not being traded off against each other lower cost I let a program for sustainable mobility at Columbia University and the question we wanted to answer is how much would the cost from i/o be if for example a city like Ann Arbor Michigan we could take all the

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cars that are human driven personally owned and designed conventionally and replace them with a driverless shared fleet of cars that are tailored and still do all the trips that everybody now ever wanted to take today it costs about 65 cents a mile out-of-pocket depreciation finance energy maintenance insurance and parking and another 85 cents a mile for our median wage person because of the time they spend tethered to their steering wheel so I'm estimating word about a buck 50 a mile in Ann Arbor today and we started modeling an arbor and lo and behold we felt we could satisfy all the travel with about 15% of the vehicle fleet that's in Ann Arbor today and reach a target of about 20 cents a mile now Americans drive three trillion miles a year so that buck 50 down to 20 is four trillion dollars per year that could get redistributed among the

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US consumers workers and companies as this transformation plays out in enormous implication and the societal benefits are profound over 90% of global roadway fatalities could be eliminated where does that number come from traffic safety experts have studied crashes and fatalities for decades and you know what they find out ninety-four percent of the crashes that we get involved in are due to human error so if we can eliminate 90% of them that's an enormous opportunity oil demand for transportation could be reduced by 80% so imagine your Saudi Arabia and you want Saudi Aramco to do an IPO they send the value of your oil reserves and your plan and maybe it's going to be 80 to $100 a barrel long-term and this joker Larry burns comes along and says no no no I think 80% of the oil demand is going to go away for transportation maybe those reserves are 20 to $30 a barrel pretty

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big deal climate change and air pollution impacts of transportation can be mitigated because this is the pathway to electric Drive and diverse energy people can't own and operate a car could have enhanced accessibility I'm getting into that age cohort we're in time I'm gonna be worried about can I still go out and drive I'm so excited about still being able to get out and enjoy my life when I reach that point substantial amounts of land and structures for parking could be repurposed I've been invited to keynote the International parking Institute annual conference in Anaheim in June 3,500 people are gonna be at that conference imagine something as pedestrian as parking getting that kind of attention and our roadway throughput could increase significantly so these are great opportunities for all of us and it's a great business opportunity take that three hundred thousand miles per vehicle and let's say all you pocketed in profit from that

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dollar 50 down to 20 was 10 cents of that you made $30,000 off of that vehicle today's auto industry makes about so no wonder companies like General Motors and others are committing strongly to this mobility future and really getting into this game in a big way look at this a different way let's say those three trillion miles a year you create an autonomous driving system that gets a 10% market share and you make 10 cents per mile from that 30 billion dollar your profit I mean in great years companies like Apple might make 46 billion but typically the the highest profit companies in the US are around 30 billion a year so you might ask why would Google have gotten into this geez I think it's kind of clear why this would be an attractive thing to do if you're run on a business and it's not just people movement its autonomous trucks these are several companies

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involved I'm on the board of a1 on the lower-left peloton technology and they're trying to save fuel and make trucking more convenient by having them platoon we're going to have safer lower-cost faster service higher throughput trucking which is exactly what ecommerce is reaching out for I came home from golfing last fall and I had a UPS truck and a FedEx truck in the driveway simultaneously on nine packages on my porch my wife had been busy shopping we had a box from Fiji with water in it halfway around the world think about what's going on here it's pretty unusual my estimate is that we can reduce the cost of over the road trucking by over 50% and here's why think of the parts you can get off of this tractor that you no longer need because it's not going to be driven this is an engineer's dream how many of you here are engineers I'm an engineer the definition of an engineer or someone

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who likes to work with numbers but doesn't have the personality to be an accountant so I I'm in that group look at windshields doors mirrors seats shifters air conditioning systems door handles all that stuff goes away that power parts costs more than what the sensors processors and redundant controllers and software is going to cost in the future this is exciting I put this slide together about five years ago thinking about this six months ago Volvo comes out with this concept Volvo spirit concept my mother-in-law is named Vera I told my wife look on either they need a tractor-trailer rig after your mother so I think that's kind of interesting too but think about where this is headed really exciting for our engineer and a designer we're gonna get into it some people who might not be excited about this in this last mile look at that one in the top middle Amazon trying to get

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that package to your porch think about what's going on today 5,000 pound truck pulls into your driveway and a hundred and fifty to two hundred and pound person comes to your door and drops off something that probably weighs less than a pound and you just say there's got to be a better way this other company Noro is really pioneering some of the last door delivery concepts so pretty pretty substantial innovation there so what's my point the age of all autumn ability will eliminate the negatives of automobile transportation or enable compelling mobility and logistics experiences it presents attractive business opportunities that promises a sustainable future it will transform how people and goods move run and interact and it's not just the car industry or the energy industry it's finance insurance retail that road builders transportation services health care and real estate they're going to be

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disrupted I'm pleased to have with me today Tom Hoban who's president of Kitson and partners and Kitson and partners is developing Babcock Ranch which is about 40 miles north of where we are today 40 minutes north of where we are today and this is an example of how real estate can be totally rethought because of the technology that we're talking about Babcock Ranch is guided by sustainability and innovation 73,000 acres of Nature Preserve surround the site it's approved for nineteen thousand five hundred home units or 50 thousand people residing there in six million square feet of commercial space much of the downtown core Center is built people are buying homes and living there now and so Florida Power and Light has a seventy five megawatt solar plant on the north part of the property they're going to add to that and they have ten megawatts of storage and very importantly they have got ranchers pioneering autonomous

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vehicles that are electric to take that solar energy and marry it up with the autonomous system so really really exciting progress being made is just one example of what what can be done with these technologies so who are the winners I think consumers in society are going to win tremendously autonomous driving system leaders companies like Wayne mo Aurora Argo Cruz Automation stakeholders and electric vehicles strong transportation service brands and those who can provide great operations innovative experience designers proactive long-haul truckers and perking companies and e-commerce leaders and proactive states and communities like Florida Florida is extremely well positioned here flat nice weather well engineered uniform roads a proactive state government dense population along the coast so I really think Florida's a

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well positioned senator Brandes in particular has done a great job of getting in front of this for your state and I think you should be encouraged about that unfortunately there's gonna be losers companies that don't pivot to this future companies that build things like steering wheels or build things like transmissions people who drive for a living there's four million drivers in the United States and a lot of auto workers because these cars are going to have half as many or maybe even fewer parts on them than we see today oil and gas companies insurance companies traditional parking companies and traditional rental car companies a lot of winners a lot of losers so here's the big question that ensures on your mind win you've got to be careful when you ask questions I was with my wife the other night we were talking I said honey if anything ever happens to me are you get remarried Shino you know I couldn't do that and she's four years younger than me so come on you should she says okay I'll think about it I said well if you get

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remarried you're gonna let this guy have my car I've got this Cadillac XLR convertible and well that's your pride and joy I couldn't let him have I said can I just make sense I'd be gone at being the garage he says okay I'll think about it I said what about my golf clubs and you said she said oh no he's left-handed be careful what you ask you don't know how many of you think my stories are 2030 story oh this is something that you probably don't need to worry about until 2030 what about 20 25 come on be honest 20 20 how many think is a 20/20 story how many think it's a right now story okay here's why this is inevitable Daniella did a great job sensitizing you to the technology that's coming we've made great progress but we're not quite done yet it is inevitable I think the technology the consumer value the business opportunity and the proof of how you scale this is within a five-year window all of that coming together and if

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that's the case you've got to get ready for this tipping point now here's what you need to do comprehend the age of autumn ability that's why I wrote this book it's a narrative with exciting interesting characters understand it because it's going to impact your industry your company your job your community your family in your life so first comprehend that deeply understand the technology or the business models especially digital technology and customer experiences focus on those experiences you know it's not just that the technology came out of Silicon Valley they've been a leader in this whole mindset of design innovation focused on your experience get rid of the negatives in people's lives and you're gonna do some good things the technology innovation are very importantly operational excellence is going to be fundamental here positioned for the future especially to learn fast and that that's really really critical is to learn from things you know we're my wife were having some wine the other night sitting

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on our lanai and Sena she goes oh I love you I love you I go is that you talking or the wine talking she said it's me talking to the wine so you got to learn from that to target this tipping point don't worry about some econometric forecast or some McKinsey or Deloitte report that says the market share of autonomous cars will be 20% by 2030 all of that nonsense focus right on these four things happening does the technology work is the value there where the regulator's allow it and what society accept it get with people who can help you answer these questions get in front of the inevitable you know when you position something for something that happens sooner and it happens later at least you're ready but if your position later that happens sooner you're in trouble so I don't think it hurts to be getting in front of this comprehend this whole system it's not one sensor so be careful if you're an investor or someone calls up I got this

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great spinning later it's going to solve the autonomous driving ask them how did you know how to specify the requirements of your laser the only way you can do that is to understand this whole system I think the biggest risk of all of this is not getting to these benefits as soon as we safely can some people say oh don't let technology get in front of safety but the fact is if you take those 1.2 million people a year are dying on world roadways multiply it by 90% of those going away that's a million life safety year divide that by 365 days you're saving 3,000 lives a day if we can get this job done one day sooner we save 3,000 lives what are my concerns how many of you had a chance to ride in an autonomous car not very many the tendency it's human nature is to pass judgment prematurely I guarantee you when you get a chance to ride in one you're going to be nervous and anxious

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and uncertain and it's going to transition quickly to being excited and trusting and accepting and comfortable there's a lot of players here with vested interest because of the hundred-year-old system and they're gonna push back to try to slow this down and the jobs implications are very extreme and we've got to find ways for these people to transition up know that this is coming and help them prepare there's a lot to learn I don't want to leave you with the impression that everything is done there's a lot to prove and there's issues to resolve but this is a once in a century opportunity now this and this video is from way moe these are way Mo's vehicles and this is an example of the service that way Moe is providing in Chandler Arizona the real question is what point is this commercial and on a larger scale as you can see you've got some students going

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to school getting in a driverless car and the door shuts automatically and the car heads to its destination Chandler Arizona sort of like this area of suburb with fairly high traffic density speeds up to 45 55 miles an hour and you get a sense of some of the steering inputs that go into making this work again not everything has been handled and the overriding priority of companies like Wayne MO and others in this development field as safety as the overriding priority and these companies won't launch large-scale businesses until they know they have that resolved but it's it is inevitable what these cars can do today are absolutely profound and you got to enjoy the ride and it's really really exciting you know out of fairness to my wife I picked on her a bit tonight we have a great relationship and people ask me what's the secret for us we go out to dinner twice a week some wine

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candlelight you know music quiet walk home I go on Tuesdays and she goes on Fridays thank you very much appreciate it [Applause]