[msb-alumni] GM, Honda are betting Cruise founder Kyle Vogt can lead the autonomous car pack
- From: Steve <pipeguy920@xxxxxxxxx>
- To: <msb-alumni@xxxxxxxxxxxxx>
- Date: Tue, 6 Nov 2018 15:24:01 -0500
BlankGM, Honda are betting Cruise founder Kyle Vogt can lead the autonomous car
pack Marco della Cava , USA TODAY
SAN FRANCISCO -- Kyle Vogt was 14 when he saw the light, sitting behind the
wheel of his father's car as
it crossed the arrow-straight highways of the American Southwest. 'I had my
learner's permit and as I was driving from our home in Kansas to Las Vegas
for a remote-controlled battle-bot competition and'I thought, 'Surely this can
be done by robots, just read the lane markers and keep the wheel steady,'
Vogt says with a laugh. 'So that was the beginning. Nearly two decades later,
Vogt, 32, has made that epiphany his mission in life. As founder and CEO
of Cruise, a self-driving automotive tech company that General Motors bought
for
$1 billion in 2016, Vogt has sped'to the front of the autonomous car pack
thanks most recently to a big partnership deal with Honda. There are dozens of
car companies and tech startups tackling the self-driving car space, given
that ride-hailing fleets with no drivers promise untold riches assuming tech
costs and car ownership both decline. But Cruise arguably has only one main
competitor: Alphabet-owned Waymo, which has been at this for a decade, and for
a
year now has been busily testing hundreds of self-driving Chrysler Pacifica
minivans in Phoenix. More: What's it like to run errands in a self-driving car?
Some Phoenix regulars are sold on Waymo More: Waymo will give shoppers
rides to Walmart with its self-driving cars Waymo is aiming to make its
beta-testing program public this year. Cruise is aiming to start picking up
passengers
here in'its Chevy Bolt-based self-driving cars sometime in 2019. Vogt is vague
on whether the program will be limited to a select group of riders at first,
in an echo of Waymo's current beta program. But he wishes to make one thing
clear:'Cruise's testing'across this hilly, traffic-snarled city will ultimately
yield more capable robot cars. That's because since 2016, Cruise has deployed a
small group of cars (at first 50, now 20) on what he describes as the
comparatively
easy-to-navigate streets of Phoenix. The interior of General Motors'
self-driving taxi, called the GM Cruise. GM expects to begin mass-producing the
Cruise
in 2019. (Photo: General Motors) 'Just look at construction zones for one,'
Vogt
says during an interview'with USA TODAY inside a spartan conference room
at Cruise, whose headquarters just south of downtown San Francisco seems as
heavily guarded as Fort Knox. 'Those (zones) pop up 30 to 40 times more often
for our cars in San Francisco than they did when we were testing our own cars
in
Phoenix,'he says. 'That means as an engineer working in Phoenix, you can
just write that off as a problem. But we're dealing with that, with emergency
services vehicles, with bicyclists. It's a lot more challenging. Vogt also
likes to highlight how the software and hardware in Cruise vehicles is fully
integrated thanks to Cruise being wholly owned'by'GM, a comparison perhaps
to Waymo's vehicle partnerships with Fiat Chrysler and Jaguar Land Rover. "Look
at these sensors, they've all got air- and water-cleaning nozzles built
into the housing, and all the connections and wiring to our computers are
auto-grade materials," he says during a brief tour of Cruise's cavernous
engineering
facility. One floor down'is another key part of the Cruise self-driving service
plan: a'room'that has echoes of an air-traffic control center, with glowing
screens and about a dozen workers on headsets. (Photo: General Motors) This is
where video and data comes in from a self-driving car that is momentarily
stumped by its surroundings and is requesting'remote-control help. "The cars
off-load to humans about 0.1 percent of the time during the (test) rides,
but we still want to have this here to build trust with our users," Vogt says.
"Besides, if we're driving one'mile, we want to get the maximum value, the
maximum knowledge, from that mile. Most mobility experts say that the race
toward autonomy is not a winner-take-all proposition. In the end, much like
the airline industry has big players like'Boeing and Airbus providing planes
for
travelers to'fly on, a few big companies will be making the self-driving
cars that shuttle us around in the decades to come. But in the short run, Vogt
is indeed implying that the self-driving fleets that win over those
early-adopters'(polls
show that half of respondents remain nervous about riding in autonomous cars)
will be companies that have demonstrated an ability to handle extreme urban
road conditions and, eventually, extreme weather. Given that self-driving
ride-hailing fleets remain largely a mobility vision of the future, the company
that dominates this space will need brilliant minds and lots of money. While
Waymo's funding appears unlimited, Cruise will have to keep an eye on its
cash pile, s ays Bryan Reimer, a research scientist and self-driving expert
with
MIT AgeLab. 'As part of Alphabet (the parent company of Google), Waymo
has a'limitless budget and no concerns about immediate financial returns.
Cruise
has GM's resources, the recent ($2.25 billion) investment from (tech investors)
SoftBank, and now the Honda deal ($2.75 billion over 12 years). We'll see if
it's enough," he says. A Waymo self-driving minivan. (Photo: Waymo LLC) Vogt
acknowledges that challenge and adds that the cost of a self-driving car ride
has to come down quickly to guarantee enough consumer adoption to make the
program financially viable. Collaboration will be critical to that goal, says
Karl Brauer, publisher of Cox Automotive. He says companies that go it alone
in this space risk lagging behind. 'What's better than one automaker aligning
with a tech company like Cruise? How about two automakers, GM and Honda,'
says Brauer. 'What's particularly impressive is that Cruise has avoided
becoming
a subdivision of GM. That could have torpedoed their success. But Vogt
has steered clear of that. More: GM, Honda to collaborate to deliver
self-driving cars for 'global deployment More: 5 best freeway corridors for
self-driving
trucks Vogt credits GM CEO Mary Barra with letting Cruise stay in San
Francisco,
where the company has been hiring feverishly ' the company has 1,000 employees
and expects to add hundreds more in 2019. 'Mary came in and said, 'We know what
you do is different and we don't want to stifle that,' and that didn't
come without risk on her part,' says Vogt, noting that where GM's success is
predicated on 'following a game plan to the letter, we have to celebrate the
failures as well as the successes, so it's different. Cruise CEO Kyle Vogt,
shown here speaking at a technology conference, made his first millions by
selling video game streaming site Twitch to Amazon for nearly $1 billion, and
later Cruise to General Motors for $1 billion. (Photo: Cruise) Cruise's decision
to use San Francisco to test its 180 Bolt-based electric cars ' which in the
future will be joined by a new Cruise-branded vehicle made jointly by GM,
Honda and Cruise ' hinged on that fact that urban centers, with their high Uber
and Lyft usage, can support higher prices for those initial self-driving
car rides. But the calculus that drives Vogt and his investors involves a
scenario where self-driving vehicles are circulating 24/7 in major U.S. cities
and are charging a fraction of what a current Uber or Lyft ride commands. 'I'd
like to draw your attention to the size of the market,' Vogt says, eyes
narrowing. 'There are 3 trillion miles driven each year in the U.S. now, and
Uber and Lyft only access about a half a percent of those miles, because having
a human chauffeur you around is still very expensive so most people prefer to
have a car. 'But when autonomous cars drive down that cost-per-mile number,
and people decide to save on car and insurance and gas payments, we see us
capturing 50 percent'of those miles,' he says. 'Even at a dollar per mile, when
you're in the trillions of miles, that's big money. Vogt adds that he's not in
it for money. Rather, he decided five years ago that his next venture had
to have a huge positive impact on society. The safety and ecological benefits
of
populating the planet with autonomous electric cars fit that'bill. The
young entrepreneur certainly can afford to such'idealism. After attending MIT,
where he honed his robotics skills, Vogt detoured into the San Francisco
startup scene, co-founding'Justin.tv which morphed into the video game
streaming
site, Twitch. Amazon bought Twitch in 2014 for $970 million. GM president
Dan Amman, right, with Cruise Automation co-founders Daniel Kan and Kyle Vogt
in
2016. Ammann led GM's effort to acquire Cruise and has overseen its growth
since. (Photo: General Motors) Vogt and his family (the couple'has'a four-month
old, 'which is all I do now when I'm not at work 11 hours each day," he
jokes) live in a $21 million Pacific Heights mansion and, by any measure, would
be fabulously wealthy for centuries even if Vogt never lifted a pencil
again. But that prospect bores Vogt. 'Life is short as it is, you're only awake
16 hours a day,' he says. 'For a lot of people, a few hours of that is
wasted each day commuting, just sitting in a car. What a waste of human
potential. To get back your time, that's a gift. It's something worth working
for.
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