Friday, October 20, 2017

Driverless Cars – More Progress and Positioning – II

Here’s the next chunk.

When my parents bought a Volvo in 1969, that company had a well-established reputation for safety.  It’s been a long time since I’ve seen them in the news for anything other than being acquired by Ford, but here they are again.  Carol Glines’s July 21st Fox News “Safety first!  Volvo’s intelligent drive and sensing technologies work to mitigate accidents” showed how that company is still there, adding cameras, radar sensors, and systems emitting sound warnings and dashboard red lights when they see objects ahead with crash-causing potential.  These schemes, suitable for meatmobiles as well as autonomous vehicles, will not stop cars but will only warn drivers, which, at this early point in their development, is best.  In the meantime, here in the Catskills I’d be glad to have Volvo’s new capability, mentioned in the article, to detect deer.

Legality of driverless cars on public roads has understandably been a patchwork.  That may change.  As described in “House advances bill to clear road for self-driving cars” (Keith Laing, Detroit News, July 27), this Washington legislative body showed foresight, and excellent restraint, by clearing a bill which would allow both the public use of 100,000 self-driving vehicles and prevention of overriding that with state laws.  Per Laing, “lawmakers on both sides of the aisle said the compromise legislation represented a rare bipartisan consensus,” and while it did not please everyone, the House seems to have seen the wisdom of taking risks to reduce our 35,000 annual highway dead.  Kudos to all involved.

Given creeping consumer concern, it was a nice surprise to see “Study:  Majority Of Drivers Say Next Vehicle Will Be Autonomous” (Denisse Moreno, International Business Times, July 28).  Some of the valuable research Moreno cited showed that women, as well as younger people, were more positive about that technology, but were still concerned about driverless safety, and another study found that 72% had no interest in self-driving public transportation.  She also gave us an early glimpse of perceived brand perceptions, with a slim plurality of 19% of respondents saying Tesla seemed the best, and “nearly half” of respondents unable to name a single company doing driverless manufacturing.  General Motors, Ford, and the others have some public relations work to do. 

Popular Mechanics magazine was embarrassed about predicting, on one of its 1957 covers, an “aerial sedan” for 1967, and now we have heard from them again, in July 29th’s “Who’s Afraid of the Self-Driving Car?”.   Author Johanna Zmud, a Texas A&M Transportation Institute senior research scientist, made good statements and raised good questions, such as “the number of highly automated cars as a share of everything on the road will grow over time, but only relatively slowly,” and “how will they handle changing conditions on unpaved roads, which make up nearly half of the country’s 4 million miles of road?”.  She also said that “any argument that self-driving cars will be an antidote for congestion may be, at best, uninformed and specious” (I’d go for ‘overly speculative’), “what is certain is that we’re experiencing the most pivotal time in transportation history since we started building interstate highways,” and, perfectly articulated, “they’re not quite ready yet – and we’re not either – but it won’t be long.”  A fine, fresh voice.

Electronic hacking is a huge potential driverless issue, but that’s not the only kind.  In the August 4th “Researchers Find a Malicious Way to Meddle with Autonomous Cars” (Car and Driver), Mark Harris described “an attack algorithm” which, ostensibly knowing the internal workings of sign-interpretation software, involved stickers or apparent graffiti put on road signs to fool the systems into construing, say, stop signs as saying Speed Limit 45.  The University of Michigan scholars who developed and tested this destructive technology have done well to pinpoint it as a true possible problem, which, I hope, can be solved through protection of proprietary code and stronger penalties for road sign defacement.

Going back to the business side, we have “Driverless-Car Outlook Shifts as Intel Takes Over Mobileye” (Neal E. Boudette, The New York Times, August 8).  The chip manufacturer, as Boudette said, has jumped into the middle of the self-driving world by spending $15.3 billion on one of the largest and most successful driverless component makers, which is now producing “cameras, sensors and software that enable cars to detect what is ahead.”  Intel now plans to build 100 self-driving cars and will test them in, among other places, Jerusalem, with its extreme pedestrian chaos; per Mobileye co-founder Amnon Shashua, “if you can successfully drive autonomously in Jerusalem, you can drive almost anywhere in the world.”  Intel is now established as a competitor for Nvidia, which, per Boudette, “offers chips with more raw processing power.”  But we will see.

I end with the combined technical and philosophical big-picture August 11th Salon “Self-driving cars are coming – but are we ready?”.  Johanna Zmud and her co-worker Paul Carlson combined on more clear observations and queries.  On one, “how might our nation’s roads and highways, and the driving done by we humans ourselves, need to change as autonomous vehicles become more ubiquitous?”, I have maintained that the burden must fall on the cars and trucks themselves.  Indeed we “won’t likely find many in a dealer showroom for at least 10 years,” cities will see many more of them before they appear in any numbers on highways and in rural areas, and probably if not certainly “self-driving cars will be ready for the open road long before the open road is ready for them.”  Although we can and should expect that use of driverless vehicles will decimate American and world highway casualties, there will be problems during the long transition period, during which there will be a mixture of meatmobiles and what will, by the end of this century, just be called “cars.”  And, as correct as anything cited here, “we can expect it to be an eventful ride, no matter who’s in the driver’s seat.” 


Three more weeks down.  We’ll get closer to up-to-date next week.    

Friday, October 13, 2017

Driverless Cars – More Progress and Positioning – I

Once again, I could probably write a weekly blog on this topic alone.  It’s worthy of it too, as we will see this week and beyond.  So, let’s start to get caught up.
We start with Fox News’s June 30th “Driverless ‘CargoPods’ are delivering groceries to Londoners in new trial.”  That’s a valid autonomous-vehicle proposition, and will move from the manned trucks now in use to unoccupied ones texting or phoning customers when they’re outside, but how much will they charge?  As name recognition and brand establishment would seem less important for a venture both seriously price-competitive and startable on short notice, it seems wrong for any firm to accept losses for years to position themselves for eventual possible profitability, so online grocer Ocado should be expecting positive cash flow soon.

Less substantive is Brent Snavely’s July 2nd Detroit Free Press report that “Ford exec points to ‘great progress’ in driverless cars.”  That company has done better than moving toward “deploying its first fully self-driving car by 2021” which others have achieved already, such as by assembling a consortium including software maker Argo AI.  Ford’s vice president of research and advanced engineering may have said “we don’t worry too much about where the competitors are,” but we don’t need to take this sort of announcement, clearly for public consumption, seriously.

One area of autonomous vehicles which could go in many ways is the nature of their interiors.  With no need for them to be focused on the needs of drivers, car interiors will be blank canvases.  One of an infinite number of possibilities, described in “Autonomous cars will bring a moveable feast of products and services” (Cyrus Radfar, Yahoo Finance, July 2), is “the mobile mall,” using displays to simulate the interiors of a variety of stores.  Such would coordinate well with the inexorable-seeming trend toward online shopping, post-credit-card point of sale technology, and the preferences of those in the Millennial and Generation Z generations.  For car interiors we can use all the imaginative ideas we can find, and this one is certainly reasonable.  

We’re in the early stages of intercity rivalries in this industry, and one of the most prominent so far is “Michigan’s New Motor City:  Ann Arbor as a Driverless-Car Hub” (Neal E. Boudette, The New York Times, July 9).  To the well-established MCity proving grounds, that college town will soon add autonomous buses, as of early July was up to 1,500 vehicles which “radio their speed and direction to each other and to equipment like traffic lights and crosswalk signals,” and soon expects to make good use of all those personally-carried cellphones by having them broadcast pedestrians’ locations to traffic signals and on to cars.  Elsewhere in that state, additional and much larger proving grounds are being built in Ypsilanti and Flint, where, among other things, consortia can aggressively address the problematic issue of autonomous snow driving.

We saw more progress in such business conglomerations in “Waymo and Apple Pick Their Dance Partners for Self-Driving Cars” (The Motley Fool in Fox Business, July 10th.)  We now have Waymo, Google’s driverless vehicle concern, pairing with Avis and Chrysler, and Apple simultaneously announcing its Hertz partnership involving Lexus cars.  It’s well worthwhile for consortia to work with companies knowing about physically managing millions of vehicles, and also benefiting Hertz and Avis is easier entrĂ©e into the future of car rental, which, as the article points out, “will likely become more, not less, relevant in an autonomous world.”  The consortia themselves may include “non-exclusive partnerships,” which, as we will see in this series, are happening already.  These are good positive trends.

It is well worthwhile to keep an eye on how investors, as well as other analysts, see driverless-technology companies.  These same sources published “3 Top Stocks in Self-Driving Cars” on July 12th, a piece, which after suggesting that to some people such vehicles still seem “like a bit of cheesy ‘50s-era science fiction” and citing a well-obsolete Business Insider study suggesting “that there will be 10 million autonomous cars on the roads by 2020” (not that many only three years from now) and overly conservative HIS Automotive forecasts of 600,000 by 2025 (let’s try 10-20 million) and 21 million by 2035 (could be 200 million), then moved on to the merits of Waymo, onboard computer maker NVIDIA, and China’s driverless consortium leader Baidu.  All are potentially great buys, especially for investors with the stomach for risk, as any could also turn out like Stutz or Hupmobile.  

A problem with that huge Asian market is the subject of “China’s Grip on Maps Hinders Self-Driving Car Makers” (Liza Lin and Tim Higgins, The Wall Street Journal, July 13).  China, which we sometimes forget is not a free country, “is limiting the amount of mapping that can be done by foreign companies.”  A bad idea, and one reason why I do not think it will be anywhere near the forefront of self-driving progress.

Moving on to the regulatory side, we found out on July 21st from Kevin Roose in The New York Times that “As Self-Driving Cars Near, Washington Plays Catch-Up.”  Although there is no such thing as “a bill that would speed up the development of self-driving cars,” federal regulatory efforts, thus far mercifully mild, are still small in the proposed Highly Automated Vehicle Testing and Deployment Act of 2017.  That bill may do more to remove obsolete regulations than to create new ones, and, as Roose pointed out, state governments, wanting economic benefits from driverless business activity, have generally been lenient as well.

That’s three weeks’ worth – much more will follow. 

    

Friday, October 6, 2017

September a Strange Employment Data Month: We Lost Jobs, But Most Numbers Were Better, Including Latent Demand with the AJSN Showing We’re “Only” 16.7 Million Jobs Short

The story going into this morning’s Bureau of Labor Statistics September report was about our two major mainland-affecting hurricanes, Irma and Harvey, and what their consequence would be.  The numbers turned out worse, in some ways, than expected – instead of the consensus prediction of 90,000 net new nonfarm positions, we had a loss of 33,000 – but otherwise, headed by the seasonally adjusted unemployment rate which instead of breaking even as projected improved from 4.4% to 4.2%, they got better.  September seemed to be a good month, with unadjusted joblessness off from 4.5% to 4.1%, average private nonfarm wages up 12 cents per hour to $26.55, the count of those working part-time for economic reasons or keeping shorter-hours positions while unsuccessfully looking for full-time ones down 200,000 to 5.1 million, and the two measures of how common it is for Americans to actually be working, the labor force participation rate and the employment-population ratio, up 0.2% and 0.3% to 63.1% and 60.4% respectively.  The number of long-term jobless, however, did not improve, holding at 1.7 million. 

The categories of marginal attachment mostly bettered as well.  The number of those wanting work but neither officially unemployed nor looking over the previous year dropped over 300,000 to reach 3.3 million, while that of those claiming to be discouraged and those wishing for employment but momentarily not available for it fell as well.  The counts of those purporting no interest in employment and people wanting work but currently in school or training were exceptions.  Overall, the American Job Shortage Number or AJSN, the monthly measure of latent demand for jobs across 11 different employment categories, fell 940,000 to reach its lowest outcome since April, as follows:





Since the AJSN is not seasonally adjusted, we expected some decrease between relatively jobs-poor August and jobs-rich September, but the drop was more than that.  That was also shown in the difference between last month and a year before, also over 900,000 and almost all due to the almost exactly one million cut in the number of officially unemployed.  Note that according to the BLS, “persons with a job are counted as employed even if they miss work for the entire survey reference week… regardless of whether or not they are paid.”  Although that 7-day-period started the day Irma reached the Florida coast, this BLS rule, unless people knew their jobs were gone with the storm, canceled out most of its September statistical effect. 


It is peculiar indeed that employment data for a month with so few work opportunities added should look so good, not only in spots but otherwise across the board.  Overall, it is now best to judge September’s data as showing potential but not yet solid improvements.  If its gains hold, and October’s new positions reach at least 300,000, we can take credit for an unexpectedly fine month.  If not, we will need to average these two together to see just how well we are doing.  So, although I couldn’t clearly see the turtle through the wind and rain, I think I saw another step forward.