Disruption is now at the doorstep of the disruptors

Upon returning from a business trip to the USA last year, my wife recounted a story that she found sad. The Uber driver from her hotel to the airport (in California) was an elderly man who said he needed to be an Uber driver to supplement his retirement income. To her, the fact that the cost of living in the USA is so high that a person cannot retire was sad.

South Africa is in a similar situation where many consumers are turning towards being Uber drivers and Mr Delivery/Uber Eats driver to supplement their income. Hustle culture has spread from the USA to become a global phenomenon.

The emergence of e-hailing taxi services and online delivery services were significant disrupters for the metered taxi industry and employees who made a living working as delivery drivers for restaurants. In fact, the e-hailing taxi service model has faced significant, often violent, resistance in many countries.

This will be disrupted once again as a pilot project is rolled out in California, which will see driverless taxis take to the road.

Improving tech and a high revenue outlook

Some of Silicon Valley’s top engineers have spent the last decade writing code for driverless cars to expertly manoeuvre around the most complex streets in San Francisco.

The article points out that, faced with an orange traffic cone deliberately placed on the hood, the cars experience the robotaxi equivalent of a PC screen turning blue: they become paralysed and clog up traffic. However, it seems as if the tech behind these taxis is getting better. The idea convinced investors to pour stunning sums into autonomous tech over the past decade — more than $50bn, according to McKinsey. Everyone from small start-ups to legacy carmakers to Apple and China’s Baidu were taken with the idea.

Modern driverless taxis will use three main types of sensors to build a 3D picture of the environment around them:

• Lidar transmits millions of laser pulses per second; the direction and distance of the reflected pulses builds a detailed virtual 360º 3D model;
• Radar is similar to Lidar but uses electromagnetic waves to detect presence and movement. This is particularly useful when visibility is low (in rain, fog or snow); and
• Optical cameras are useful for detecting and differentiating the colour of things such as traffic lights, construction zones and emergency vehicles.

The article adds that, in addition, an inertial measurement unit provides accurate positioning, and supplemental sensors detect elements such as emergency vehicle sirens. Software processes sensor data into a real-time view and uses an extensive database of existing information supplemented by AI and machine learning to predict the behaviour of surrounding vehicles and people in order to plan the vehicle’s movement. Both General Motors and Amazon are launching significant projects that will eventually see them make a significant transition into driverless vehicles.

Mary Barra, CEO of GM, has told investors she expects Cruise (GMs driverless vehicle venture) to generate $ 1 billion in revenues in 2025 — when it expects to have commercial operations in the USA, the United Arab Emirates and Japan — and $50bn a year by 2030. “We’re on track to outpace those projections,” says Kyle Vogt, co-founder and CEO of Cruise. “We don’t want to just have this massive safety, and convenience, and cost benefit in the US. We want to do that wherever people are travelling, which is everywhere on the planet.”

The article adds that Barra argues that people will be surprised just how quickly driverless services will arrive and then expand. “We’re going to get to the point where nearly every mile driven in the US is by an AV,” Vogt adds. “There are 3.7tn miles driven [per year]. So you do the math on that: At even a buck per mile, that is a massive industry. It’s far larger than Google.

“And so the question becomes, how quickly can we do it? . . . At this point, there’s very little technical risk that remains,” says Barra. Research from McKinsey suggests these projections are too rosy. It projects that, by 2030, global industry-wide revenue for autonomous driving tech will be $25bn at most — half what Cruise believes it alone will earn.

But, like Cruise, McKinsey assumes that once the technology is truly ready for the mainstream, revenues will accelerate to between $170bn to $230bn within five years.

Consumer excitement

An AFP article pointed out that on Tuesday evening (22 August), accompanied by AFP, Isaac, a San Francisco resident and stay at home Dad, ordered his first ride on Cruise’s app.

“Percussion,” the vehicle’s name, arrived quickly. But instead of taking the direct route, which would have led to a supermarket in less than five minutes, the trip followed a long, unexplained detour. “It’s odd to me that the steering wheel even turns… It’s kind of ghostly,” Isaac observed as the car pulled away embarking on the journey. “I’m actually impressed. It’s decent at braking. It’s not all psycho about slamming on the brakes and accelerating really quickly,” said Isaac.

The article adds that Isaac turned his attention to a quiz on the screen before him. But he disagreed with the answer about the best burrito in San Francisco. “It’s a good driver but I’m not sure it has good taste in burritos.” Twenty minutes and a dozen questions later, Percussion finally arrived at its destination, but parked quite far from the store, probably because of the roadworks. Not that Isaac was discouraged: “It was awesome. I would do it again anytime.”

“It’s very peaceful. There’s no chatter. There’s not a weird radio station playing random music,” he observed. And if it was the same price as an Uber “I would go for the robot because I’m kind of antisocial.”

The AFP article points out that Katherine Allen climbed into a white Jaguar, which pushed out carefully into the traffic in a busy neighbourhood crisscrossed by jaywalkers and cyclists. The 37-year-old lawyer has been voluntarily testing Waymo’s robot cabs since the end of 2021. At first, there was always an employee of this subsidiary of Alphabet (Google’s parent company) on board, there to grab the wheel if needed. And then one night with very little warning, the car came to her unchaperoned. “I was really nervous the first time, but not too nervous that I didn’t want to take it. I was excited too,” she said. “For the first two-thirds of the trip, maybe 20 minutes or so, I was freaking out and then all of a sudden it just sort of felt normal, which is weird, because it wasn’t normal.”

Human skills demand

“Ever since the start of the Fourth Industrial Revolution, there have been fears of mass unemployment as machines replace humans. Instead, the demand for human-based goods and services has risen in line with the increased capabilities of machines. There is a great danger from AI if we allow it to become self-designing.” This was a quote from Steven Hawking’s last television interview in 2018.

While there will always be a demand for human-based skills. Despite this, technology will disrupt certain industries, ask Multichoice. It is up to Chief Restructuring Officers and Chief Transformation Officers to ensure enough planning around Porter’s Five Forces takes place and that upskilling needs to be a significant feature within companies.