Women of Note:
A series of interviews with leaders who are making their mark in the industry
Board Member and General Partner at Playground Global
Laurie is an experienced board director and strategist skilled in advising companies and founders in imagining, building, and scaling disruptive technologies like artificial intelligence, cybersecurity, and cloud computing. Savvy in fundraising, M&A strategy and negotiations, cybersecurity oversight, and in devising complex, unconventional strategic alliances/joint ventures. Playground Global is a Palo Alto based venture firm that partners with entrepreneurs working at the intersection of atoms, bits, and AI.
Laurie has been on various director and advisory boards, including Tesla, Zoox, and Accenture. She was also a Senior VP of Business Development with Qualcomm.
We were happy to be able to talk to Laurie and ask about her background and experiences.
1) How did you get started in automotive/robotics/AI/autonomous/mobility?
I started building and programming robots as a young child, and I studied computer science and AI in college. I was amazed and astonished that one could write a program at a desk and cause physical actuation — make something move across the room, play a sound, wave an arm, etc. It was a pivotal experience.
When the founders of Tesla approached me in 2002 with the groundbreaking idea to build a new, high-performance electric car that was energy efficient, good looking and great fun to drive, I was intrigued. When I got a chance to drive the first prototype not long after, I was hooked.
In early 2011, Sebastian Thrun sent me on a terrifying autonomous vehicle ride through an obstacle course at high speed in one of the early Google Prius AVs. My mind was spinning as I imagined exciting new possibilities for the future.
When the Zoox founders approached me in 2015 with their plan to reduce vehicle crashes, congestion, and pollution by developing an autonomous mobility service for cities, I was blown away by their vision. I thought about my own distractions while driving and remembered how difficult it was to try to get my parents to stop driving as they got older. I had worked closely with the sensor fusion teams at Qualcomm while running Qualcomm Labs, and thought that it was high time to harness the available technology to save lives and make cities safer and cleaner.
2) How has industry changed since you started?
There is now a much deeper appreciation, as well as recognized consumer and commercial demand for electric vehicles. Large OEMs and small start-ups are innovating on new electric drivetrains, vehicle architectures and vehicle designs. I am hopeful that the adoption will accelerate so that our air is cleaner around the world.
Autonomous vehicles are being developed and in use in agriculture, warehouse logistics and factory automation, mining, floor sweeping and vacuuming, as security guards, on oil and gas platforms, at ports, in deep ocean, for last-mile delivery, and of course, as robotaxis in cities. It is a very exciting time for the robotics and AV industry.
3) Where do you think the industry (automotive/robotics etc.) is going in next 5 years? Trends?
Multi-sensor fusion, AI/ML software stacks, advanced 3D mapping, perception, path planning, tele-operation and fleet optimization technology innovation has seen incredible investment in the last five years. I expect the next five years to be a time of deployment, further development, and continual improvement. The many potential applications for these new technologies is cause for optimism, and I look forward to seeing the great minds that have been applied to this work in the last decade bring their work to fruition for broad commercial and consumer adoption in the next decade.
Compelling new software platforms and solutions are also being developed for improving trucking and logistics, like Leaf Logistics and Platform Science.
4) What would you advise to women starting out or wanting to get into the industry?
Dive in and learn! Education is a continual process. I was fortunate to catch the technology bug at a young age, but it’s never too late to start. Technology evolves at such a fast pace; everyone needs to be re-educated and re-trained frequently.
There is the potential to stop the avoidable 1.4 million deaths each year from vehicle crashes, and the benefit to humanity is really compelling. The work in this industry is rewarding, interesting and exciting. It’s such a great time to innovate on new mobility and transportation solutions.
The State of Ride-hailing
In the first half of 2020 life came to a standstill. Shelter-in-place was ordered almost across the globe. Most of us stopped commuting to work, concerts were canceled, restaurants closed. Put simply, physical mobility – wherever possible was replaced by virtual mobility. As a result, the overall demand for all sorts of transportation fell drastically. This post looks at the COVID-19 impact on the ride-hailing sector in the U.S., now and in the future.
Sharp drop in demand
The U.S. main ridesharing players (Uber and Lyft) acted very quickly to respond to the virus outbreak: they put measures in place focused on community health; both companies suspended shared rides, and now require passengers and drivers to wear face masks.
Despite these measures, the global adoption of a shelter-in-place order, caused dramatic financial damage to both Uber and Lyft. In April, ride bookings were about 80% lower compared to the same period last year. According to Uber’s CEO Dara Khosrowshahi, Uber has a highly variable cost structure which means that when the booking and revenues decrease, their costs also follow. As a response to the global pandemic, Uber also quickly ramped up the food-delivery program UberEats: bookings are up by about 54% YoY. Though food delivery is not as profitable for the company it does serve for now as a lifeline. Uber is also experimenting with other contactless deliveries. Lyft does not have adjacent services, the strong focus on ridesharing makes the fall in ride bookings more severe for the company’s bottom line.
The employment cost of COVID-19
A major and most immediate impact of the shelter-in-place is on the drivers themselves. Many drivers who relied on the proceeds from driving have now been left with a decreased source of income. Additionally, the previous classification of drivers as contractors prevents them from applying for unemployment benefits. The exception is the state of California, where the attorney general and a coalition of city attorneys in the state sued both Uber and Lyft for wrongfully classifying drivers as independent contractors in violation of state law (Assembly Bill 5 past late last year) that makes them employees. This lawsuit does not mean drivers can apply for unemployment benefits during this crisis but could secure drivers in the future.
In the past, one of the biggest cost categories for both Uber and Lyft were incentives to attract drivers to the platform because in many markets demand for rides was exceeding the supply of drivers. With US unemployment rates skyrocketing to almost 15%, both companies have experienced a high number of new driver sign-ups (further diluting the opportunity to earn a living wage by any of the drivers/delivery person) and hence this expense item has decreased significantly. To further decrease costs, companies announced massive layoffs. In April, Lyft laid off 17% of its employees, executives took a 30%pay cut, and remaining employees’ pay was reduced by 10%. In early May Uber laid off 6,700 (25%) of its employees (mostly from its recruiting, customer service organizations as well as teams working on ‘moonshot programs’ like ELEVATE and AVs), and Uber’s CEO will forgo his salary for the rest of the year.
The layoffs may suggest that companies are preparing for a long-term crisis, more than a temporal dip in ride bookings. In fact, last month Ming Maa, the president of Grab, a Southeast Asian mobility giant, told The Information that the company is preparing for the crisis to last as long as 18 months.
AVs in times of COVID 19
In times of COVID-19, the main precaution people can take is to avoid or minimize contact with other people. This would suggest that driverless robotaxis (if available) could be a safer bet when it comes to ride-hailing. However, when you look at major players working on the solution the situation does not look much better. Cruise, a self-driving arm or GM, has just announced 8% layoffs (150 people). Earlier this year Layoffs happened at Zoox (120 people) as the company stopped testing operations. Additionally, rumor has it, Zoox who was unsuccessful in closing the round C in the last few months may be searching for a buyer, potentially by Amazon. One might speculate that Amazon’s priority would be to focus on autonomous delivery vs taxi operations. The exception seems to be Waymo, which halted commercial operations in March but has since resumed its operations in Arizona as well as the company’s private test facility in California’s Central Valley. Initially, only the test fleet is operating, but the company plans to resume Waymo One, the self-driving ride-hailing service. In the Bay Area Waymo plans to resume the testing and provide deliveries as this will allow the company to sidestep the restrictions. And at this point in time, many OEMs have pushed out AV launches for several years based on demand, readiness, testing, regulations, COVID-19, and other factors.
The road ahead
If we looked at just the above, the world would look very gloomy. No one has a crystal ball; but to understand what is ahead, we can look at Didi, as China’s experience of the pandemic is a few months ahead of ours. Didi’s peak daily ride-hailing orders surpassed 30 million according to Reuters. Interestingly, Didi’s “chauffeur” (designated driver offer, in which Didi’s drivers take home car owners too inebriated to drive themselves) has hit record-high usage in early May as Chinese go out partying again.
Early signs suggest similar growth scenarios for US ride-hailing companies though probably we should not expect a V-shaped recovery.
From stopping the bleeding to profitability
There are, however, some benefits that come from the COVID-19 pandemic and the recession that has followed. Both companies took the opportunity to thoroughly re-evaluate their businesses and could use the current economic and health crisis to switch gears from growth mode to profitability mode (as expected by investors).
What does this mean in practice? Well, to put it simply, cut the costs. There are few ways to achieve that:
1) Exit the poor-performing markets
2) Re-evaluate investment in non-core projects
3) Augment their Bay Area employee base by leveraging less expensive geographies for a less expensive workforce. This can be done by Uber (less so by Lyft) as it already has operations in 80 markets and the recent “work from home” experiment proved this to be very feasible.
Six months ago, the whole transportation industry was talking about VC-subsidized ride trips and how difficult it is to make money on ride-hailing. Time will tell if COVID-19 indeed accelerates the path to profitability. Ride-hailing is still a viable and important aspect of urban mobility. With cost-cutting measures as well as new safety assurances the industry is adapting.