Why you should care
Because self-driving trucks may hit the roads sooner than cars.
Some startup offices have a nice view, a Ping-Pong table, maybe even a slide. But Otto’s mammoth headquarters is an austere furniture warehouse with an odd mishmash of retro sofas, with dressers for tabletops. It’s deafeningly loud, echoing with the pounding of hammers and an idling fleet of 18-wheelers. A big rig comes hurtling toward me to ply down the highway for a test drive — no one will steer.
This somewhat startling vision may be a premonition into our future. As companies like Amazon and Domino’s eye driverless cars for delivery services, transportation wonks from the NYU Rudin Center for Transportation suggest businesses will start relying on driverless fleets as early as 2030. But don’t forget cars’ lumbering cousins. The $726.4 billion trucking industry needs disruption too, as truckers log 11 million miles and lug 14 billion tons of cargo daily. In 2015, the American Trucking Associations (ATA) reported a shortage of nearly 50,000 drivers, projected to grow to nearly 150,000 by 2020. And driverless trucks could end up being a “more efficient, safer and productive fleet” than today’s gas-guzzling big rigs, says Chris Spear, president of the ATA. Otto co-founder Lior Ron has seen this opportunity and is moving in. His startup launched in January and was quickly gobbled up by Uber this summer in a deal worth $680 million; he’s staying on as a leader of the division.
The highways will soon be crowded with Otto’s competitors: Transfix, Freightliner, Daimler and Peloton are building their own battalions of self-driving trucks in California, Nevada and Texas. Ron’s approach: Rather than shell out some $300,000 per big rig and create self-driving semis from scratch, as the other companies attempt, Ron plans to soup up the country’s existing 4.3 million trucks with radar, lidar laser sensors and cameras. This technology will sense objects, lights and sounds in the same ways our eyes and ears do — but with better accuracy. And like the driverless truck competition, juggernauts like Google are spending more money and time building their own self-driving cars, with no reported plans to retrofit cars already on the road. (None of the competitor companies replied to requests for comment.)
He’s bold. He’s brave. He’s definitely taking risks.
Ron’s vision isn’t exactly what many think of when they imagine automation lumbering into an old industry. He figures the country’s 3.5 million truck drivers will keep their jobs, relying on sensory gear and mapping technology to offer a much-needed break from driving. They’ll still drive a consecutive 11 hours a day — the maximum legal limit. But self-driving trucks can pick up the rest of the slack when these long-haul drivers are off duty. “I don’t think this technology is going to threaten jobs anytime soon,” predicts Spear of the ATA.
Today, Ron’s six Volvo trucks are rolling down Bay Area highways on test runs sans drivers, one of them recently delivering 2,000 cases of Budweiser beer on a 120-mile trip. Ron expects his trucks to hit the roads in a number of years, potentially sooner than Google’s scrappy self-driving cars.
Uber declined to comment on future plans for Otto, but we guess Ron fits into the company’s master plan to beat Google to the driverless-car finish line. Uber’s speed in that race is part of why Ron agreed to the acquisition so early, rather than spurning the bigwig à la Snapchat’s rejection of a cool $3 billion from Facebook two years ago. The move is savvier than the numbers show, though: Ron and his co-founders had self-financed Otto and took their acquisition entirely in stock, about 1 percent of Uber’s valuation, or about $680 million. Plus, they’ll keep 20 percent of Otto’s profits — a huge opportunity for a company with no product in hand.
Bespectacled and mild-mannered, Ron is far from the image of a stereotypical trucker. The Stanford MBA was raised in Haifa, Israel, and had originally wanted to be an attorney, but he dropped out of law school on day one and enrolled in a computer science program at Technion-Israel Institute of Technology one day later. Upon graduation, he spent seven years in the Israel Defense Forces, moving up the ranks until he eventually served as the chief technology officer for the main intelligence division.
The time in service threw him “into the water without a jacket, without any lifeline,” he says. During that time, Ron worked with Prime Minister Ariel Sharon to build “life-or-death” computer systems that made sense of disparate intelligence data from satellites, informants and other sources. Ron compares the “fog of war” to life at a startup. And his compatriots from his IDF days see similarities too: “He’s bold. He’s brave. He’s definitely taking risks,” says Yael Evron, who worked alongside Ron in the military.
Even so, self-driving vehicles have far from an easy road ahead. Tesla’s recent fatality in which a 40-year-old man rammed into a tractor-trailer while on Autopilot mode still has the public on edge. Plus, the biggest technical challenge for Otto may not be retrofitting trucks, but rather dealing with unpredictable human drivers on the highway. “With a truck, the issues of any accident are actually more catastrophic. You have to work harder at safety” than for smaller self-driving cars, says Brad Templeton, a self-driving consultant and professor at Singularity University. One crash, a bad lawsuit, you do the math.
Trucks, however, might have their advantages. Otto’s vehicles drive along fixed routes and only on highways, leaving the messy logistics of pedestrians and traffic lights up to the human driver. Or to the big vehicles’ younger siblings — good old sedans.