Otto is a Silicon Valley startup founded by four ex-Google engineers, including Anthony Levandowski, the man who built Google’s very first autonomous car. Their workforce comprises people from Apple, Tesla, Cruise Automation, and Here Maps. They are working on retrofitting self-driving technology into big rigs. Their thinking is that automating trucks rather than passenger vehicles is more palatable financially and to regulators.
Currently we are seeing a long-haul trucking labor turnover of more than 90% according to Bob Costello, chief economist at the American trucking Association. The industry estimates it will need to hire a total of 890,000 new truck drivers over the next decade.
Two thirds of US freight is hauled by truckers, which in 2015 was $54.8 billion worth of goods. So if we’re seeing a 90% labor turnover it’s a problem for everyone. My own opinion, which I’ve expressed many times, is that a percentage of this freight could be hauled by rail, particularly now as coal and oil volume is diminishing.
So Otto has come along at an opportune time – the trucking industry needs all the help it can get. But will this help?
Backchannel interviewed Lior Ron one of Otto’s co-founders. Here are some snippets of that interview:
“Trucks are unsexy, and that’s why we’re doing it. It is old technology, and a huge market with a lot of deep issues around cost. But first and foremost, there’s a big societal component. Trucks cover 5.6% of all highway miles but cause 9.5% of all fatalities, and about half of truckers are away from home 200 nights a year, sleeping in parking lots and rest areas.”
“Because of federal regulations, a truck can only drive 11 hours a day today with a single driver. After 10 hours, the accident rate goes exponentially higher. If we can make it drive safely 24/7, more than doubling its capacity and utilization, that’s a very strong financial argument.”
“We want to get the technology to the point where it’s safe to let the driver rest and sleep in his cabin and we can drive for him, exit to exit. This is what allows us to change 11 hours’ driving into 24.”
So essentially Otto are making highways a safer place for everybody which is a good thing. Their goal is also to double a trucks capacity and utilization by having it run 24/7. This makes absolute sense financially for trucking companies and owner operators.
So the question becomes, what does the driver do while the truck does all this driving? It seems to me that the truckers is still away from home 200 nights a year which doesn’t address one of the main drivers (pun intended) of the 90% labor turnover.
Don’t get me wrong, you all know I’m a very strong technology advocate, autonomous vehicles are inevitable. If they can make our roads and highways much safer that’s a big win for everyone.
But I really don’t know whether it’s good or bad for the long-haul trucking industry per se. What is the point of having a self-driving big rig if you still have to have a driver in the cab? Both the Daimler and the Scania autonomous trucks need drivers monitoring everything too. Maybe the third or fourth generation technology won’t require a human assist which is when it will really come into its own.
In my opinion Otto currently has the best solution for the trucking industry. It’s focused on highway driving and it’s a relatively inexpensive retrofit to your current truck. The exact cost is uncertain but I’ve seen figures between $35,000 and $50,000. I guess it depends on the type of truck too.
But right now no way is Otto going to be a quick fix for long-haul trucking fleets problems. The only way to help with that is ship by rail. And that’s something I can definitely help you with! Call me at (505) 908 – 1911, I’d be very happy to have that conversation with you.