Self-Driving's Breakout Moment — With Kyle Vogt

Kyle Vogt is the CEO of Cruise, a self-driving car operator owned mostly by General Motors. He joins Big Technology Podcast to discuss self-driving's rapid expansion, explaining why the technology is hitting an inflection point and how quickly these cars are filling the roads. Tune in for a conversation filled with real data and direct analysis of what might be one of the most meaningful technologies developed in our lifetime. --- Enjoying Big Technology Podcast? Please rate us five stars ⭐⭐⭐⭐⭐ in your podcast app of choice. For weekly updates on the show, sign up for the pod newsletter on LinkedIn: https://www.linkedin.com/newsletters/6901970121829801984/ Questions? Feedback? Write to: [email protected] Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Alex Kantrowitz?

  The CEO of Cruise comes on to talk about its rapidly expanding self-driving car efforts and how quickly autonomous driving can take hold. That and more coming up right after this. This episode is brought to you by Genesis. What does it actually take to put a Gentic AI to work across an entire enterprise? I recently spoke with Genesis chairman and CEO Tony Bates about why orchestration is emerging as a competitive advantage in customer experience and what companies need to get right in the AI era. Then I sat down with Adam Mitchell, head of enterprise business solutions at Voya Financial to go inside a large-scale agentic CX transformation, including the business decisions, trade-offs, and lessons

• 0:43Alex Kantrowitz?

  along the way. You can watch both conversations now on my YouTube channel today. It's never been more challenging to get frontier compute. How do you know where to look, who to trust, or how much to pay? Akash is an open cloud that provides easy access, flexibility, and peace of mind. That's how companies like Razer were able to cut their inference cost by 15 times. Visit akash.network/alex for a free consultation. That's akash.network/alex for a free consultation.

• 1:16Speaker 01

  LinkedIn presents.

• 1:21Alex Kantrowitz?

  Welcome to Big Technology Podcast, a show for cool-headed nuanced conversation of the tech world and beyond. I've been tooling around San Francisco and self-driving cars for the past couple of weeks, and I can't wait to talk to you about the experience and bringing on someone who can tell us just how quickly this stuff is going to make its way into cities across the US and the world. We're joined today by Kyle Vogt. He is the CEO of Cruise. Kyle, so great to meet you. So great to have you here. Thanks for coming on the show. Honored to be here. Thanks, Alex. So let me just start by saying my observation after trying this stuff out is that it really feels like we're at an inflection point with self-driving. I was a tech reporter in San Francisco 2015, 2016, when everyone said this stuff is right around the corner, and

• 2:05Alex Kantrowitz?

  it's just taken a little bit longer than expected. But it does feel like this is a moment where this is starting to really take hold and go mainstream in a way that I think is really underappreciated. I think you had a stat on LinkedIn that you're increasing your ads like 49% every month. So just tell me a little bit about whether I'm right about that observation, and if so, why?

• 2:30Speaker 02

  You are. I mean, you see it in all the announcements we put out and in the growing size of the fleet and the number of people who have ridden in AVs. But taking a step back, the reason for that, and for context, I've been working on this at Cruise 10 years now, so a full decade. Why are we just now seeing this? The answer is, this isn't a product you can put out if it's halfway there or partially there. There's no launching early kind of thing. We set the bar, the safety bar, really high inside of Cruise. And we wanted to be convinced that by deploying this service, we're going to have a positive impact on day one in terms of road safety and benefits to society. And so it took, the very first prototype self-driving cars, they maybe go around a couple of blocks.

• 3:14Speaker 02

  If you've tried driver assistance systems, they feel like they work. But that's the difference between working 99% of the time, or 99.999, however many nines you think is appropriate. And that, you know, those extra nines of reliability are what take the majority of the work. That's polishing the technology, making sure the safety performance is good, making sure the rides are comfortable. And then also making sure we have systems in place to handle with the reality of operating vehicles on public roads. So that's interacting with first responders, detecting and pulling over for emergency vehicles, handling pop-up construction zones. There's a really long list of stuff you have to do to even reach the baseline performance of a human driver. But, once you do, the floodgates are open.

• 3:57Speaker 02

  Once you've reached that point at which you outperform humans in aggregate on a safety basis, at least with regards to collisions as we've measured, and you feel like you're able to provide a service, then the constraints become very different. It's no longer this science and technology problem. It's how do we scale? How do we build more infrastructure? How do we manufacture more cars? And we finally, after 10 years, reached that point.

• 4:20Alex Kantrowitz?

  So would you say the floodgates are open now?

• 4:23Speaker 02

  They are. At this point, well, I shouldn't say completely open. They're open in ways where we can launch in some cities of the US in some areas. So we put limits on our technology today, things like top speed, the weather that it will operate in, and those are tightly validated and controlled, the ability to manage our fleet within those constraints. But that actually opens up a lot of cities in the US where we can operate a reasonably sized fleet. And as new technologies and improvements come along, like the ability to operate at higher speeds or in tougher weather, that will just further open up the areas in which you'll see these vehicles operate.

• 4:59Alex Kantrowitz?

  So can you describe a little bit like the magnitude of what we're seeing? I mean, I quoted one of the stats that you had shared, 49% increase in rides month over month. But like, can you give our listeners just a sense as to like, because like, it's one thing to say like, the magnitude is increasing, but like, I'd love to hear like, any context you can share around that. So, you know, we have number of rides, but like, number of cars, whatever stats or or number of cities, like, talk a little bit about like, what this inflection point looks like on your end?

• 5:29Speaker 02

  Well, it is growing exponentially. Like, you know, from an engineering standpoint, I like to think in terms of orders of magnitude. So each time you 10x the scale, you know, you've got some new technologies you need to build or new systems to handle that increase in load and volume. So for context, last year, we were operating tens of AVs. We're currently operating hundreds, you know, almost 400 concurrently at peak. Next year, it'll be thousands, and then it'll kind of continue at least 10x growth every year for the foreseeable future. So that's a big, that's a big increase, you know, if you're just to plot that curve, but it's still relatively modest compared to the number of, you know, total vehicles in rideshare or the total vehicles, you know, operated on the road in the US today. And our

• 6:13Speaker 02

  goal, look, if you can put a self-driving mile out there that's safer, it's cleaner, because it's, you know, powered by, you know, electricity instead of combustion engine, and probably more fun and more convenient for people, we should be doing that for as many miles as we can. So it'll start with, you know, kind of this robotaxi market, and then expand eventually into personal vehicle ownership.

• 6:34Alex Kantrowitz?

  Okay, I definitely want to get into that. And also, I see 10,000 driverless rides per week. So, talk a little bit about the scale. Like, what was that at the beginning of the year?

• 6:44Speaker 02

  I don't know off the top of my head, like on a per weekly basis, maybe, maybe hundreds or maybe a thousand or 2,000.

• 6:51Alex Kantrowitz?

  Wow. So it's already 10x just from the beginning of this year?

• 6:55Speaker 02

  Yeah, it has. And that's driven by a number of factors. Obviously, we started by operating our AVs, you know, late at night and overnight and early in the morning. And there just aren't that many people that want to take rides at that time. But that is the least risky environment to start in. And so we wanted to gain confidence and make sure everything operated as we expected it to before expanding into the daytime hours. But you take the same set of AVs, if they're only available in the middle of the night, and then you make them available during the daytime, just that same number of AVs is going to see 10 times as many rides.

• 7:26Alex Kantrowitz?

  Right. And I think we should talk a little bit about like what the experience is like, because there's going to be some listeners who've actually been in these self-driving cars, but it's actually very tough to grasp unless you've actually ridden it before. And I think it's worth like reflecting a little bit about what this is actually like. One of my first observations here is just the progression is so interesting, where you first get in, you're a little bit nervous, you're a little bit shocked that this thing has happened. Then the second ride that you take, it feels a little bit routine. Then the third ride you take, it's almost as if you're not paying attention to the fact like it becomes normal so fast by the third ride. And I think by the fourth ride, for me, it's just like, I don't ever want to drive in any other way. The ride feels safe, it's

• 8:11Alex Kantrowitz?

  private, you know, you know exactly where the car is, you know, you can't get into a fight with the robot. Not like I often fight with the drivers, but like, it's just, there's something about it that's just, it really catches on and seems like it makes sense so quickly. So am I, do you think I'm capturing it right? I mean, I think I'm saying a lot of nice things about like what this experience is like, but it's for a reason. Like it's, it feels safe and smooth and easy. And I don't know, it's like, and like the future.

• 8:42Speaker 02

  Yeah, well, look, I'll start by being humble and saying, you know, we still have some potential of rides where the AV will do something awkward, like pause a little longer than it should in front of a construction zone or whatever it may be. But, you know, in addition to each individual's personal journey, where you're going from skeptic to, you know, okay, this is interesting to how could I ever live without this? That is a very common journey that that all our users go on. But the other thing to keep in mind is that the rate at which these systems are improving is extraordinary. You know, we put it push out software updates to the fleet every two to four weeks, and each one of those has substantial improvements across, you know, various areas of the product, whether it's the pickup and drop offs or the routing, or the smoothness of the driving. Those are getting continuously better. And

• 9:27Speaker 02

  so your experience now versus six months ago would have been very different. And like now, you know, several months in the future, it's going to feel like a, you know, a much more confident experienced driver even than than what you've seen today. So, you know, we're excited about that. I think it's, you know, that there will be, public perception will always lag the true state of this technology because it's moving so fast. By the time, you know, people develop a consensus opinion, it's already out of date. And I think that's, I think that's kind of fun, because people will constantly be surprised by the difference in the actual rides versus, you know, their perception based on on what they see or hear from others.

• 10:03Alex Kantrowitz?

  Yeah, and I mean, I do, I use ride share and also drive myself. And I think it's interesting because on the ride share front, like, if you drive, I've been using these cars in San Francisco. And if you drive in an Uber or Lyft in San Francisco, the, these are tough roads. You go up and down and, you know, there's curves, you tend to get nauseous, I think, by, by the time you finish your ride, there's a lot of stop signs. It's just tough roads to drive on, but the roads, the, the roads with an autonomous vehicle feel much smoother. So you talk about like, these cars understand how to drive more smoothly. Then there's like, when you drive on your own, you know, there's this constant, and no, anyone who tells you they're not distracted while driving right now is, is, you know, either

• 10:48Alex Kantrowitz?

  some sort of saint or lying, because there's always this stuff pinging at you. And to be able to drive without, you know, without any of those forces impeding on you is pretty wild.

• 11:00Speaker 02

  I think it makes, I mean, it's common sense that, you know, a machine is going to do a better job driving than a human when you eliminate all the distraction, you know, assuming it's a decent driver otherwise. But let's talk about, you know, rideshare. You mentioned that. I think we will look back at, you know, right now is kind of like a flawed social experiment, you know, gone wrong with, with human-driven rideshare. You know, and there's so many reasons for that. One is, you know, we, we hear from women who ride in crews all the time, especially at night, that it is so refreshing to get into a car and not have to worry about getting into the car with, with a complete stranger late at night, you know, and be worried about what their intentions are. And that's not all rideshare drivers, but it's certainly some.

• 11:41Speaker 02

  And that peace of mind, that's something that we should have never introduced in the first place, this horrible anxiety of, of stepping, you know, into a car. And you mentioned that the smoothness of the ride. So we did some research on this and

• 11:55Speaker 02

  the, the cruise AVs are tuned very carefully to minimize motion sickness. And how you do that is, you know, there's, there's acceleration of the vehicle. The derivative of acceleration is called jerk. And like, there is a very narrow window of jerk, I guess, settings that you could think of where you minimize the forward and backward motion of the human body sitting in a vehicle. And we, we tune for that. And so you can, like, if you're in a rideshare driver, or even driving your own car, a passenger in a human-driven car, and you're staring at your phone or on your laptop in that car, you're almost certainly going to get motion sickness. But I found, you know, I ride in cruise cars all the time. I can stare at my phone and do work emails and actually be productive in a car without having to worry about getting sick. And that's not an accident. That is by design.

• 12:39Alex Kantrowitz?

  Yeah. And the cruise makes you, I mean, it's so smooth, you don't even feel like buckling your seatbelt and cruise won't start until you buckle. But it is, that's just for people listening in. That's sort of how, how these rides operate. And, you know, I know I sound like I'm gushing here, but really that it's, it's just like how the technology operates. So I feel like, you know, this show, we'll, we'll talk about things when they're bad and we'll talk about things when they're good. And we're not like bound to like the skeptical or the, or the booster angle. And, and this is certainly like the truth of the matter. You mentioned, so we're talking about ride sharing. First of all, these, you know, I've used the cruise app, I've used Waymo app, you call the car, it comes to you, drops you off. Where it doesn't seem like Uber or Lyft really have a future at all.

• 13:24Alex Kantrowitz?

  If we move to this future, like, you know, initially, the way that Lyft talked to me about this a few years ago, and we just had David Risher on the show, the CEO of Lyft. So, you know, folks can, I guess this is like ride hail and self self-driving car month on the on the show. But, you know, the way that they used to say it, they would be the networks on top of the technology, and you would effectively use those ride hailing apps, which have mapped out the cities and routes so well to be able to get your cars and but and and get to where you need to go. But right now, with the Cruise app or the Waymo app, it's becoming very clear very quickly that that stuff is unnecessary. So what's your reaction to that? Is this something that replaces those apps?

• 14:05Speaker 02

  I mean, at this point, it's hard to say. There's a lot of nuance and complexity in, you know, existing ride hailing apps and services. I think the consensus view on how the industry would evolve over the last few years has evolved. Like, originally, there, you know, at one point, there were like 60 companies in the state of California testing AVs. And so the view was that, you know, maybe half of those or a third of those will start shipping robotaxis. And you'll have 30 different robotaxis, just like there's 30 different, you know, brands of cars, you know, often sold in the US. And then something like, you know, a rideshare app would be this nice way to have one interface to all of those. What has actually

• 14:46Speaker 02

  happened is this problem has turned out to be way more complicated to get to do right, way more expensive, way more time consuming, and the the field has thinned down to, you know, one or two or maybe three players. And at this point, I think, you know, that that assumption that you need an app to sort of like fan out all the different types of robotaxis is is less of a less of a guarantee. And so I think it it remains to be seen, you know, whether AV companies and rideshare companies end up partnering or mixing and matching together to form alliances and whatnot. But I certainly think it's there are more options now. And, you know, Cruise obviously has a standalone app today, because we think there are benefits to iterating really quickly on that app experience simultaneously within car experience. So we

• 15:28Speaker 02

  can give the customer the best ride possible and not have to sort of translate that experience through a third-party rideshare app. But we'll see, we'll see how that evolves in the future.

• 15:38Alex Kantrowitz?

  So could you envision a future where you would partner with Lyft or an Uber and just make these cars available through those apps?

• 15:43Speaker 02

  Well, I would say nothing is off the table, but it would have to make sense for both parties and ultimately for customers.

• 15:49Alex Kantrowitz?

  Speaking of Lyft and Uber, so I guess this is going to be the last of the ride sharing questions for you, but I've been emailing with the rideshare guy, Harry Campbell, and he had a question that he wanted to ask about this. He says, "Explain the economics of how a cruise vehicle with technology, R and D, etc. will ever be cheaper than a human driver who gets paid $20 an hour to use their own car." Like, what is the break even point? Because I'm not seeing it. I mean, I think that's a good question. What's your perspective?

• 16:20Speaker 02

  Well, I mean, I would flip it around. I would say, why wouldn't a vehicle where basically the dominant cost is just the fuel or electricity, you know, once you amortize the technical costs, like, you know, versus paying an entire human livable wage, which is going to go up over time, I think, as society demands, you know, you know, higher minimum wage and other things. And so that's going in the wrong direction. Like, it's going to increase over time, I think, the the human wage, whereas the cost of the technology is dropping dramatically, both on a upfront cost, as in the cost to manufacture the vehicle with all the technology, but also on the operating cost per mile. So the overhead

• 17:00Speaker 02

  we pay to monitor these vehicles, to develop software for them, all of that basically gets way cheaper on a per-vehicle basis as you add more vehicles.

• 17:11Alex Kantrowitz?

  Right.

• 17:11Speaker 02

  So the unit economics aren't great at hundreds of vehicles. They start to get pretty interesting at thousands. And then, you know, above that, the advantage versus a human rideshare driver is pretty dramatic, actually. And that's, that's both, again, due to decrease in operating costs, but also, we have two generations of newer AV sensors and compute technology in develop, in development, that each one of those has a huge drop in the cost of, you know, the sensors and compute, to the point where it doesn't really add that much to the cost of the vehicle, you know, a few years out.

• 17:42Alex Kantrowitz?

  Right now, your, your cars are full self-driving. There's another company that talks about full self-driving, and that's Tesla. You've mentioned there's one, two, three companies. I mean, two I can think of right off the bat is you and Google with Waymo. But Tesla is an interesting case, because, okay, their full self-driving isn't exactly full self-driving, but they have more cars driving more miles autonomously than, I think, anybody. So how do you view their effort?

• 18:11Speaker 02

  Well, I think that's a that's a common misconception, and I think one that has been played up quite a bit to sell more cars, frankly, and that, you know, I understand why that is. But there's a huge distinction between a driverless car, as in you can sit in the backseat, or it can go pick you up without anyone inside, or pick up your kids from school, or whatever it is, and one where you have to sit behind the wheel and you're constantly monitoring and ready to take over at a moment's notice in this like high alert mode.

• 18:37Alex Kantrowitz?

  Yeah.

• 18:38Speaker 02

  And so I describe it as, look, either the car works for you, that's a robot taxi, that's driverless car, or you work for the car. That's what you're doing when you're sitting behind the wheel of.

• 18:47Alex Kantrowitz?

  Yeah, but you don't think that training, that that's helping to train the Teslas to the point where they could actually be fully autonomous?

• 18:53Speaker 02

  Well, look, if if data was the only constraint to making a driverless car, I think there would be a lot more driverless cars out there than there are. It's a lot more than data. Like, Cruise is not data-starved, even with, you know, hundreds of vehicles on the road. We've got, we're drowning in data. It's really the ability to turn those, that that data in insights and drive improvements to the product. And, you know, a strategy we took early on is we start with well-equipped vehicles. They actually have all the redundancy and telecommunications, the three different modalities of sensors, all those things, so that we could solve the technical problems first, which is the hardest thing to do. And we've done that, at least in, you know, in our early days. And then the easier part is in driving down the cost, once you have a working functioning system, because you

• 19:37Speaker 02

  can go in and optimize all the pieces that turned out to be overbuilt versus what you know you now need. But again, like, there's no, there's no parallel. They're not the same thing. Like, a system that's driver assistance, where you have to take control, versus one where you have cars driving around without a driver. And that really doesn't come to light until you actually try to do it, and realize you need all these degraded states. Like, if you have a malfunction, right now, if you, if a camera gets covered up on a, a car with driver assistance systems, it just turns off. If you have a robot taxi driving down the street and a sensor gets blocked, it has to detect that, use its other sensors, pull over to the side of the road safely. And then you may have situations where there's, you know, remote assistance needed to figure

• 20:20Speaker 02

  out what to do with that car. You don't just want to leave it blocking the street. There's so many nuances to going from driver assist to driverless that it's, it's, uh, it's quite silly to me to even put those in the same sentence.

• 20:33Alex Kantrowitz?

  Okay. Well, glad that we could hear that up. Speaking of companies, I mean, look, we got to talk about it, right? So there's one more company that we have to talk about in terms of ones that could end up in that hierarchy, which is Apple. No one seems to talk about their self-driving efforts. I'm sure you're more cued into what they're doing than the most. Do you view them as legitimate competitor in this space?

• 20:53Speaker 02

  Well, they're pretty secretive. I actually don't have any, you know, inside intel on that. But what I would say is that, you know, Apple has a history of entering industries late, but with a really compelling and oftentimes better product. And so I wouldn't put it that past them. But I will say that unlike a consumer device, which you can test really well behind closed doors, you know, building driverless AVs is very interactive. You have all these feedback mechanisms between, you know, how AVs react with other users on the road, training first responders to interact with vehicles, working with local governments. It's very hard to just show up on day one and drop driverless AVs everywhere. I think it does take a measured and deliberate approach to scaling. That's very collaborative, working

• 21:35Speaker 02

  with regulators and local, state and federal government. And so I think there's a long path ahead for anyone else wanting to enter the market, you know, beyond Cruise and maybe a couple others that are already doing that.

• 21:46Alex Kantrowitz?

  And my understanding is that they've, I mean, they've been working on this project for a long time. It has been, had a lot of fun names like Project Titan, but inside the company, they've, they've culturally struggled to build it. Their iPhone strategy of, you know, figure out what the hardware looks like and then build the software inside doesn't really work for self-driving cars. Like you can't bury the sensor, like, you know, the cruise, the cruise vehicles, they've got the sensors and the cameras on top. And if Apple wants to make it look sleek and, uh, you know, potentially risk some of the data collection because of the look, then that's what's, that's what's held them back in the past from the reporting that I've done.

• 22:22Speaker 02

  Well, you know, it takes about four years to go through the automotive development cycle. And so what you see on the road with Cruise or robotaxis was four years ago technology. The stuff we're developing now is a lot more sleek and integrated for future vehicles. But I guess with a company like Apple, the fear is that Cruise gets disrupted. Like, there's an iPhone moment when they drop something new. So what we tried to do is disrupt ourselves. And we have our own iPhone moment coming with the Cruise Origin, which is our six-seater vehicle with seats that face each other. There's no driver seat, there's no steering wheel. It feels like your own little, like, party box on wheels. You've got lighting and screens and sound systems and all that. It's pretty cool. And I think that will be the moment that people realize that a driverless car is not just

• 23:07Speaker 02

  a car without the driver. It's actually a totally new mode of transportation.

• 23:10Alex Kantrowitz?

  And the Origin is out in Austin at this point. Like, what's the expansion?

• 23:14Speaker 02

  On public roads currently in Austin, and actually also in San Francisco.

• 23:19Alex Kantrowitz?

  It's in San Francisco now?

• 23:22Speaker 02

  Not every day, but we are doing testing on public roads in San Francisco, yes. And you'll see that ramp up quite a bit later this year. Can't announce too much right now, but we're putting, I would, I think it's fair to say we're putting the finishing touches on that vehicle. And it's gonna be pretty awesome.

• 23:38Alex Kantrowitz?

  Now, the Origin, so the Origin basically looks like this pod, really right out of science fiction movies, two benches facing each other. Is that something that you're gonna have one person ride in, or is your vision for it to be rideshare?

• 23:52Speaker 02

  Well, so talk about another social experiment going wrong. Pooled rides for human-driven rideshare is totally awkward. You sit in the backseat of, like, you know, a Toyota Camry, shoulder to shoulder with someone you've never met. And it can be pretty jarring, pretty uncomfortable. And you do that to save a couple bucks, you know, on your fare. With the Origin, the seats that face, first of all, they're facing each other, so there's no worry about, like, someone sitting behind you and you can't see what they're doing. That was something we heard loud and clear from customers when we say this. And then if you're sitting opposite each other, there's more like legroom than a like a first class airline seat. So you can, you have plenty of space to be physically distant from someone else, even though you're sharing the same vehicle, which I think will

• 24:36Speaker 02

  make, uh, will fix a lot of the flaws that were in pooled rides or shared rides.

• 24:41Alex Kantrowitz?

  Yeah.

• 24:41Speaker 02

  You know, in the first generation of that. And so as a result, I think you'll see, um, increased engagement of that, which helps with throughput, lowers congestion, all these good secondary benefits, not to mention lower cost rides to consumers, um, you know, for this vehicle. So it's designed with that in mind.

• 24:57Alex Kantrowitz?

  Cal Vo is with us. He's the CEO of Cruise. We're going to talk a little bit more about how Cruise expands into a specific city, looking specifically at the example of Los Angeles when we come back right after this. This episode is brought to you by App Point. Everyone's racing to roll out AI right now. Co-pilots, chatbots, agents doing real work. But here's the part nobody loves talking about. All that AI runs on your data and most teams have no single way to see it, secure it, and prove it's under control. That's exactly what App Point does. For 25 years, they've been the trusted layer beneath the world's most demanding data, now extended across your entire AI estate. Your data, your cloud, and the agents acting on your behalf. It's

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• 27:14Alex Kantrowitz?

  And we're back here on Big Technology Podcast with Kyle Vogt. He's the CEO of Cruise. As we record this, Cruise is about to expand into Los Angeles. Kyle, can you talk a little bit about like the thought process that because LA is obviously very much, and by the way, listeners, when you listen to this, the expansion's already going to be underway. We were just recording a couple of days before, but when you expand to a city like LA, driver-heavy, massive, what are some of the considerations that go into that?

• 27:44Speaker 02

  Yeah, I mean, we're super excited. Los Angeles is a huge market, a place where I think a lot of people drive their own cars everywhere. And so the idea that you'll have another mode of transportation that's convenient and safe and just gets you there every time, I think is going to be amazing. And so it has, all of the company's energy a couple of years ago was just on improving the performance, basically have a single type of vehicle, running a small number of them in a single city. And once we felt like we had line of sight to large-scale operations in San Francisco, we had to totally reorient how the company worked to set it up to scale to multiple cities. And so that was setting up teams that can go out and scout on the ground and basically identify any differences about Los Angeles

• 28:29Speaker 02

  that are unique compared to San Francisco, Dallas, Houston, Austin, all the other places we're in. And then we send out testing vehicles and we have a whole playbook now for basically safely validating that the AVs are ready for a city and then slowly ramping up operations and sort of matching riders to the supply of vehicles as we increase it. And so you're going to see that same playbook which we've now done in Phoenix and Austin and many other cities on the way now happen in Los Angeles. So at this point, you know, there are fewer surprises when we move to new cities. And I feel like a city like Los Angeles, you know, the stakes are high. It's a tough environment as well for traffic and other reasons. And so, you know, at this point, we'll have done this process, you know, five

• 29:12Speaker 02

  or six times and really had a chance to do it really well before we roll into Los Angeles.

• 29:18Alex Kantrowitz?

  Are you going to be in all neighborhoods in LA?

• 29:20Speaker 02

  No, we'll probably start off in, you know, a few neighborhoods and then ramp up over time. Our vehicles won't be on the highway right now, which I think is good. We don't, you know, contribute to highway traffic, but for people moving around, you know, within a city, you know, or going from one city to the other and don't need to take the freeway, it'll be a really great option.

• 29:38Alex Kantrowitz?

  Can you name a few of the neighborhoods that you're anticipating you're going to start with?

• 29:42Speaker 02

  Not yet. We'll see. That might be in the announcement as we put it out. But, you know, it'll be, I guess, the places you would expect. I'll leave it at that.

• 29:49Alex Kantrowitz?

  Okay. I'm going to just guess Venice, Santa Monica, those type of areas.

• 29:55Speaker 02

  I'm trying to put my face on and not give anything away. Yeah.

• 29:58Alex Kantrowitz?

  Okay, let's see. So this is kind of one of the things that I thought about when I started getting in these cars for the first time in SF was like, wow, they can handle the San Francisco road. If they can do this, they can do anything. And I'd love to hear from your perspective, like, you know, how much is it that they've just learned San Francisco in particular? I think you got to this. Or that they've learned like how to drive and can, and those skills are applicable elsewhere?

• 30:28Speaker 02

  Yeah, so we'll break it down into two things, like sort of the, I guess, road layout and traffic infrastructure, like traffic lights and other things. Those vary slightly from city to city. Like in Austin, there's horizontal traffic lights, which we don't see in San Francisco. And some local differences like that, that take a little bit of work to adapt to. But I think the part that we were more concerned about initially, or at least just wanted to validate, was that the driving behavior we had seen in San Francisco and the pedestrian behavior and the cyclist behavior, does that translate well to other cities? And the answer is, it mostly does. Out of the gate, you take a system that's designed to operate safely in San Francisco and put it in Austin or Phoenix, and it performs extremely well.

• 31:12Speaker 02

  Now, there's some local differences that are related to, you know, the width of the roads, or how people, you know, some of these more unique per-city situations. And so we have a process by which we very quickly, when we have basically ways, when the AVs drive around, if they see something unusual or something that doesn't match what they expect, they can log it, transmit it back to our, you know, data centers.

• 31:34Alex Kantrowitz?

  They do that autonomously?

• 31:36Speaker 02

  Yeah, we retrain on their own X to adapt to the new things there. But it's aggregate. So what we see in Austin and Phoenix gets added to what we see in San Francisco. And so by the time we go to a city after that, the chances that there's something truly unique are much, much smaller. And at that point, the AV has a pretty good ability to adapt to things that, you know, it hasn't seen exactly before. It may not perform exactly like a human would, but it's still going to be safe and pretty comfortable, and we continue to fine tune that. But in the explanation for this, is that even though, you know, there's a, maybe the distribution of driving behavior in one city is different, maybe San Francisco has a driving personality that's different than Boston, or New York, or Portland. Within that distribution, you still see examples of Boston drivers, Portland drivers,

• 32:21Speaker 02

  New York drivers in San Francisco. And so it's not like the AV has never seen that. It just sees a different, you know, distribution of drivers. And so that means that, you know, if you train in one city, it actually does port to other cities, you know, more than you would think.

• 32:38Alex Kantrowitz?

  You said, uh, let's see, you said it took some, some work to adapt to these new cities, but most of the systems worked well as is. Can you basically drop a fleet of cars in a new city, knowing like 85, 90% of what you need to know and just like have it work and retrain? Or is, is like, what is the ramp up process there?

• 32:58Speaker 02

  Well, you know, we've done this a few times though. And so we're still very measured and cautious in how we do it. So we start by putting a fleet of vehicles that have humans behind the wheel and ready to take over. And that is kind of our, our, um, you know, last check that we do, uh, well, as part of our many validation efforts to ensure that, you know, even though we've done simulation, even though we've, um, you know, validated the system in one city and collected data in another city, we want to make sure when we put it all together, it performs as expected. And so that is, you know, a last sort of safety net to catch any surprising differences before we actually take the drivers out of the car. Um, but even when we, when we get to that point, uh, the probability of, of seeing something new, uh, we're having, you know, we call it like a test escape, like

• 33:42Speaker 02

  something, something where the AV doesn't perform as intended, um, is extremely small. And we, we basically don't see many of those anymore. So in other words, yes, you know, we could take the system and drop it into a new city blind, but we don't do that because we're very cautious and measured in how we deploy.

• 33:56Alex Kantrowitz?

  But it seems like you're taking less and less, it, it takes less of a lift to deploy in a new city for each, each time you do it. I mean, you've gone from what one to seven cities this year and, and what, what do we, what can we expect by the end of the year? We're about to, you're about to go into, I think, an eighth, but correct me on the numbers if I'm wrong.

• 34:12Speaker 02

  Yeah, we're not done. Uh, there'll be more this year. And, uh, you know, that, that's because next year, we're going to be manufacturing a lot of vehicles. And, you know, that's, that's our biggest limitation to scale right now. We just don't have the vehicles, but we're going to be building more. And, um, we, we've learned from San Francisco and other cities that, um, it takes time for communities to acclimate to this new mode of transportation. You know, the first time that people see a driverless car in their neighborhood, there's a lot of double takes and surprise and, you know, a lot of thumbs up.

• 34:39Alex Kantrowitz?

  People still film, they're filming as you go by.

• 34:41Speaker 02

  Yeah, a range of reactions. And so what we don't want to do is drop like, you know, thousands of cars into a city over And catch people off guard. And so by having lots of cities, we can actually make a lot of vehicles and spread them out, deploy them across many places. So there's no abrupt change in any one city that would catch people off guard. We want to deploy with communities and not at them. And so part of that is making sure that you manage the rate of change and the expectations.

• 35:09Alex Kantrowitz?

  I mean, you're sort of winking at some of like the legal and regulatory challenges you might face as you you go about expanding. I mean, what is the state right now? And I mean, I think we can all, it's starting to become consensus that these vehicles are safer than human driven cars. So maybe you can share a little bit about about that in particular, about the safety aspect. And then talk a little bit about like, what are the regulatory hurdles that you face and how? And is that like the, I mean, outside of building cars, is that like the number two, for instance, barrier that you face in expansion?

• 35:45Speaker 02

  Yeah, well, I think first it goes without saying that, you know, regulators play a really important role. This is a technology that operates on public roads. You're carrying passengers, involves public safety. It deserves a certain level of scrutiny. And I think because the data, and I'll talk about exactly what data we have in a second, is relatively fresh and recent. You know, we've only driven over over three million miles now, almost four million. And so we have some safety performance data, but we've only published it in the last few months. And so I think regulators and, you know, communities, you know, local, state and federal government need some time to adjust to that before. I think they come to the conclusion they ultimately will, which is clearly beneficial to our communities.

• 36:28Speaker 02

  And we should encourage it and be pulling it into our communities versus slowing it down or potentially putting up roadblocks. So I haven't reached that point yet, and I think that's fine, given the recency of the data, but I expect that's where it will go. So in terms of the actual safety performance. You know, there's a lot of, you know, best practices you can follow or industry standards or other things, but that can get fairly academic and is not very convincing to many people, especially the average person. And so what we did in San Francisco is we collected data from human drivers to start with, so we could compare the AVs to human drivers. And we collected, you know, millions of miles across vehicles and did a study with Leading Transportation Research Institute. We actually instrumented rideshare vehicles.

• 37:12Speaker 02

  So these drivers had, you know, they're driving around vehicles covered in sensors, so we could detect any time they got into a collision, even if it wasn't reported by insurance or reported to the police, like even the most minor contact with objects or curbs or whatever it is. And so we have this data set now on how well humans drive. And it's probably not a shocker to anyone is that they don't drive nearly as well as, you know, the government thinks or insurance companies think. There's a lot more things that go unreported. But now that we have that data set, we were able to take AVs and drive them in the same area, a very comparable environment, and measure directly how often AVs were getting into crashes, especially the different levels of severity of crashes, and compare them to humans. And even, you know, from our first million miles, and remember this product is getting,

• 37:56Speaker 02

  continues to getting better, just from the first million, we saw a 50% reduction in any kind of crash. And over 70% reduction in the kinds of crashes that could lead to injury. So not only are the AVs getting in fewer crashes, but when they get into a crash, it's less likely to be one where there was an injury. So we have a lot of situations where an AV is sitting still at a red light and an distracted driver rear ends it. We count that as a crash. It is a crash, even though the AV, you know, did nothing to contribute to that.

• 38:25Alex Kantrowitz?

  Are you able to tune the model, like are the, the setting where like, do you like have like a hidden beast mode setting where these cars just like drive fast and accept like a greater percentage chance of collision?

• 38:37Speaker 02

  We don't have that. I'm not sure we'd build that. But we are, we are doing some interesting things like our focus, you know, earlier on was to get the AVs to be really good at not causing collisions. But what we found in the last couple of years, if that's not good enough, we actually be really good at avoiding bad driving by other humans. So we put up like, for example, now if a car is reversing and about to reverse into an AV and the driver's not paying attention, we actually honk the horn to try to get their attention. And I can't tell the number of times a driver has been like, thank you. I wasn't paying attention. Like they send us feedback and say, thank you for honking the horn. I otherwise would have smashed my bumper. You know, and that's one, one example of many of things we're doing to help humans make fewer mistakes.

• 39:18Alex Kantrowitz?

  Right. I'm curious about the way that consumers will pay for this. Are they going to pay like per ride or is, are you going to get like a subscription to Cruise and just like, you know, hit a button and it shows up whenever?

• 39:31Speaker 02

  I don't know yet. To be honest, we're going to experiment with some things, but you know, right now what we're seeing is that we're supply constrained. There's far more demand to ride in these vehicles than cars available. That's why we have a waitlist and other things in cities and it's, it's can be pretty long at times. And we're also seeing people report that they have a, a very significant preference for AVs over, you know, a human driven ride share vehicle, you know, as, as you experienced by your third or fourth ride, you're like, I want this all the time. And so that could lead to all sorts of different things on, on the, the pricing side. But what we do expect is that, you know, demand is going to exceed supply, unfortunately, for several years on this product, just because we won't be able to build enough cars to meet, you know, the nationwide ride share demand in the next couple of years.

• 40:17Alex Kantrowitz?

  Right. Okay. Do you have a sense as to like, when this is going to be? Yeah. I mean, do you have a target goal for like, when this might overtake human driving cars?

• 40:27Speaker 02

  Well, You know, there are like over 200 million cars on the road today in the US. And it would take us a long time to build that many cars. And so I think we're going to be in this world where human driven cars and robot taxis and also personally owned autonomous vehicles all coexist for quite some time. Just because it will take a long time to roll over the entire fleet. But what I do expect is, you know, within two or three years, most likely, I think the majority of new car sales will transition to vehicles where people don't have to drive because once you have that choice, I have a hard time believing that people are going to go to a dealership or go online or whatever and buy a car

• 41:13Speaker 02

  where they have to drive all the time versus one where they can choose. And I think that's gonna, I think that's gonna flip very quick.

• 41:19Alex Kantrowitz?

  Interesting. Okay, last question for you. I just want to hear a little bit more about like the corporate structure because you've raised something like $7 billion. You have ties to GM and Honda. So, you know, can you talk a little bit like is Cruise like a subsidiary of these automakers? Do they just have large chunks of ownership from you? Are you like planning to like do like the traditional IPO exit route? Like, talk a little bit about that.

• 41:45Speaker 02

  Well, we're over 80% owned by General Motors, but we do have outside institutional and strategic investors. We also have a separate board from General Motors. And so what we're trying to do there is create an alignment between General Motors and Cruise. They manufacture all our vehicles. They help like design and engineer most of the vehicles themselves. And we work more on the compute and sensing technology. And so, you know, at this point in time, we benefit greatly from this, you know, high overlap in ownership and easy ability to collaborate. But we have just enough independence that, you know, everyone at Cruise feels like they work for Cruise. You know, first and foremost, it feels like a separate company. We take a lot of steps to make it feel like a startup so that we can get that, that energy, that sense of urgency

• 42:31Speaker 02

  and that focus on delivering results that is you know, harder to do for innovative or unique products inside of a larger company. So as it stands today, I think we've got the best of both worlds and we're pretty happy with the structure.

• 42:45Alex Kantrowitz?

  Kyle Vogt, thanks so much for joining. Thank you. All right. Thanks, everybody, for listening. Thank you, Nate Watney, for handling the audio. LinkedIn for having me as part of your podcast network. And all you, the listeners, we'll see you next time on Big Technology Podcast.

• 43:05Speaker 03

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