Cruise, Crash, Crumble.

When I was growing up, our family had two dogs, and they could not have been more different.

One was friendly, skittish, and extremely well-trained. He never caused any trouble. The other dog was… nothing but trouble.

His name was “Tiger”, but it should have been “Tasmanian Devil”. One day, you’d find him scratching through the drywall to chew on some hidden wires. The next, you’d catch him happily eating a spare set of lightbulbs in the garage. It was completely ridiculous.

But Tiger was best known for his daily habit of running away to have an epic adventure.

Well… didn’t you have a fence?

Yes! At various points, we had a short wire fence, a tall wooden fence, an electric fence, or all three. But he was crafty. He would find a way through the wire or wood and run through the electric fence like it wasn’t even there. In fact, at one point I was sent outside to test that the shock collar was actually working… it was!

Ok, but why did he keep running away, braving the electric fence and a stern talking to when he finally came home? And why did the other dog stay back?

They had a different view of the risk-reward.

That same dynamic — a huge difference in the weighing of pros and cons — is playing out in autonomous vehicles right now. GM’s Cruise is acting skittish, while Waymo and Tesla press on. Let’s dive in to understand why.

Autonomous Vehicles (AV) are a huge reward

Let me shower you with some stats I found in my research this week. They will blow your mind:

1. Saving lives – McKinsey estimated that AVs could reduce traffic deaths by 90% (this would have been 40,000 lives saved in the US in 2023).

2. Creating new economic value – Global AV market is expected to reach $2.8 Trillion by 2032  

3. Gifting commuters time – 136M Americans commute an average of 27 minutes each way. In a 40-year career, that’s an entire year of your life you get back.

But, as with anything else, there’s no free lunch.

Getting to that reward comes with risks

Each of the major players has seen the negative consequences of pressing into uncharted territory.

Sadly, as reported by The Verge, Tesla drivers have had fatal accidents while using Autopilot, Tesla’s have been known to hit parked emergency vehicles, and the US DOJ even criminally investigated Tesla for its claim that the cars are “self-driving”.

Although they have a much cleaner record, Waymo hasn’t been immune from these risks. Twice in Arizona, and once in San Francisco – people got hurt.

Lastly, as you probably heard, in October 2023 a Cruise vehicle hit a pedestrian in San Francisco. According to TechCrunch, a normal car hit the pedestrian first and flipped them in front of the Cruise vehicle, which immediately stopped… on the pedestrian.

Is the reward worth those risks?

I know I’m biased here. I work in tech, I write about tech, and I honestly love to nerd out on self-driving… So I’ll try to clearly label fact vs. opinion.

Fact: In addition to those stats above, there was a study done by Waymo and reviewed by the Insurance Institute for Highway Safety and Arstechnica. They compared the accident rates of human drivers to those of Waymo’s AVs, which have by far the most autonomous miles driven. Here’s a blurb from the Arstechnica debrief article:

Opinion: I believe (like most people do) that I’m a fantastic driver. But if I’m honest with myself, I’m not always a fantastic driver. I get distracted. I miss turns. I drive too fast. And every day I see tons of people actively looking down at their phones while also actively driving forward into the unknown. Robots are safer, and we should cautiously – but firmly – press on.

Do Cruise and GM agree about pressing on?

No, it turns out…

Later in the month of the crash, they suspended self-driving operations everywhere. And on December 13, they fired 9 executives after an extensive safety probe. And a day later, they fired 900 employees (~24% of the company), keeping most of the engineers but shedding roles in other functions.

Now… I know that they technically still have the majority of the company in place, but in my mind, this is the exact opposite of pressing on. And it does nothing to address the core issues!

To navigate a crisis, you need strong leaders, who are knowledgeable about the business, who are able to rally the troops and double-down efforts to prevent the crisis from happening again. Instead, they are firing knowledgeable leaders alongside said troops. Not to mention that non-engineering functions (operations, safety, legal, PR, etc.) would all be quite helpful in a crisis like this… 

What are they seeing that we don’t?  

I’m going to break a rule that was deadly serious in consulting… and use a pie chart to make a point.

In short, GM is seeing this:

… And these are projections we’re talking about people!

For GM, the reputational risk of having their main (non-autonomous) business hurt by even 1% is not worth the reward of an optimistic 2025 revenue projection for their Cruise unit. The math just doesn’t work.

Wrapping Up

As I wrote about in Rivian and the 3-Stage EV Race, my opinion is that eventually most  manufacturers will be pushing towards 100% autonomous models (the same way many of them are pushing towards all-electric now).

Backing away from AVs puts GM closer to the rest of the traditional auto makers once again, leaving the tech startups on their own to charge ahead and (hopefully) crack the self-driving problem someday soon.

Until then, keep your eyes on the road – not everyone is as fantastic at driving as you and I are.

Bonus Bullets

Quote of the Week

— Scott Belsky, CPO at Adobe

Quick News Reactions

• “We’ll do it live!” – Netflix is finally doing it. They’re getting into live sports. Storytelling in a TV series can be expensive, but live sports are cheap (more on that here from my prior write-up). Now the unexpected part? The rights they bought are for the WWE. I guess it’s a sport…

• Heckling from the cheap expensive seats – Current and ex-employees are blasting Google for stifling internal attempts at innovation, and for laying off 1,000 people in Pixel, Fitbit, and Nest last week. Being risk averse because you already have a major cash cow… now where have I read about that recently?

• An undeniably good AI thing? – A startup called AiDash is using AI and satellites to try to find would-be wildfire sites before they happen. One of their biggest customers? National Grid. Apparently, all the power utility providers are under (justified) pressure to reduce wildfire risk, and this can help. Awesome.

Overall Economy

• This is the Weekly Economic Index published by the Dallas Fed. It’s made up of 10 different data sources from consumer to labor to production, and it’s designed to closely track US GDP. I’m going to keep an eye on it for at least a few months.

Tech Equities & Bitcoin

The Nasdaq (blue) closely tracks tech equities, and I added the S&P 500 (green) and Bitcoin (orange) for comparison.

Tech Jobs Update

Here are a few things I’m paying attention to this week:

• Big Tech Job Posts: LinkedIn has 6,805 (-7% WoW) US-based jobs for a group of 20 large firms (the ones I typically write about — Google, Apple, Netflix, etc.).

• Graph: Layoffs from 2022-2024 (Source: Layoffs.FYI). Note that this is showing in-progress numbers for the current month.