And Another One Down . . . Another One Bites The Dust

Well, the Tesla PR machine has got to be cranking up and working overtime these days.  Now another "Autopilot" accident in Texas is making headlines.

http://www.bloomberg.com/news/articles/2016-08-19/tesla-owner-in-autopilot-crash-won-t-sue-but-car-insurer-may

Here the driver was not paying attention as the car was on autopilot on a route where he had used it multiple times before.  Yet, for some reason (that I am sure Tesla will explain well) it failed this time.  The "driver's" injuries are minor and he apparently is not intending to sue, but his insurer who will have to pay for the damage to the car gets to subrogate to his rights and sue for him and it looks like they may do just that.  Should be interesting to watch though something tells me Tesla may just settle this one quietly (and confidentially).

Suit or not, this is three "Autopilot" accidents in just about as many months.  Fortunately for the "driver" and Tesla, no fatality here.  If there were, Tesla's claim in May on having a better fatality record than regular cars may have been at risk. 

So Tesla, we have to ask, how is this beta test of 70,000 "Autopilot" cars working out for ya?

Ubeonomous?

On a related note, Uber is going to conduct it's first real in the market test of driverless autonomous technology in Pittsburgh.  Well, not really ""driverless" as these "autonomous" vehicles will have "professionally trained engineers" in the driver's seat with their fingertips on the steering wheel just in case.  Indeed, the WSJ notes there will be two Uberites in the car making sure all goes well.  Obviously for such a beta test of truly autonomous vehicles this is wise - and apparently legally required.

http://www.bloomberg.com/news/features/2016-08-18/uber-s-first-self-driving-fleet-arrives-in-pittsburgh-this-month-is06r7on

Indeed, unlike Tesla's beta, I view the Uber test as likely a brilliant marketing ploy.  You have undoubtedly a host of Millennials and others just dying to be able to brag to friends that they have ridden in an autonomous car.  And getting to do so with a trained professional or two making sure you are safe is all that much the better.  From the linked Bloomberg article, it appears it will be random on whether someone getting an Uber car will get an autonomous vehicle, meaning those wanting the experience may need several rides before having the experience.  Those wanting the experience who have not downloaded the Uber app now have more incentive to do so, leading to more Uber customers.  Indeed, you may well have some folks traveling to Pittsburgh just to see if they can get a ride in one and they may have to do multiple Uber trips to get an autonomous car ride.  Caching!

Now this beta is likely to be quite limited in terms of time and rides, but hey, it is already getting headlines from Bloomberg and WSJ so Uber must be lovin' it.  If all goes well - which it should with two geeks at the ready - I suspect you will see these Ubeonomous cars in other cities in the near future for further testing and PR.  Building a base of people who have ridden in autonomous cars with no incident is a necessary step in getting consumer acceptance, and this is a wise way to do it.

Now if they can simply program the cars to automatically locate and go after Pokémon Go characters, they will really generate business.

Anyone Need a Driver?

It just so happens that the day this Bloomberg article came out announcing the Uber market test in Pittsburgh I was flying into Pittsburgh.  At the airport I simply took a cab into Pittsburgh and had a nice conversation with the driver about how Uber is driving him out of business.  He is only 35 but ready to hang it up.  His fares are higher and he cannot compete with the convenience of the Uber app, where customers can track their ride. 

On the way back out the next day I had seen the article so I used Uber to the airport, though did not luck out and get a new Ubeonomous treat.  I had to settle for a rather clunky old Buick.  The driver had seen a couple of the autonomous cars around but was not worried.  He could not conceive of how they would deal with traffic and finding the right drop-off location at the airport, which for Uber cars is a different location from other cars.  While both valid points, both will be overcome in time, if not already. 

Ford and GM have already noted these Uber/taxi type applications will be their initial focus for autonomous cars, so it is just a matter of time for both the taxi driver and the Uber driver to be looking for jobs, though the taxi driver probably much sooner.  Apparently many former taxi drivers are simply becoming Uber drivers, according to my driver, so they get to lose their job twice.  You have to ask, what are all these unemployed truck, taxi, Uber, bus and limo drivers going to do to the employment situation in the U.S. and around the world over the next 5-10 years?  Or maybe it will be 10-15 or 15-20 or more.  It may take a while but it is coming.  Then what?

So factory jobs have been in the process of automating for decades and that is continuing.  Now service jobs – be it check-in at the airport, ordering a meal at the fast food joint, the concierge at the hotel, basic lawyer and accounting functions or almost anything else – are being automated.  And service jobs are what a lot of the factory workers shifted to when the factories closed.  Look at the numbers since the last recession.  Employment in factories is actually lower today, so all the job growth Obamarama likes to boast has been in the service sector, a/k/a the lower paying service sector.  Don't believe me, look at the stats, which conveniently you can find nicely summarized right here:

http://www.firstrebuttal.com/challenge-for-the-market-pros-ceos-and-phds-read-and-answer-the-last-sentence/

If you do not have time to read it all, let me highlight the passage of importance to my point here.

What this means is that while part time and minimum wage jobs have kept up with working population growth there remains a 5% gap overall and that gap is directly within the breadwinner job sector.  Again this means there are proportionately 10M fewer breadwinner jobs for working age people in America today than in 1999.  This is an objective mathematical fact (we like these).  And so when people say “well the jobs market is just transitioning to different types of work” you can say yes, in part that’s correct, to part time and minimum wage work.

And by "breadwinner" jobs, he means those that pay the big money.  Of course we can fix those lower paying service sector jobs by boosting minimum wage a lot to give those employers even more incentive to automate faster. 

It’s good for Obama that he only gets two terms as those service sector employment numbers are going to be taking a turn for the worse before you know it, even without another recession.  If only we could automate Congress and the President; that’s one spike in the unemployment rate we would all like to see happen.

 

I'll Take The Over

In the linked article Mish Shedlock, a major proponent of automation, posits that millions of long haul trucking jobs will vanish due to automation by the 2022-2024 timeframe.  He queries readers whether they agree or thinks it will be sooner or later.  I am taking the over but let me qualify my vote.  Hey, I am an attorney and we caveat everything.

https://mishtalk.com/2016/08/16/ford-targets-2021-for-mass-market-self-driving-car-2021-a-near-certainty/

I do believe, as Mish suggests, that Interstate highways are a much easier obstacle for automation to overcome.  For certain areas of the country where foul weather is not common, highways are well marked and long stretches exist without urban areas and congestion, automated trucking is much more likely to occur earlier in time.  Still, I think it will be quite limited at first and will not lead to millions of jobs lost.  Most trucking, I assume, is in more congested areas of the country as that is where the goods ultimately need to go.

You also have the need to get regulations in place.  As I noted in my recent post on automation, product liability claims can quickly cripple manufacturers if they deploy a host of vehicles before they muster regulatory protections and caps, which could easily take to 2022 or longer to get into place.  A semi tractor and trailer loaded with goods is a massive vehicle and a single multi-vehicle accident caused in part by such a vehicle can easily lead to tens of millions in liability - and in the right (or wrong) state, perhaps even hundreds of millions.  I have been involved in such litigation and it is not pleasant.  It will only take a few such accidents to set the industry back for years.

Ford, GM and others seem to be shooting for 2021 or so for fully automated cars.  Ford, I think wisely, is shooting for the ride-share or taxi market first, where individuals will not own the vehicle or need any training.  The vehicles will have no human involvement in the operation.  In a true Level 4 car, attempted human involvement increases the odds of an accident, so keeping humans in the back seat removed from any meddling is logical.  Letting riders experience the new technology one ride at a time in a taxi might ease them into acceptance.  And the manufacturer or operator of a fleet is better able to properly maintain the autonomous vehicles in operating condition and insure they get appropriate upgrades. Still, I am sticking to my guns on this one and not expecting fully autonomous cars beyond small scale beta testing any time before say 2030.  The technology will be there sooner but the other obstacles will take longer.  For more details, please visit my earlier post "Driving Me Crazy."

http://financialspiltmilk.blogspot.com/2016/07/driving-me-crazy_97.html

Perhaps Mexico Wants the Wall

Mr. Trump has made some great fanfare over his claims that he will make the President of Mexico, Enrique Peña Nieto, who I might add is quite the dapper don, build a wall and pay for it to keep illegal Mexican immigrants from crossing the border into the U.S.  Well, Enrique may have good reason to build the wall, but it is not to keep Mexicans in Mexico but rather to keep those greengos from Estados Unidos (U.S.) from illegally coming into Mexico.  You see, despite the booming U.S. economy President Obama touts constantly, the reality is that for higher paying manufacturing jobs, the U.S. ain't the place to be.  Mexico, my friends, is where the jobs are! 

According to the linked article, Mexico cannot hire enough workers to fill the new factories being built there and billions are being spent to build even more.  Indeed, they are even offering workers new cowboy boots as an incentive to join the workforce.  And nothing spells desperation like free cowboy boots.

http://www.zerohedge.com/news/2016-08-15/mexico-labor-shortage

So the kinfolk said "Jeb move away from there." Said "Mexico is the place you ought to be." So they loaded up the F150 diesel and they moved to San Luis.  Pitosi that is.  Swimming holes, cowboy boots!

Okay, I may be exaggerating a tad to suggest U.S. workers will sneak into Mexico to take their jobs.  That is actually not likely because the jobs there are only paying a measly $3.29 an hour, which is why they are moving the jobs there.  I mean why would a U.S. laborer work for only $3.29 an hour there when you can collect government benefits here and sit around talking about how you used to make $24 an hour before Ford or GM closed your local plant.  Heck, that bartending job serving your former co-workers pays more than that.

Point being, however, that Mexico has a labor shortage so the incentive for Mexicans to illegally cross the border is somewhat lessened.   Seems Trump will have to hire his golf course workers elsewhere, assuming others can pass the ideological exam for mowing his greens.