The Fuse

This Week In AVs: The Rise Of Middle Mile Autonomy; AVs And Local Budgets; And More

by Alex Adams | @alexjhadams | June 25, 2020

AVs’ Impact On City Revenues
An in-depth column in Forbes examines the potential impacts widespread deployment of self-driving cars could have on state and local budgets. Describing this effect as the political economy of AVs, the column notes that a falling number of driver’s license applications, vehicle registrations and other fees and sales would have a draining effect on revenues at the state level. In turn, this results in fewer dollars for general funds which help cover costs for transportation infrastructure upgrades. Moreover, it adds that there would be a loss of revenue from parking meters and garages, as well as a shortfall in funds from vehicle parking infractions, red light violations and other traffic infringements.

Despite these potential issues, the impact on budgets depends on how swiftly and widespread AVs are adopted, and shortfalls in some areas will be recouped elsewhere in efficiencies and benefits, such as fewer traffic accidents. Given the more than 36,000 road deaths on U.S. roads every year and a looming shortage of truck drivers, AVs hold tremendous promise for both economic and societal improvement. However, it would be prudent for authorities to start planning for a future in which less of their revenue is derived from conventional transport and travel.

Mercedes Partners With NVIDIA On Autonomy
In anticipation of a wider future deployment of AV technology, NVIDIA and Mercedes-Benz announced this week that they are partnering to provide the German automaker with NVIDIA’s DRIVE platform as standard in all vehicles, starting in 2024. The new software will support over-the-air updates, which means drivers who buy a 2024 model may see upgrades to their driver-assist systems for months or years after their purchase. The deal represents what Ola Källenius, chairman of the board of management of Daimler and head of Mercedes-Benz, is calling a “software-driven” approach, in which the modern car is more of a “smartphone on wheels.” The two companies will be working together on AI and automated vehicle applications that include Level 2 and 3 driver-assist functions, and Level 4 automated parking functions.

Gatik And “Middle Mile” Autonomy
The pandemic has heightened public interest in automated deliveries, as consumers increasingly demand greater contactless options. As a result, the demand for autonomy has increased interest in companies focusing on “middle mile” delivery—the transportation of goods from a distribution hub to a smaller warehouse. One such company that has seen a rise in interest is Gatik, a small start-up with just $4.5 million in funding that counts Wal-Mart as a customer. In an interview with Bloomberg, Gatik CEO Gautam Narang detailed the advantages to middle mile automation, noting that concentrating on the same fixed routes allows them to “over-optimize the technology to focus on these routes” and reduce the edge cases “because we know the routes so intimately; we know the drive patterns.” As a result, he concludes, “the go-to-market time is faster.”

Companies like Gatik fill the “huge gap” between heavy-duty autonomous long-haul trucking and last-mile, automated delivery by companies like Nuro, notes Reilly Brennan, founding general partner at Trucks Venture Capital. Brennan added that the middle mile portion of logistics, particularly in the rise of e-commerce, “is only becoming more valuable as a layer in the $800 billion logistics ecosystem.”