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<p><div class="KonaFilter image-container display-table"><div><div class="image"></div></div></div></p><ul class="summary-list"><li>Velodyne Lidar, which sells technology for autonomous vehicles, has hired bankers for an IPO, according to people familiar with the process. </li><li>Going public would make Velodyne the first IPO in the emerging autonomous vehicle technology space.</li><li><a href="https://www.businessinsider.com/prime?module=article&amp;area=summary" target="_blank" rel="noopener">Click here for more BI Prime stories</a>.</li></ul><p>Autonomous vehicle technology company Velodyne Lidar has hired bankers for an IPO, according to sources familiar with the process.</p><p>Velodyne Lidar, which makes a laser technology that helps self-driving cars detect the objects around them, is working with Bank of America Merrill Lynch, Citigroup, Royal Bank of Canada, and William Blair for a potential public float, the people said.</p><p>The company is looking to surpass its last private valuation of $1.8 billion and go public before the end of the year, one person said.</p><p>Though autonomous vehicle technology is in its early days, Velodyne Lidar traces its origins back to 1983, the founding year of its parent company, <span>Velodyne Acoustics. </span></p><p>The company started making lidar technology around 2005, and then spun off from the audio division in 2016 with $150 million in financial backing from<a href="https://www.usatoday.com/story/tech/news/2016/08/16/ford-baidu-bet-150m-velodyne-laser-radar/88813028/"> Ford and Baidu</a>.</p><p>Velodyne closed $25 million funding round led by Japanese multinational Nikon at the end of 2018.</p><p><strong><em>Read more: </em></strong><em><a href="https://www.businessinsider.com/sources-describe-questionable-decisions-and-dysfunction-inside-ubers-self-driving-unit-before-one-of-its-cars-killed-a-pedestrian-2018-10">Uber insiders describe infighting and questionable decisions before its self-driving car killed a pedestrian</a></em><strong><br /><br /></strong>Going public would make Velodyne the first IPO in the emerging autonomous vehicle technology space.</p><p>The company's plans come at a high-stakes moment for the autonomous vehicle sector. Self-driving cars are <a href="https://www.businessinsider.com/waymo-cruise-mobileye-and-tesla-approaches-to-self-driving-cars-2018-10">at the brink of commercial adoption</a> but the space continues to face public set-backs, <a href="https://www.businessinsider.com/uber-not-criminally-liable-self-driving-death-2019-3">including a fatal accident</a> in which one of Uber's self-driving cars struck a pedestrian in March 2018. </p><p>Yet money continues to flow into the sector as competition grows between some of the biggest players, which include Google's Waymo, Tesla, GM's Cruise, and Intel/MobileEye.<br /><br />GM's self-driving car unit Cruise <a href="https://www.businessinsider.com/gm-self-driving-cruise-business-worth-19-billion-after-new-funding-2019-5">raised $1.15 billion in May</a> from GM, the SoftBank Vision Fund, and Honda. That round valued Cruise at $19 billion. </p><p>In June, Apple <a href="https://www.bloomberg.com/news/articles/2019-06-07/apple-to-buy-drive-ai-in-bid-for-more-autonomous-vehicle-talent">reportedly bought</a> self-driving car startup Drive.ai, an acquihire which gives the company access to more engineers from the AV world. Drive.ai was last valued at $200 million, according to PitchBook.</p><p>Quanergy Systems, one of Velodyne's biggest competitors, previously spoke to banks about going public though by August 2018 it had put those plans on hold, <a href="https://www.bloomberg.com/news/features/2018-08-13/how-a-billion-dollar-autonomous-vehicle-startup-lost-its-way">Bloomberg reported</a>.</p><p>Quanergy and Velodyne <a href="http://optics.org/news/10/6/11">are engaged in a patent dispute</a> over a Velodyne patent for a "high definition lidar system." The US Patent Trial and Appeals Board upheld Velodyne's patent at the end of May, though Quanergy has since said it plans to appeal that ruling.</p><p>Velodyne, Bank of America Merrill Lynch, and Citigroup declined to comment. Royal Bank of Canada and William Blair did not respond to a request for comment.</p><p class="tagline"><a href="https://www.businessinsider.com/intelligence/40-big-tech-predictions-for-2019?IR=T&amp;itm_source=businessinsider&amp;itm_medium=ctgr_bii&amp;itm_term=ctgr_leadgen&amp;itm_content=uber&amp;itm_campaign=40-big-tech-predictions-for-2019"></a></p>

Autonomous vehicle tech company Velodyne Lidar has hired bankers for an IPO in a high-stakes moment for the emerging industry

<p></p><div class="KonaFilter image-container display-table"><div><div class="image on-image"></div><p></p></div></div><ul><li><strong>A heavy rainstorm in New York City led to water pouring into several subway stations, prompting service changes.&#xa0;</strong></li><li><strong>Subway riders posted videos on social media of water flooding stations.&#xa0;</strong></li><li><strong>The MTA said it has sent teams out to help with the excess water.&#xa0;</strong></li></ul><p>New York City subway riders posted pictures of their morning commute on Monday, showing just how bad the state of the city's subway has become.&#xa0;</p><p>A heavy rainstorm in the city led to water pouring into several subway stations, prompting service changes.&#xa0;</p><p>The <a href="https://twitter.com/NYCTSubway/status/985883351029559296" target="_blank" rel="noopener">Metropolitan Transportation Authority said via Twitter</a> on Monday that the F and M trains had to bybass the 42nd St-Bryant&#xa0;Park stop because of water entering the station. The MTA also said that northbound 1 trains were forced to bypass 145th Street because of water in the station.&#xa0;</p><p>New York City subway riders captured the mayhem with their smartphones and posted videos on social media, showing how dire the situation had become. In some videos, it looks as though the subway car is actually above ground, not underground, because of how much water is pouring into the station.&#xa0;</p><p>New York City's subway system has come under fire as delays and performance problems have surged in recent years.&#xa0;</p><p><a href="http://www.businessinsider.com/how-nyc-subways-got-so-bad-nyt-report-2017-11" target="_blank" rel="noopener">A New York Times investigative report</a> published in November found that only 65% of trains actually arrived at their destination within five minutes of the expected arrival time. According to the report, a decline in funding and financial mismanagement contributed to the subway's poor performance.&#xa0;</p><p>"Performance is nowhere near good enough," New York City Transit Authority President <a href="http://www.businessinsider.com/nyc-subway-delays-cause-long-lines-photos-videos-2018-2" target="_blank" rel="noopener">Andy Byford said in an MTA board meeting</a> in February. "We're still struggling with far too many interruptions to service on the subway."</p><p>In response to the videos and images tweeted of the dire conditions on Monday, the <a href="https://twitter.com/NYCTSubway/status/985892185139826688" target="_blank" rel="noopener">MTA said via Twitter</a> that teams were sent to manage the water and ensure customer safety. The MTA also said an extensive drainage system is in place at the track level to remove excess water.&#xa0;</p><p>&#xa0;</p><div></div><div></div><div></div><div></div><div></div><div></div><div></div><div></div>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/dropbox-ceo-drew-houston-on-rejecting-steve-jobs-offer-2018-3">How one CEO went from rejecting an offer from Steve Jobs to an $11 billion IPO</a></h3>        <div>                    </div>    </div></hr>

These images of water pouring into NYC subway stations show just how dire conditions have become

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>GM</span></p><p class="caption">A GM-Cruise Chevy Bolt.</p></div><p></p></div></div></p><ul><li><strong>GM CEO Mary Barra told Wall Street that the next generation of the company's autonomous vehicles will arrive soon.</strong></li><li><strong>GM is building up a big lead in the driverless area.</strong></li><li><strong>Potential competitors lack GM's direct access to consumer mobility.</strong></li></ul><p><br />In many ways, <a href="http://markets.businessinsider.com/stock/GM-Quote">General Motors</a> is still the same company that emerged from bankruptcy in 2009 and staged an IPO in 2010. </p><p>The giant carmaker got smaller, shedding underperforming brands, and focused on making its business lean, mean, and sustainable. That's meant selling it Opel division to Peugeot after owning it since the early years of the 20th century, pulling out of the Russian market, and concentrating on maximizing profits in the US and China.</p><p>None of these moves were rewarded by Wall Street. GM's stock has lagged the markets for years.</p><p>But that's suddenly changing, as the carmaker plans to launch <a href="http://www.businessinsider.com/gm-to-launch-20-all-electric-cars-by-2023-2017-10">numerous new electric cars</a>, enter the ride-sharing market with its Maven brand, and expand its self-driving-car products through its 2016 acquisition of Cruise Automation, a San Francisco-based startup.</p><p>Wall Street likes what it sees. After GM posted yet another profitable quarter, beating expectations on Tuesday for Q3 results, it continued a pattern of surging to post-IPO-high stock prices, trading at $46, up almost 3%.</p><h2>A self-driving wake-up call</h2><p>The pace of GM's attack on the self-driving-car space has been a wake-up call. As CEO Mary Barra explained on a conference call with analysts after earnings were announced, "<span>GM and Cruise Automation recently deployed our latest generation self-driving electric test vehicle."</span></p><p><span>She added. "We believe it will meet the redundancy and safety requirements necessary to operate without a driver. It is our third generation of AV technology in just 14 months."</span></p><p><span>The third-generation isn't going to be around that long, however. In response to a question from Morgan Stanley analysts Adam Jonas, Barra said that "we're working on our fourth generation, that's where our focus is right now."</span></p><p><span>The GM-Cruise deal has led to the rollout of a fully integrated autonomous electric car - the tech is being built into Chevy Bolt EVs - that's being fleet-tested in San Francisco, Detroit, and Phoenix, with New York City to follow in 2018.</span></p><p><span><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Markets Insider</span></p><p class="caption">Wall Street</p></div><p></p></div></div></span></p><p><span>This is moving the stock because GM is rapidly staking the best claim in the auto industry to the self-driving future. With the exception of Waymo, Google's autonomous division, nobody else has really moved past the first generation of driverless tech (Audi has also been making progress - its new A8 sedan is supposed to be able to drive itself in traffic jams - but GM is farther along in combining advanced driverless tech with the vehicle-assembly process).</span></p><p><span>And while Waymo has racked up millions of driverless miles, it hasn't found a way to monetize the technology, apart from setting up a small fleet of Chrysler Pacifica minivans with partner Fiat Chrysler Automobiles.</span></p><p><span>GM, by contrast, has direct access to consumer mobility. For self-driving cars, it can launch the technology via its stake in Lyft (GM has invested $500 million) or sell self-driving vehicles to Uber. If it develops the technology to the point where it can be used safely outside a fleet context, it has a vast and global network of dealers. And the company owns its manufacturing facilities, so it doesn't need to partner with anyone to put driverless technology is actual cars.</span></p><p><span>It's taken a long time and many consecutive profitable quarters, but Wall Street is finally catching up to GM's potential.</span> </p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/tesla-value-surging-because-vision-so-intoxicating-2017-10">Tesla's value is surging 'because the vision is so intoxicating'</a></h3>        <div>                    </div>    </div>

GM is already preparing to launch its fourth generation of self-driving cars

<p><div class="KonaFilter image-container"><div class="image on-image"></div><p></p></div>Silicon Valley tech companies are known for showering their employees with all kinds of amazing perks, from <a href="http://www.businessinsider.com/22-amazing-dishes-at-the-googleplex-2014-10">free gourmet food</a> to futuristic <a href="http://www.businessinsider.com/aol-sleep-pods-2010-6#">nap pods</a>.</p>
<p>At LinkedIn, employees are encouraged to jam out like rock stars in rooms that are stocked with high-end music equipment. </p>
<p>The company's music program got its start in 2010, during a monthly community-building event the company calls InDays. <span style="font-size: 15px; line-height: 1.5em;">One week after engineering director Michael Olivier joined the company, he caught the finals of a LinkedIn Idol singing contest, the InDay activity for the month. </span></p>
<p>One of the finalists was Caitlin Crump, a data scientist who had also recently joined LinkedIn.</p>
<p>"I was taken by her singing," Olivier told Business Insider. "I wanted to play music in Mountain View, so I followed up with her to see if she would be interested."</p>
<p>After they found a drummer during another all-hands event, when new hires were asked to demonstrate a special skill, they decided to form a band together. </p>
<p>They named themselves "NextPlay" in honor of CEO Jeff Weiner's business philosophy. Legendary Duke basketball coach Mike Krzyzewski yells out "next play" whenever the team completes a play, regardless of how it went. That refusal to dwell on failure informs Weiner's approach to leadership, and it's a big catchphrase around the office. </p>
<p> <span style="font-size: 15px; line-height: 1.5em;">Once they had three people committed to NextPlay, the band contacted the company for funding. </span></p>
<p>"It was right around the time of the IPO, so obviously it was a good time to do it, but they've always been supportive of the idea," Olivier said. "<span id="docs-internal-guid-4f0b3ab8-eb0d-cd38-87da-c54ec55f5f10"><span>It turns out there are a lot of musicians here." </span></span></p>
<p>Not unlike your classic garage band, NextPlay got their start practicing in a loading dock that had been converted into a makeshift studio. They set up their equipment in a dusty corner with exposed rafters and packed file cabinets. </p>
<p>On November 18, 2011, NextPlay put on their first show. A few dozen people showed up to watch the band perform during their lunch break. </p>
<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"></div><p></p></div></div><div class="KonaFilter image-container display-table"><div><div class="image on-image"></div><p></p></div></div></p>
<p>Three years later, the music room has improved a great deal. When the weather's nice, they can open the garage door and play to the neighborhood. <span style="font-size: 15px; line-height: 1.5em;">The room has state-of-the-art AV equipment, drums, guitars, keyboards, microphone stands, and stage lighting. </span></p>
<p><span style="font-size: 15px; line-height: 1.5em;"><div class="KonaFilter image-container display-table"><div><div class="image on-image"></div><p></p></div></div></span></p>
<p>LinkedIn's music program includes well-developed facilities at their Mountain View headquarters, as well as at their offices in San Francisco and Dublin. Soon there will be music rooms at their Sunnyvale and New York City outposts as well. </p>
<p>And now there are two other bands in town: MYMK (or Musicians You May Know, a twist on LinkedIn's connection recommendation feature) and Colonel Panic, a geeky pun that's a play on Kernel Panic, the name for what happens when a computer freezes.</p>
<p>But none of that would have happened without NextPlay. The original band hosts jam sessions every Friday, which anyone can join, and their performances are a key feature of the tour the company gives to executives and interviewers who visit campus. <strong><br /></strong></p>
<p>The band has changed quite a bit, too, as some members have changed offices, while others have left the company altogether. </p>
<p class="p1">The current team includes Olivier on keys and vocals, senior systems engineer Andrey Bibik on guitar, senior product marketing manager Andrew Kaplan also on guitar, senior systems engineer Levi Doucette on bass, and senior videographer and AV technical engineer Phil Jackson on drums. Crump still fronts the band.</p>
<p>Olivier describes their sound as "an eclectic mix of rock, pop, blues, and funk" that mixes songs from the '70s and '80s with today's radio hits. They've also played a few original songs written by Olivier and Crump. </p>
<div><biembeddedobject id="82e9de1a-616b-4368-c3b7-a4364467fc4e"></biembeddedobject></div>
<p class="embed-spacer"></p>
<p class="embed-spacer">This past May, as part of the company's Cinco de LinkedIn anniversary celebration, NextPlay took the stage at the Shoreline Amphitheater, an enormous 22,500-capacity venue in Mountain View. It was their biggest show yet. </p>
<p class="embed-spacer"><span>"We all saw that the Jumbotron was behind us when we were practicing, but we were glad we couldn't see it when we were actually playing," Olivier said with a laugh. </span>"It was a <span><span>once-in-a-lifetime experience for us to be able to play on that stage where so many world-class musicians have played."</span></span></p>
<div><biembeddedobject id="2ad79795-bb21-4173-d2c7-c0d617c50287"></biembeddedobject></div>
<p class="embed-spacer"></p>
<p class="embed-spacer">NextPlay usually practices for an hour during lunch twice a week, but anyone with an interest in music can access the facility after they've completed the proper training. <span>Employees can even take lessons on the acoustic guitar, piano, and drums. </span></p>
<p class="embed-spacer">And according to Olivier, it's not only amateurs goofing around on the drum set.</p>
<p class="embed-spacer">"<span style="font-size: 15px; line-height: 1.5em;">It's hard to make money in the music industry," Olivier said. "These are people who are amazing musicians but also happen to work at a tech company." </span></p>

LinkedIn Has An Employee Rock Band, And They're Pretty Awesome

Indian Paralympic <keyword id="19929069" type="General" weightage="20" keywordseo="Athletes" source="keywords">athletes</keyword> received a grand welcome at <keyword id="19900881" type="General" weightage="20" keywordseo="Delhi" source="keywords">Delhi</keyword>'s Indira Gandhi International Airport on their return home from Paris, after putting up a record-breaking show at the Paris <keyword id="20396851" type="General" weightage="20" keywordseo="Paralympics" source="keywords">Paralympics</keyword>.<br /><br />On Saturday morning, half of the Indian contingent made their return home after taking part in the Paris Paralympics.<br /><br />AvLekhara, Mona Agarwal, Pranav Soorma, Rakesh Kumar, and Manish Narwal are among others who touched down in Delhi. Fans outside the Delhi gathered in huge numbers and greeted the para-athletes by showering flower petals on them.<br /><br />Other athletes of the Indian contingent will return back after the conclusion of the para multi-sport event.<br /><br />Star <keyword id="19895063" type="General" weightage="20" keywordseo="India" source="keywords">India</keyword> parashooter Avani Lekhara said that it was a great journey at the Paris Paralympics.<br /><br />"It has been a good journey, and we have won many good medals this time," Avani told ANI.<br /><br />Indian para shooter Mona Agarwal said that her Paralympic journey was very good.<br /><br />"I am feeling very good as I am receiving so much love...My Paralympic journey was very good, as it was my first Paralympic," Mona told ANI.<br /><br />Reigning Paralympic champion, Avani Lekhara maintained her streak and struck gold in the women's 10m air rifle final at the Paris Paralympics on Friday. She also became the first Indian woman to win two gold medals in the Games' history.<br /><br />Shooter Mona Agarwal bagged the bronze medal at the same event.<br /><br />Meanwhile, para-archer Rakesh Kumar gave all the credit for the victory to his coaches.<br /><br />"I am feeling very good...The credit for my victory goes to my coaches...We will work hard and perform better at the next Paralympics," Rakesh told ANI.<br /><br />The Indian archery pair of Rakesh Kumar and Sheetal Devi clinched the bronze medal in the Mixed Team Compound event with a win over Eleonora Sarti and Matteo Bonnacina of Italy at the ongoing Paris Paralympics.<br /><br />They defeated the Italian pair with a scoreline of 156-155 in the bronze medal match of the ongoing marquee event on Monday. With this win, they bagged a bronze medal for their country.<br /><br />The ongoing Paris Paralympics started on August 28 and will conclude on September 8.<br /><br />India's medal tally in the ongoing Paralympics has gone up to 27, with six gold medals, nine silver medals, and 12 bronze medals. This is the most gold India has ever won at a Paralympics Games event, outdoing the total of five golds in Tokyo 2020.<br /><br />Indian para-athletes in particular have made the country proud with three golds, six silvers, and six bronze medals, giving them a total of 15 medals.<br /><br /><strong>SEE ALSO:<br /><br /><a href="https://www.businessinsider.in/finance/news/here-are-the-benefits-you-get-with-indias-most-expensive-credit-card-with-a-3-54-lakh-annual-fee/articleshow/113123752.cms">Here are the benefits you get with India’s most expensive credit card with a ₹3.54 lakh annual fee</a><br /><br /><a href="https://www.businessinsider.in/business/auto/news/fada-urges-banks-to-tighten-funding-to-dealers-as-rains-play-spoilsport-in-august/articleshow/113111945.cms">FADA urges banks to tighten funding to dealers as rains play spoilsport in August</a><br /><br /></strong><a href="https://www.businessinsider.in/stock-market/webstories/bajaj-housing-finance-ipo-price-band-to-risk-factors-all-you-need-to-know/slidelist/113131102.cms"><strong>Bajaj Housing Finance IPO – Price band to risk factors, all you need to know</strong></a><br />

India's history-making Paralympians touch down in Delhi to rousing welcome

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div><p></p></div></div>Here is what you need to know.</p><p><strong><a href="http://www.businessinsider.com/janet-yellen-says-economic-data-hasnt-notably-strengthened-2017-3">Janet Yellen made an unsettling admission about the economy</a>. </strong>The Fed raised its benchmark interest rate 25 basis points to a range of 0.75% to 1.00% at Wednesday's meeting, making for the third rate hike since the financial crisis. However, in her accompanying press conference, Yellen noted, "<span>The data have not notably strengthened."</span></p><p><strong><a href="http://www.businessinsider.com/dutch-election-results-2017-3?r=UK&amp;IR=T">The Dutch election deals a blow to populism</a>. </strong>Prime minister Mark Rutte's ruling People's Party for Freedom and Democracy is projected to win 33 seats in Wednesday's election, 13 more than <span>populist leader Geert Wilders.</span></p><p><strong><a href="http://www.businessinsider.com/the-bank-of-japan-leaves-policy-unchanged-2017-3">Japan kept policy on hold</a>. </strong>In a 7-2 vote, the Bank of Japan held its key rate at -0.1% and pledged to target a 10-year Japanese government bond yield of 0%. "<span>With regard to the outlook, Japan's economy is likely to turn to a moderate expansion," the BOJ said in its statement. </span></p><p><strong>Oil's bounce continues. </strong>West Texas Intermediate crude oil trades up 1% at $49.32 per barrel after data released by the International Energy Agency on Wednesday showed US crude stockpiles fell for the first time in 10 weeks. Oil gained more than 2% on Wednesday.</p><p><strong><a href="http://www.businessinsider.com/tesla-250-million-stock-offering-ahead-of-model-3-launch-2017-3">Tesla is raising cash</a>. </strong>The automaker announced it will raise $1.15 billion mostly through the sale of common stock ($250 million) and convertible senior notes ($750 million). Tesla CEO Elon Musk will also buy more shares.</p><p><strong><a href="http://www.businessinsider.com/oracle-fiscal-q3-earnings-beat-profit-revenue-targets-2017-3">Oracle's cloud business had a huge quarter</a>. </strong>The business software maker announced better than expected adjusted revenue and profit, helped by sales at its cloud business surging 62 percent to $1.19 billion, Reuters reports.</p><p><strong><a href="http://www.businessinsider.com/gopro-cutting-270-jobs-2017-3">GoPro announces more layoffs</a>. </strong>The action camera maker announced it is eliminating 270 jobs in what is the second round of layoffs in three months.<span>"We now </span><span>expect to deliver revenue in the upper end of our guidance range of between </span><span>$190 million and $210 million," CEO Nick Woodman said in a statement. </span></p><p><strong><a href="https://investor.canadagoose.com/English/news-events-and-reports/press-releases/press-release-details/2017/Canada-Goose-Announces-Pricing-of-Initial-Public-Offering/default.aspx">Canada Goose prices its IPO</a>. </strong>The winter apparel maker known for its coyote fur lined coats priced its initial public offering at <span>C$17 ($12.78) per share, above the C$14-C$16 range that Wall Street was expecting. Shares will trade under the ticker "GOOS."</span></p><p><strong><a href="http://markets.businessinsider.com/indices">Stock markets around the world are higher</a>. </strong>Hong Kong's Hang Seng (+2.1%) led the overnight advance and Germany's DAX (+1%) paces the gains in Europe. The S&amp;P 500 is set to open up 0.2% near 2,391.</p><p><strong>US economic data remains heavy. </strong>Housing starts, building permits, initial claims, and the Philly Fed will all be released at 8:30 a.m. ET before JOLTS Job Openings cross the wires at 10 a.m. ET. The US 10-year yield is up 4 basis points at 2.53%.</p>

10 things you need to know before the opening bell

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Reuters</span></p><p class="caption">A man rides a Lyft scooter near the White House in Washington DC</p></div><p></p></div></div></p><ul class="summary-list"><li>JPMorgan says Lyft's core ride-hailing business is already profitable in certain markets. </li><li>It's other bets on things like bikes, scooters, and self-driving cars that are dragging down the company's balance sheet. </li><li>Other Wall Street analysts have also raised their estimates and targets for Lyft following second-quarter earnings that topped expectations. </li><li><strong><a href="https://www.businessinsider.com/?hprecirc-bullet">Visit Business Insider's homepage for more stories</a>.</strong></li></ul><p>Lyft could turn a profit sooner than Wall Street previously thought, and analysts are beginning to take notice.</p><p>What's more, the company's central ride-hailing component could already be profitable in many busy cities, JPMorgan estimates. It's the other, more expensive bets like those on self-driving cars and bike and scooter rentals that are siphoning off the excess revenue.</p><p>"We believe that virtually all of Lyft's rideshare markets are profitable when including fully loaded Sales &amp; Marketing and that core ridesharing profitability is far ahead of the company overall due to heavy investments in bikes &amp; scooters and AV," the bank said in a note to clients last week, reiterating its "overweight" rating for the stock.</p><p>That's all thanks to a quicker-than-expected growth in the United States' ride-hailing market, which Lyft estimates could be as large as $1.2 trillion annually, when accounting for how much Americans' spend on <keyword id="34991" type="ORGANIZATION" weightage="60" keywordseo="transportation">transportation</keyword> each year.</p><p>"We believe the biggest change in Lyft's business since the IPO five months ago is how quickly the US rideshare market has rationalized," JPMorgan said.</p><p>JPMorgan's not the only sell-side shop impressed by how quickly Uber and Lyft have been able to stave customers off of the coupons and fare discounts that helped both companies grow and gain market share leading up to their public offerings earlier this year.</p><p><em><strong>Read more:</strong> <a href="https://www.businessinsider.com/uber-lyft-drivers-reveal-hardest-part-about-driving-2019-8">Uber and Lyft drivers reveal the hardest parts of their jobs</a></em></p><p>"The worry initially was that it could be tough to raise fares or cut driver pay in a competitive category, or to extract enough OpEx leverage in the absence of either of those," Jake Fuller, an analyst at Guggenheim, said in a note to clients on Monday raising the firm's target price for shares of Lyft to $60. Those worries have started to fade.</p><p>"We all underestimated how quickly the competitive mindset might shift under public ownership and how much leverage there is in the model to pricing," Fuller continued. "Price increases should stimulate take-rate, bolster contribution margin and yield narrowing losses, with the potential for upside to consensus across key metrics."</p><p>Overall, Wall Street remains optimistic about Lyft's prospects, giving the stock an average price target of $73, with a majority of analysts rating the name a "buy," according to a Bloomberg poll.</p><p>On it's second-quarter earnings, which beat analyst expectations and catalyzed some of Wall Street's recent optimism, Lyft's CFO Brian Roberts reiterated that the company expects 2019 to be its "peak investment year."</p><p>"We expect that the momentum and the efficiencies we are realizing in our core ride sharing business, will enable us to make progress on our path to profitability and to be clear, we are not reducing our investments in key strategic initiatives including bikes and scooters, autonomous and driver centers," he said. "It's just the strength and momentum in ride sharing that's helping offset the investments we're making."</p><p><strong>Are you a Lyft employee? </strong><em>We want to hear from you. Get in touch with this reporter at </em><a href="mailto:grapier@businessinsider.com"><span><em>grapier@businessinsider.com</em></span></a><em> Secure contact methods, including Signal, </em><a href="https://www.businessinsider.com/author/graham-rapier"><span><em>can be found here.</em></span></a><em> Do not use a work phone or computer. </em></p><p class="tagline"><a href="https://www.businessinsider.com/intelligence/40-big-tech-predictions-for-2019?IR=T&amp;itm_source=businessinsider&amp;itm_medium=ctgr_bii&amp;itm_term=ctgr_leadgen&amp;itm_content=uber&amp;itm_campaign=40-big-tech-predictions-for-2019-3"></a></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="https://www.businessinsider.com/mexico-buy-legal-gun-store-2015-8">Mexico has just one store where you can legally buy a gun and it's located on a heavily-guarded military base</a></h3>        <div>                    </div>    </div>

Lyft's main taxi business is already profitable in some areas, but self-driving cars and bike-sharing are eating into that revenue

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>REUTERS/Eduardo Munoz</span></p><p class="caption">Raquel Urtasun, chief scientist at Uber Advanced Technologies Group (ATG), attends a Reuters Newsmaker event in New York City, U.S., April 8, 2019</p></div><p></p></div></div></p><ul class="summary-list"><li><strong>Autonomous vehicles are key to Uber and Lyft's grand plans for global expansion. </strong></li><li><strong>The technology could <a href="https://www.businessinsider.com/lyft-drivers-should-become-mechanics-for-self-driving-cars-after-being-replaced-by-robo-taxis-2019-5">slash fares for customers and cut operating costs</a> by massive percentages. </strong></li><li><strong>But new research from MIT has thrown cold water on some of those dreams, showing that operating costs may still be more than personal car ownership. </strong></li><li><a href="https://www.businessinsider.com/?hprecirc-bullet" target="_blank" rel="noopener">Visit Business Insider's homepage for more stories.</a></li></ul><p><a href="https://www.businessinsider.com/category/uber">Uber</a><span style="color: #222222; font-family: Georgia, Times, sans-serif;"> and </span><a href="https://www.businessinsider.com/category/lyft">Lyft</a><span style="color: #222222; font-family: Georgia, Times, sans-serif;"> lose a lot of money.</span></p><p>Combined, the ride-hailing firms lost some $3.8 billion in 2019 alone,<a href="https://www.businessinsider.com/uber-versus-lyft-charts-that-show-the-battle-for-ride-hailing-2019-4"> according to the companies' IPO filings. </a></p><p>Most investors, and many Wall Street analysts, are pinning the premise of ever turning a profit on self-driving cars. After all, paying drivers is a massive expense that could be all but eliminated with autonomous vehicles.</p><p>But new research from MIT has thrown cold water on the idea that robotaxis will save the ride-hailing operators much money, at least not without massive improvements to their algorithmic dispatching efficiencies.</p><p>"Although the cost proposition of autonomous taxis (ATs) may be improved by more closely matching supply with demand, we demonstrate that achieving maximum utilization would still leave ATs fiscally uncompetitive with conventionally driven vehicles (CDVs)," authors Ashley Nunes and Kristen Hernandez write in their paper.</p><p>Specifically, their findings - based on data from San Francisco, a single market - point to a cost between $1.58 and $6.01 per mile to operate autonomous vehicles with single occupants. That's much higher than the widely used $0.40 (or less) per mile estimate, and higher than the <a href="https://www.bts.gov/content/average-cost-owning-and-operating-automobile"><span>average costs of personal car ownership</span></a> (which is around $0.59 per mile, according to US' Bureau of <keyword id="34991" type="ORGANIZATION" weightage="100" keywordseo="transportation">Transportation</keyword> Statistics).</p><p><em><strong>Read more: </strong><a href="https://www.businessinsider.com/lyft-drivers-should-become-mechanics-for-self-driving-cars-after-being-replaced-by-robo-taxis-2019-5" data-analytics-position="7">Lyft executive suggests drivers become mechanics after they're replaced by self-driving robo-taxis</a></em></p><p>What's more, Uber and Lyft currently pay drivers up to $2 per mile in some of the more expensive cities, like New York.</p><p>Here's the researchers' full breakdown of estimates AV operating costs:</p><p><div class="KonaFilter image-container display-table click-to-enlarge"><div><div class="image on-image"><a title_source="MIT" title_caption="" class="zoomin" href="https://static-ssl.businessinsider.com/image/5cee9ba211e205117c12c712-960/screen shot 2019-05-29 at 101343 am.png"><span class="sprites click-to-enlarge-icon" title="Click to enlarge"></span></a><p class="source"><span>MIT</span></p></div><p></p></div></div></p><h2><strong>It all comes down to utilization rates</strong></h2><p>Utilization rates are a key measure for ride-hailing operators. In short, the measure accounts for the fraction of time that a driver (or autonomous vehicle) is shuttling a fare-paying passenger.</p><p>Multi-passenger trips, like those of current Uber Pool and Lyft Line offerings, could help bring costs down and increase those utilization rates, but the increases in efficiency will need to be dramatic, the researchers found.</p><p>"In a single ridership model, we find capacity utilization rates would need to improve by nearly 100% and margins lowered by 37% for autonomous vehicles to achieve cost parity with their conventionally driven counterparts," they write. "In a multiple ridership model, achieving cost parity requires a 30 percent increase in occupancy rates and a 75 percent increase were a stronger cost proposition offered to incentivize shared autonomous vehicle use over conventionally driven vehicles."</p><p>Lyft did not immediately respond to a request for comment from Business Insider and Uber declined to comment. </p><p>For their study, the MIT researchers used a utilization rate of 52%, based on their San Francisco sample data. But even if those rates do reach 100% utilization, operating costs might still be more than a traditional vehicle. </p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>UBS</span></p></div><p></p></div></div>"We find that while capacity utilization levies the greatest influence on fares, and current utilization rates leave room for improvement, achieving maximum utilization yields a cost proposition that is still higher than CDV," they write.</p><p>That might be complicated even further given that most consumers expect a steep discount when sharing rides with other customers, according to UBS research.</p><p>"If passengers are willing to share utilization can improve even further," the Wall Street bank's autos group, lead by Colin Langan, said in a research note to clients this week. "Unfortunately, the potential for sharing is low as consumers tend to demand a large discount for the added trip length &amp; discomfort."</p><h2>More Robo-taxi news:</h2><ul><li><a href="https://www.businessinsider.com/uber-lyft-fare-prices-could-fall-by-80-ubs-estimate-2019-5" data-analytics-position="1">Your Uber ride could get 80% cheaper over the next decade</a></li><li><a href="https://www.businessinsider.com/uber-lyft-businesses-that-arent-taxis-compared-delivery-bikes-autonomy-2019-5" data-analytics-position="1">From food delivery to self-driving cars, here's how all of Uber and Lyft's side-businesses compare</a></li><li><a href="https://www.businessinsider.com/ride-hailing-startup-treats-drivers-as-employees-unlike-uber-and-lyft-congestion-2019-5" data-analytics-position="8">Evidence is mounting that Uber and Lyft increase traffic congestion. But one startup thinks it has found a way to help - and it's already turning a profit.</a></li></ul><p class="tagline"><a href="https://www.businessinsider.com/intelligence/40-big-tech-predictions-for-2019?IR=T&amp;itm_source=businessinsider&amp;itm_medium=ctgr_bii&amp;itm_term=ctgr_leadgen&amp;itm_content=uber&amp;itm_campaign=40-big-tech-predictions-for-2019"></a></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="https://www.businessinsider.com/bmw-x7-suv-review-tech-cruise-control-voice-command-parking-assistant-2019-5">We tested BMW's largest SUV to see if its tech features are helpful or gimmicky - here's the verdict</a></h3>        <div>                    </div>    </div>

Uber and Lyft are betting on self-driving cars to become profitable. But that may not happen, new research from MIT suggests.

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Carlo Allegri/Reuters</span></p><p class="caption">Uber CEO Dara Khosrowshahi</p></div><p></p></div></div></p><ul class="summary-list"><li><a href="https://www.businessinsider.com/category/uber" target="_blank" rel="noopener">Uber</a> has spun out its self-driving car unit as an LLC with the unit's chief Eric Meyhofer as CEO, as part of its $1 billion investment deal.</li><li>People inside the company say that the company is taking safety more seriously since their car killed a pedestrian last year.</li><li>But they say that the car still doesn't drive itself all that well.</li><li>One person likened it to a "science experiment."</li><li><strong><a href="https://www.businessinsider.com/?hprecirc-bullet" target="_blank" rel="noopener">Visit BusinessInsider.com for more stories.</a></strong></li></ul><p> </p><p>On the road to one of the biggest tech IPO's in years, Uber CEO Dara Khosrowshahi has dealt with his rock-and-hard-place issue by securing $1 billion from investors for the company's self-driving car unit, valuing the unit at $7.5 billion, <a href="https://www.uber.com/newsroom/toyota-denso-and-softbank-vision/">Uber confirmed on Friday.</a></p><p>That investment, from Softbank and Toyota (both of whom own stakes in Uber), spins out a new limited liabilities corporation for Uber's Advanced Technologies Group (ATG). The new LLC has named ATG's leader, Eric Meyhofer, as CEO, Business Insider has confirmed from people knowledgeable of the deal.</p><p>Most of the board will be run by Uber, but there will be one board seat for Softbank and one for Toyota after the deal closes, which is expected in the third quarter. </p><p>Uber's development of its own self-driving cars is an important part of convincing investors that Uber has a long, bright future full of financial growth when it becomes a public company. Uber mentions autonomous vehicle 103 times in <a href="https://www.sec.gov/Archives/edgar/data/1543151/000119312519103850/d647752ds1.htm">its prospectus</a> calling "autonomous vehicle technologies" part of its "growth strategy."</p><p>And Uber has dangled <a href="https://www.businessinsider.com/uber-ceo-khosrowshahi-bonus-120-billion-ipo-2019-4">financial incentives at Khosrowshahi worth around $100 million</a> if he can convince investors to value the company at $120 billion or more for 90 consecutive days, it revealed in its prospectus.</p><p>Many believe that self-driving cars will be the future of <keyword id="34991" type="ORGANIZATION" weightage="60" keywordseo="transportation">transportation</keyword>, particularly the future of Uber's niche, transportation for hire. </p><p>Yet, people inside that unit have been telling <a href="https://www.businessinsider.com/sources-describe-questionable-decisions-and-dysfunction-inside-ubers-self-driving-unit-before-one-of-its-cars-killed-a-pedestrian-2018-10">Business Insider for months</a> that Uber's self-driving cars don't work very well, only perform reliability on limited well-mapped routes, and aren't making much progress handling more.</p><p>We have also heard that some engineers working there <a href="https://www.businessinsider.com/uber-atg-employees-describe-a-stressful-culture-2018-12">question the Meyhofer's </a><a href="https://www.businessinsider.com/uber-atg-employees-describe-a-stressful-culture-2018-12">leadership </a><a href="https://www.businessinsider.com/uber-atg-employees-describe-a-stressful-culture-2018-12">capabilities</a> for the task, as his background is in robotics hardware, but self-driving cars rely on autonomy software as its brains. </p><p>"Seemingly, if you look at the way Eric Meyhofer runs ATG, I don't know if we're actually building a product," one employee, who asked to remain anonymous for fear of retribution, said. "It seems like we are running a science experiment."</p><p>Uber's Advanced Technologies Group (ATG), the unit creating Uber's self-driving car, is currently overhauling the car's so-called "autonomous stack" aka the robot-driving software, the employee said.</p><p>Others close to the company describe these changes as "always making improvements."</p><h2>Two grabs of the wheel every mile</h2><p>There is some data that backs this person's dismal characterization of Uber's self-driving tech.</p><p><a href="https://www.dmv.ca.gov/portal/wcm/connect/f19a3a59-0e7f-4827-9318-9a9684aa0864/UATCLLC_UBER.pdf?MOD=AJPERES&amp;CVID=">In February the state of California</a> released self-reported data on "disengagements" from all autonomous vehicle companies licensed to drive in the state. That refers to how often human safety drivers "disengage" the car's self-driving capabilities and take control of the car themselves.</p><p><span><a href="https://www.dmv.ca.gov/portal/wcm/connect/f19a3a59-0e7f-4827-9318-9a9684aa0864/UATCLLC_UBER.pdf?MOD=AJPERES&amp;CVID=">Uber reported</a> that its cars had driven nearly 27,000 miles in self-driving mode in the state between March 8, 2017, and November 30, 2018. Human drivers manually took control over 70,000 times. That means that </span><span>for every mile the car drove itself, a driver grabbed the wheel 2.6 times.</span></p><p><span style="color: #000000;"><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span><a href="https://ubernewsroomapi.10upcdn.com/wp-content/uploads/2017/07/Eric_Newsroom_1000px_R3.jpg">Uber</a></span></p><p class="caption">ATG chief Eric Meyhofer</p></div><p></p></div></div>Compare that track record to Waymo, the self-driving car company spun out from Google, that pioneered the field and is considered the market leader. </span><span>Waymo reported that in 2018, human drivers were taking control of its robot cars only <a href="https://medium.com/waymo/an-update-on-waymo-disengagements-in-california-d671fd31c3e2">1 time per 11,017 miles while in self-driving mode.</a></span><span></span></p><p><span>It's worth noting that Uber's report only covers about a year.</span></p><p><span>On March 18, 2018, <a href="https://www.businessinsider.com/sources-describe-questionable-decisions-and-dysfunction-inside-ubers-self-driving-unit-before-one-of-its-cars-killed-a-pedestrian-2018-10">one of its cars killed a pedestrian</a> in Arizona and Uber benched the cars until December. They haven't returned to California roads but are driving in Pittsburgh, the home of ATG's headquarters. Pennsylvania does not require <a href="https://www.mcall.com/news/pennsylvania/mc-nws-pittsburgh-autonomous-vehicles-20190304-story.html">AV car companies to disclose</a> disengagement information.</span></p><p><span>The employee we talked to says the cars' ability to drive themselves have not made giant strides of progress in the four-plus months since they've been back on the road. </span></p><p><span>Insiders previously told Business Insider that before the crash, the cars had trouble around foliage, certain shadows, tree branches, lots of things. </span><span>One former safety <a href="https://www.businessinsider.com/uber-atg-employees-describe-a-stressful-culture-2018-12">driver told us he needed medical attention</a> from the time his car continuously slammed on the brakes whenever it detected a pedestrian on the sidewalk.</span></p><p>When Uber released the disengagement report, the company explained the comparatively high number by saying that drivers are trained to take the wheel. </p><p>"We measure self-driving system performance by looking at a variety of measures including computer-generated simulation of real-world events and test track results. Safety is our priority. Our Mission Specialists are trained to err on the side of caution and to take manual control of our system any time they think it is necessary."</p><h2>$400,000 and counting</h2><p><span>The person we talked to says the big bright spot is that </span><span>ATG has made progress on the </span>16 internal safety-related goals it set for employees after returning to the roads.</p><p>These include developing better metrics to measure safety and improving the safety driver operator program. People at ATG feel empowered to speak up over safety issues, according to the most <a href="https://www.businessinsider.com/uber-self-driving-car-unit-leaked-employee-survey-2018-12">recent employee survey we obtained.</a></p><p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>Uber</span></p></div><p></p></div></div>However, others tell us that the pay is so good, many folks are in heads-down mode, not wanting to rock the boat over how well the car is performing.</p><p>Some don't want to kill their cash cow, this person said, echoing what another half dozen former employees have previously told us.</p><p>A typical senior ATG engineer, not a director, but an experienced worker bee, can make $300,000-$400,000 a year between salary, bonuses, and stock, multiple people have told us. </p><p>Many highly paid engineers believe their stock will be worth another couple hundred thousand if Uber's IPO goes well, one person said.</p><p>And those inside Uber speculate that Meyhofer will be worth millions, if not tens of millions, after the IPO, thanks to his years at Uber and hefty stock awards for his senior role. </p><p><span>With that much money at stake, this insider echoed what others had told us: that some people feel working at ATG is increasingly political, with promotions and plum jobs doled out based on who you know.</span></p><p><span>Others close to the company say those complaints are invalid, saying the hiring process at ATG is rigorous.</span></p><p><span>Many employees there don't much feel the presence of CEO Dara Khosrowshahi. </span></p><p>"I really like Dara. But he has got to be more visible at ATG. This whole culture is broken and broken in the same way that Uber 1.0 was broken," this employee says.</p><p>But now that ATG is its own LLC, with board members, including one from Toyota, assigned to the task, people are hoping that oversight of the project will improve. </p><p>The ATG employee explains, "T<span>he main issue is nothing is working and they demoed known routing to get investments. But after they spin off they will absolutely need to show performance with facts to backup."</span></p><ul class="read-more-links"><li>Read more:</li><li><a href="https://www.businessinsider.com/uber-atg-employees-describe-a-stressful-culture-2018-12">Uber employees describe a stressful and 'ridiculous' culture at the self-driving-car unit under its current leader, Eric Meyhofer</a></li><li><a href="https://www.businessinsider.com/sources-describe-questionable-decisions-and-dysfunction-inside-ubers-self-driving-unit-before-one-of-its-cars-killed-a-pedestrian-2018-10" data-read-more-link="" data-e2e-name="read-more-link">Uber insiders describe infighting and questionable decisions before its self-driving car killed a pedestrian</a></li><li><a href="https://www.businessinsider.com/uber-autonomous-driving-unit-used-strange-term-for-people-and-animals-2018-11" data-read-more-link="" data-e2e-name="read-more-link">Uber employees say the company's autonomous driving unit used this strange term to describe people and animals</a></li><li><a href="https://www.businessinsider.com/uber-removed-second-driver-from-self-driving-cars-before-deadly-crash-2018-11" data-read-more-link="" data-e2e-name="read-more-link">Uber removed the second backup driver from its self-driving cars ahead of the crash that killed an Arizona pedestrian</a></li><li><a href="https://www.businessinsider.com/trees-are-wreaking-havoc-on-uber-self-driving-car-software-2018-11" data-read-more-link="" data-e2e-name="read-more-link">Why trees have wreaked havoc on Uber's self-driving program</a></li><li>'<a href="https://www.businessinsider.com/uber-ceo-tells-employees-self-driving-car-unit-screwed-up-2018-11">We have screwed up': Uber CEO Dara Khosrowshahi says in an all-hands meeting that the company deserves some fault after its self-driving car killed a pedestrian</a></li><li><a href="https://www.businessinsider.com/uber-self-driving-car-unit-leaked-employee-survey-2018-12">Uber employees working on self-driving cars feel their cars are safer but their careers are stuck, according to leaked employee survey</a></li><li> <a href="https://www.businessinsider.com/uber-ceo-tells-employees-self-driving-car-unit-screwed-up-2018-11"></a></li></ul>  <p class="tagline"><a href="http://read.bi/ai-101-free"></a></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="https://www.businessinsider.com/disney-plus-finally-reveal-its-streaming-platform-2019-4">Disney Plus is set to have more than 500 movies and 7,500 TV shows. Here's a look at which ones you'll find.</a></h3>        <div>                    </div>    </div>

An engineer at Uber's self-driving car unit warns that it's more like 'a science experiment' than a real car capable of driving itself

<p><strong><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Thomson Reuters</span></p><p class="caption">A woman gets in a self-driving Chevy Bolt EV.</p></div><p></p></div></div></strong></p><ul><li><strong>In the 20th century, <a href="http://markets.businessinsider.com/stock/GM-Quote">General Motors</a> outcompeted <a href="http://markets.businessinsider.com/stock/F-Quote">Ford</a>.</strong></li><li><strong>Ford was the early innovator, but GM was able to improve on Ford's achievements to become dominant.</strong></li><li><strong>The same dynamic is now playing out between GM and <a href="http://markets.businessinsider.com/stock/TSLA-Quote">Tesla</a>, with electric cars and autonomous vehicles.</strong></li></ul><p><br />About a century ago, give or take a decade, the Ford Motor Company was <em>the</em> American carmaker. Its Model T was the first successful vehicle for everybody, and its founder, Henry Ford, was the greatest businessman in history, warts and all.</p><p>At the time, General Motors was a disorganized cluster of brands, while Ford was cranking away. That all changed when Alfred Sloan took over as GM's President in the 1920s. He restructured GM to be what we now recognize as the first professionally managed global conglomerate, the model of the modern corporation. </p><p>GM's brands became a strength as the company was able to market a car to customers of "every purse and purpose." The philosophy contrasted with Ford's, which was to sell you any car you wanted, as long as it was a black Model T.</p><p>Sloan's ideas and execution fit perfectly with the arrival of post-war American consumer culture. Ford obviously didn't vanish, but it was relegated to number-two status as GM took control of half the auto market at its peak in the 1950s.</p><h2>Tesla arrives on the scene</h2><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span><a href="https://commons.wikimedia.org/wiki/File:Elon_Musk,_Tesla_Factory,_Fremont_(CA,_USA)_(8765031426).jpg">Maurizio Pesce / Wikimedia Commons</a></span></p><p class="caption">Tesla CEO Elon Musk with the Model S.</p></div><p></p></div></div></p><p>In the ensuing decades, as the US market changed and became more competitive, a lot of GM hatred emerged. When the company finally had to be bailed out by the government and entered bankruptcy in 2009, there was a barely-disguised sense of glee in some quarters. GM was an evil empire, and its merciless ways had finally caught up with it.</p><p>Interestingly, as GM was entering Chapter 11, Tesla was barely escaping its own insolvency. A few years later, it would launch its Model S sedan, with clear evocations of the Model T in the name. And in 2010, both GM and Tesla would stage IPOs.</p><p>Tesla's stock is up over 1,000%, while GM is up ... 34%, with much of that coming in the past year after a long period when shares went nowhere.</p><p>Tesla looks like the big winner, while GM looks like the also-ran, and that's the narrative that Tesla fans and devotees of "disruption" have seized upon. Gene Munster, a former analyst-turned-venture capitalist, has argued that Tesla could capture 65% of the US market, selling 11 million vehicle annually. </p><p>That's a <a href="http://www.businessinsider.com/tesla-model-3-increases-mania-2017-7">nonsensical overstatement</a>, but it summarizes the crazed enthusiasm around Tesla's prospects.</p><p>Naturally, it overlooks competition - and conveniently, too, because if Tesla gets bigger, it will have to compete more broadly in the US car market, where competition is brutal. GM is the biggest player in the market, and it has just a 20% share. </p><h2>Tesla takes on all the risk, but doesn't get all the rewards</h2><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Bill Pugliano / Stringer</span></p><p class="caption">GM CEO Mary Barra.</p></div><p></p></div></div></p><p>Tesla hasn't faced any meaningful competition yet because nobody has wanted to invest the money in electric vehicles when they make up only 1% of the global market. But as Tesla has grown - it delivered 100,000 vehicles in 2017 - established automakers have studied its progress and benefitted from Tesla taking on all the first-mover risk.</p><p>When Ford took the plunge on mass-production for a mass market, nobody was sure if motor cars would catch on in a big way. But Henry Ford understood that what people really wanted was an affordable "faster horse." And he delivered. </p><p>But like a lot of complicated visionaries, he wanted to control his vision completely. Sloan, on the other hand, scrutinized the market and how GM could serve it. Ford had taken the risks; GM would profit from them.</p><p>Now GM CEO Mary Barra - the most impressive leader the company has had since Sloan - is preparing to turn Tesla into the 21st century's Ford.</p><p>Again, Tesla doesn't vanish under this scenario, just as Ford didn't vanish in the 1950s. But Tesla is far from dominant. It occupies a position in the middle of the US market - assuming it can improve its ability to build cars at scale.</p><p>Production at scale is what matters in the car business. The major players are exceptionally good at it. Tesla isn't. And while Tesla is far better at crafting a compelling story than GM or Toyota or Volkswagen, narratives only go so far when facing down the immense task of designing and building millions of vehicles all over the world.</p><p>This also applies when entering new lines of business. In the past two years, GM has put the pedal to the metal on everything Tesla pioneered and is now well ahead of the Palo Alto upstart on everything except Tesla's core business, luxury EVs that sell for $100,000.</p><h2>Tesla can't keep up</h2><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>GM</span></p><p class="caption">Not steering wheel in GM Cruise's Level 5 AV.</p></div><p></p></div></div></p><p>Last week, GM's Cruise division pulled the cover off a fully autonomous, all-electric vehicle that can handle the intricate urban environment of San Francisco; the car has no steering wheel and requires no human driver, making it the first <a href="http://www.businessinsider.com/gm-cruise-fully-autonomous-electric-car-no-steering-wheel-2018-1">commercial application of a Level 5 self-driving car</a>, if GM can get government approval to operate it in a ride-hailing system.</p><p>Tesla's Autopilot is currently state-of-the-art for semi-autonomous driving, but it's a Level 2 system. And while as with GM's vehicles, Autopilot is built into Tesla's cars (rather than bolted on later), it's nowhere near fully autonomous capability, despite the network effects that it enjoys as thousands of Autopiloting Teslas ply the roadways and gather data.</p><p>GM is also beating Tesla on mass-market EVs. As CEO Elon Musk and his team struggle to get the Model 3 sedan on track after a dismal start, GM's Chevy Bolt has racked up steadily increasing sales since its debut in 2016. By the time the Model 3 shows up in serious numbers, GM will be preparing a mid-cycle refresh of the Bolt and will be on its way to introducing 20 new electric cars by 2023.</p><p>Tesla has grand ambitions - a semi, a pickup, a smaller SUV, and a new sports car are all on the schedule - but with just one factory, there's no way it can keep up with a manufacturing giant like GM. As I've argued, GM has always had the <a href="http://www.businessinsider.com/gm-could-put-tesla-out-of-business-tomorrow-if-it-wanted-2015-1">ability to put Tesla out of business</a>, it just didn't see the point. There's still no point in making Tesla vanish - the traditional auto industry is actually rooting for Tesla to succeed - but GM is no longer going to stand around and let Tesla capture new markets uncontested. </p><h2>Being nimble isn't always an advantage</h2><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Getty Images</span></p><p class="caption">Henry Ford.</p></div><p></p></div></div></p><p>For Tesla, it won't be 2009 all over again. The company's core business of luxury EVs is sustainable and could be extremely profitable. It doesn't have to create new vehicles that it will struggle to build in the millions and sell for a low margin. The Model 3 looks more like a $50,000 car than a $35,000 car, and maybe it should be a lower-volume $50,000 car - with 15-20% profits. </p><p>Tesla is nimble and creative and always hustling, and if you can find a more charismatic leader than Musk, please tell me. </p><p>But when it comes to cars, being nimble isn't much of an advantage. This is true whether the cars run on gas or electricity, have steering wheels or don't. The automobile is the product of an industrial process. Modern communications technology - the core business of Silicon Valley - can be incorporated into cars, but if you can't get the wheels and windows and bumpers on, you've got nothing to sell.</p><p>Just as Ford was great at innovation in manufacturing, Tesla has been great at innovation in batteries, drivetrains, and software. It created the modern electric car, made it a sales success, and has pushed hard to be a player in self-driving tech. But it's about to see its first-mover advantage disappear.</p><p>Let's be clear: this doesn't mean lights out for Tesla - far from it. But it does mean that the company will face a new reality, captivating the world while becoming, at a practical level, just another automaker.</p> <p class="tagline">Get the latest Ford stock price<a href="http://markets.businessinsider.com/stock/f-Quote"> <strong>here.</strong></a></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/elon-musk-tesla-semi-truck-electric-18-wheeler-rig-tech-driving-road-2017-11">Watch Elon Musk show off Tesla's first electric semi - which can go from 0-60 mph in five seconds</a></h3>        <div>                    </div>    </div>

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