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GM'S MAVEN CAR-SHARING SERVICE TARGETS MILLENNIALS: GM's Maven car sharing service, which launched early last year, has found some modest success among urban millennials, with 80% of its users falling between the ages of 18 and 34. That's according to comments from Julia Steyn, Maven's vice president of mobility, in a recent interview with Business Insider. The service is still very young, with only around 75,000 users in 17 North American cities. However, GM hopes to expand the service to become its answer to the major disruption in car ownership rates that is anticipated in the coming decades with the advent of autonomous vehicles.
That disruption in car ownership is already beginning in urban areas, with car sales declining in major cities, according to Steyn. That is being driven by accelerating urbanization, particularly among younger generations, and the advent of on-demand rides provided by services like Uber and Lyft.
- A Reuters survey released earlier this year found that 9% of the 584 US respondents who had sold their car in the previous year had not replaced their vehicle with a new one, and instead used ride-hailing services as their primary means of transportation.
- Additionally, 9% of 566 US respondents who planned to get rid of their car in the year said they will use ride-hailing services instead of buying a new car.
Even though more people are choosing on-demand ride services over buying a new car, it will take a long time for declining car ownership to really hit the auto industry. That's because the average length of car ownership has been increasing - it hit a record of 6.6 years at the end of 2015, according to research firm IHS Markit. That means that about 15% of the car-owning population is trading in a car each year. If only 9% of those are choosing ride-hailing over buying a new car, as Reuters survey suggests, then about 1% of the population has ditched their cars for ride-hailing in the past year. That longer car ownership rate is being driven by higher-quality vehicles that last longer. Since consumers are holding on to their cars longer, it would be long even by optimistic projections for on-demand mobility services to become the chief transportation mode in the US.
Automakers, including GM, are responding to this early trend by exploring services centered around car-sharing, ride-hailing, and delivery. However, that is leading to increasing competition in these areas. At this stage, Maven still has far less users than Daimler's and BMW's older Car2Go and DriveNow car-sharing services, which boast 2.7 million and 1 million, respectively. And all of these car-sharing services are dwarfed by the largest ride-hailing services, including Uber, Lyft, and China's Didi Chuxing. Once they put self-driving cars on the road, more automakers will likely launch ride-hailing services that will compete directly with these giants.
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FORD AND DOMINO'S PARTNER ON DELIVERY TESTS WITH SELF-DRIVING VEHICLES: Ford and Domino's are testing delivering pizzas with self-driving Ford Fusions in Ann Arbor, Michigan, Tech Crunch reports.
The tests aim to illustrate how customers will react to and interact with autonomous vehicles. Domino's customers will be randomly selected to participate in the test, and then can opt in to have their pizza delivered by one of the autonomous vehicles. The delivery vehicles will transport the pizzas in individual containers that customers can unlock with a code sent to their smartphones.
Ford plans to incorporate any insights from the test into its autonomous vehicle development, as it plans to launch a commercial delivery service using self-driving vehicles in the coming years. The tests with Domino's should help Ford figure out ways to improve the delivery experience for customers through new design features and functionality.
Ford has stated that it plans to put an autonomous vehicle on the road by 2021, with the goal of building out fleets of autonomous ride-hailing and delivery vehicles. Its research team at Greenfield Labs in Palo Alto is working on how to redesign self-driving cars for these use cases. With no need for a driver, seats, or an instrument panel, self-driving delivery vehicles could actually be smaller and still have more room for packages. That will also lead to radical changes in the exterior design of the car. For example, Einride, a Swedish startup, unveiled a new concept for an electric autonomous long-haul truck earlier this year that featured a unique aerodynamic design with no seats or windows.
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AMAZON GIVES LOGISTICS TRACKING SOFTWARE MARKET A BOOST: Amazon's free, two-day Prime shipping program is driving higher interest in companies that provide software platforms for tracking goods in-transit, The Wall Street Journal reports. Amazon has turned fast and free shipping into a competitive advantage, and other retailers, suppliers, and logistics companies are moving quickly to catch up.
Asset tracking software platforms can help these companies improve delivery times by providing real-time location data about shipments, and alerting companies to possible delays caused by weather or traffic. That has led to increased interest and funding in companies offering these platforms:
- Convey, a startup that specializes in tracking last-mile deliveries, closed $8.25 million in Series B funding this week led by Techstars Venture Capital Fund. Convey's software is used by Walmart's Jet.com, and the company plans to use the funding to build out its offerings for international supply chains.
- Earlier this month, supply chain software firm Descartes Systems Group acquired MacroPoint LLC, which provides a platform for tracking long haul and medium haul trucking shipments. This will help Descartes build out its tracking software portfolio, which already offered solutions for tracking air and ocean freight.
- Target also acquired Grand Junction, which provides a platform for tracking and managing last-mile deliveries, earlier this month to expand a same-day delivery test it had been running in New York City to other markets.
The retail industry shifts towards same-day and time-window (within one or two hours) deliveries will only increase retailers' focus on tracking goods and tightening their supply chains. For example, Walmart introduced new penalties last month on suppliers that failed to deliver goods on time. This trend will make real-time visibility into shipments a competitive advantage for retailers' suppliers and logistics partners, increasing adoption of technologies that can provide such visibility.
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In other news...
- China-based DJI, the world's largest drone manufacturer, overhauled its data security and privacy practices after it discovered a third-party developer was collecting customers' private information. The data privacy issue arose from a third-party extension, called JPush, to DJI apps that provided app notifications to users when their drone footage was successfully uploaded to DJI's SkyPixel sharing service. DJI discovered that the extension was collecting unnecessary user information, including what other apps users had installed on their phones, without any disclosure. DJI said that it has now blocked the extension, and is reviewing other plugins for its apps for any similar data collection problems. It also started a bug bounty program that offers between $100 to $30,000 for the discovery of any bugs in the company's software. DJI clearly hopes these moves will help demonstrate that it's serious about protecting customers' information to help defend its leading position in both the consumer and commercial drone markets.
- Skydio, a three-year-old drone manufacturing startup, raised $40 million in Series B funding. The company aims to build a technologically advanced drone that can fly itself with the help of artificial intelligence (AI), but has yet to unveil its first model. Its early prototypes leverage cameras and computer vision technology to avoid obstacles and track their environment. The drone manufacturing market is dominated by DJI, which controls 50% of the entire North American drone market. DJI's scale has allowed it to slash prices and invest heavily in research and development, which has helped it keep competitors at bay. However, drones remain a niche product right now, and drones that are easier to fly thanks to better autonomous capabilities could open up the market to new consumers.
- Toyota and Mazda are working together to develop a Linux-based connected car platform, dubbed Entune, that could provide navigation and infotainment apps. Entune's core apps include Bing search, Pandora, iHeartRado, and restaurant booking service OpenTable, as well as Toyota's own app for news and weather updates. Toyota and Mazda reportedly decided to team up on this effort because of a lack of software developers in Japan focused on connected car services. The platform will eventually come to the US in Toyota's 2018 Camry, and will then compete with Google's Android Auto and Apple's CarPlay connected car platforms. However, Apple's and Google's platforms are well embedded in the US auto industry at this point, as the two tech giants have each scored partnerships with several automakers to put their platforms in dozens of vehicle models.