Welcome to Transportation & Logistics Briefing, a new
morning email providing the latest news, data, and insight on how
digital technology is disrupting transportation and delivery,
produced by BI Intelligence.


Get the free Top 5 Disruptive Trends Shaping Transportation &
Logistics report and start receiving our brand new Transportation
& Logistics newsletter.

Have feedback? We’d like to hear from you. Write me
at: jcamhi@businessinsider.com.


AUDI SHOWS OFF ITS SELF-DRIVING PROWESS: Audi
demonstrated its new 2019 A8, its first vehicle with
Level 3 Autonomy
, at the Frankfurt Motor Show this week,
moving ahead of many competitors in the self-driving car race,
Reuters reports. The automaker’s semi-autonomous Traffic Jam
Pilot system will allow the A8, which was first introduced this
past July, to drive itself in certain situations.

By enabling the driver to take their hands off the wheel,
the Traffic Jam Pilot system will move Audi ahead of other
automakers, like Tesla, that have implemented Level 2 Autonomy
systems.
 Such Level 2 systems assist the driver
with steering and adjusting speeds, but still require the driver
to keep their hands on the wheel. Level 3 means the car’s systems
can navigate on their own with no help from the driver in certain
circumstances.  No other automaker has yet put a Level
3 Autonomy system into market production anywhere in the world,

according to
CNET. For now, the system is constrained to
driving on highways at speeds under 37 mph, confining it to
highway traffic jam situations only. However, the system will
allow drivers to take their hands off the wheel in such
situations, according to Audi. Should something go wrong, the car
beeps at the driver to take control. The carmaker said that it
would assume any liability for accidents that occur when the
system is engaged and the driver is not in control.

Audi officials also
said
that it plans to quickly enhance the system’s
ability to handle a vehicle at higher speeds,
with
a target of achieving speeds of 81 mph in the “near- or
medium-term.” The challenge with accomplishing such speeds seems
software-related, as one Audi executive said that its sensor and
hardware components are already capable of higher speeds.

However, Audi could face an uphill battle in convincing
regulators around the world to approve its system.
Since
it is the first automaker to commercially launch a Level 3
Autonomy system, Audi will have to gain the blessing of
regulators one-by-one in each individual market where it plans to
sell the A8. The automaker plans to start that effort in its
native Germany, which passed a law in May that legalizes
self-driving cars as long as there is a driver sitting behind the
wheel. German politicians have also been pushing the EU to adopt
common self-driving car standards, and are in talks with
officials from France and Luxembourg about setting up a common
testing ground for self-driving vehicles.

In the US, Audi’s system may not comply with certain
states’ self-driving car regulations.
For example, New
York requires that a driver have at least one hand on the wheel
at all times in any semi-autonomous vehicle. Legislation recently
passed by the US House of Representatives would sweep away these
state-level rules though, replacing them with guidelines recently
released by the Department of Transportation (DoT). The
guidelines include best practices around Level 3 Autonomy, such
as monitoring the driver’s engagement while the car is driving
itself, indicating that the DoT would likely approve Level 3
Autonomy systems that meet those best practices if the House’s
bill becomes law.



all vehicle shipments forecast 1

BI
Intelligence

MORE CONSUMERS GAINING EXPOSURE TO SELF-DRIVING
CARS: 
US consumers are much more open to buying or
riding in self-driving cars after taking a test ride,
according to a new
survey
from consultancy AlixPartners. Although 49% of the
1500 respondents to the survey said they don’t feel confident in
autonomous vehicles ability to handle the roads, 29% of consumers
say they’d be willing to consider buying an AV and to pay an
incremental $2,600 on average for the features.

Those that had already ridden in a vehicle with some
semi-autonomous capabilities were much more likely to feel
confident about self-driving cars.
Forty-nine percent of
the respondents who had experience in semi-autonomous cars were
“confident” or “very confident” in the cars’ ability to navigate
roads. That’s compared to just 26% for those who had no such
experience. One explanation could be that experience with
autonomous features will lead to greater consumer confidence in
the technology. For context, 18% of respondents said they’d
already experienced a car with semi-autonomous features, up from
only 3% of respondents in last year’s survey. 

Safety related malfunctions and cyber security concerns
were the top fears among the survey’s respondents.

Eighty-four percent of respondents said they were concerned the
vehicles’ software would malfunction, while 80% said they were
concerned about a hardware malfunction. Seventy-seven percent of
respondents said they were concerned about an autonomous vehicle
being hacked, and 75% said they were concerned about having their
personal data stolen from an autonomous car. Increased
testing and development of autonomous features may help to defray
some of these concerns.

Enjoy reading this
briefing?

 
 
 
Sign up and receive
Transportation & Logistics Briefing to your inbox.

PRIVACY TOPS RISKS FOR COMMERCIAL DRONE
OPERATORS:
Legal ramifications associated with potential
privacy violations is by far the top concern among enterprise
risk managers in regards to the use of commercial drones,
according to a
survey
earlier this month by Munich Re, the world’s
largest reinsurer. 

  • Of the 100 risk managers surveyed for the study, 61%
    said they were concerned about the potential for invasions of
    privacy by commercial drones,
    leading to possible
    lawsuits and regulatory action.
  • Inadequate insurance coverage for drone operations and
    personal injury lawsuits stemming from drone accidents were the
    next top concerns, each cited by 15% of respondents.

    Lawsuits over property damaged by drones were also cited by 9%
    of the respondents.

Privacy concerns were more common among risk
managers because there is little precedent for how courts
may decide privacy cases involving drones, or what kinds of fines
and damages they may levy for violations
, Jason Dunn,
AVP of strategic products at Munich Re, told BI Intelligence
recently. Companies flying drones armed with cameras in close
proximity to people and their homes could raise multiple risks.
Individuals or businesses could potentially bring lawsuits
against companies flying drones over their property. Law
enforcement officials may also try to press companies to provide
footage relevant to criminal investigations, which could open
companies up to legal action. Such cases could become frequent as
more companies start flying drones closer to major population
centers, Dunn noted. 

The federal government also has yet to release any
concrete regulations around commercial drones and
privacy.
The
Electronic Privacy Information Center
(EPIC) sued the FAA
last year for not doing enough to provide clear guidance on this
topic. The National Telecommunications and Information
Administration (NTIA)
released
guidelines around drones and privacy last year, but
they are completely voluntary and unenforceable.

Despite these significant privacy issues, the majority of
respondents (62%) to Munich’s survey expected drone use by
businesses to become commonplace within the next five years, up
from 37% of respondents to a similar survey in
2015.
 BI Intelligence estimates that annual
enterprise drone shipments will top 800,000 in 2021, up from
about 100,000 last year. Companies launching drones will need to
pay close attention to state laws regarding drone privacy, such
as those
passed
by California and Texas, when operating in their
jurisdictions. They would also do well to formulate an official
policy for handling sensitive data collected by drones that is in
line with the NTIA’s
recommendations
.

In other news…

  • Alphabet’s Waymo will use Intel microprocessors to
    power its self-driving cars,
    Intel CEO Brian Krzanich
    revealed in a blog
    post
    earlier this week. The chip designing giant also
    revealed that its been supplying processors for Alphabet’s
    autonomous vehicles since the inception of Google’s
    self-driving car testing program back in 2009, well before the
    company spun it out into a separate, standalone company late
    last year. The deal could give Intel a leg up on Nvidia, a
    rival chip designer that’s also betting big on the self-driving
    car market. Nvidia has deals in place to supply chips to
    numerous automakers, including Volvo, Audi, and Toyota.
  • Legacy automotive supplier Bosch
    struck
    a new partnership with Utah-based startup Nikola
    Motors to build two hydrogen-electric powered semi-trucks by
    2021.
    The trucks will contain powertrains built by
    Bosch, and hydrogen-electric fuel cells supplied by Nikola. The
    firms didn’t specify whether these vehicles would have
    self-driving capabilities, but given that Bosch has been
    testing self-driving car technologies in cars in California for
    the last few years, it’s possible these technologies may be
    built into the trucks. The companies will take on Alphabet’s
    Waymo, Tesla, Uber, Daimler, and a handful of startups in
    eyeing the increasingly crowded electric semi-truck space.