Q&A on California’s AB 5 and how Uber and Lyft will be impacted, Saudi Arabia drone airstrike escalates oil tensions

A landmark law that would make many gig economy workers employees was approved by the state senate late Tuesday night in California, after months of tension between labor groups, on-demand mobile app companies like Uber and Lyft, and workers’ rights advocates. After endorsing Assembly Bill 5 on Labor Day, Governor Gavin Newsom is expected to be signing the bill into law very soon. If so, the measure will go into effect on Jan. 1, 2020.

Experts say AB5 has the potential to curb labor violations, increase employee bargaining power, and fundamentally alter California’s booming gig economy. US Senator and presidential candidate Bernie Sanders has introduced a similar bill in Washington (Workplace Democracy Act), and other states are expected to launch copycat bills in their legislatures. Labor unions could be brought in, or some other entities representing groups of workers for collective bargaining and enforcing the new law (such as new groups including Gig Workers Rising.) It was first introduced in December by Democratic Assembly member Lorena Gonzalez Fletcher, and since then the bill has gone through several iterations.

The state wants to stop losing tax revenue — which is another part of how it came to be. California’s Department of Industrial Relations estimates that the state loses about $7 billion a year in payroll taxes due to company misclassification.

What companies will be most affected by it?

Under AB 5, close to one million ride-hailing workers, on-demand delivery drivers, manicurists, and janitors in California will be eligible for the same benefits, minimum wage, and vacation days that full employees are. The final version of the bill includes exclusions for certain industries: lawyers, architects, realtors, hairstylists, fishermen, and freelance writers and editors. That’s based on their jobs not being subject to the law because their industries allow them to negotiate.

The companies most affected will be app-based on-demand mobility companies — in California its made up of about 400,000 people driving for Uber and Lyft, delivering meals for Postmates and DoorDash and groceries for Instacart, other competitors in mobile app services, and for those fulfilling specialized services such as Task Rabbit. A few of these companies, led by Uber and Lyft, say that the law will provide an existential threat to their continued existence. Barclays estimates that Uber’s annual operating costs in California will grow by more than $500 million, and Lyft’s will grow by $290 million.

Trucking firms are quite concerned about AB 5 impacting their profits, as working with independent contractor truck drivers has been common in the industry for years. The bill was opposed by the California Trucking Association through the argument that one of the laws’s standards would make it difficult, if not impossible, to continue using independent contractors. In more recent years, startup firms have been using Uber’s model with a software platform that can bring together drivers with trucking companies for freight-hauling trips.

Who will be representing drivers?

That’s one of the leading questions for those impacted by AB 5. Labor unions are mentioned frequently, but there will be other entities representing drivers and other workers affected by AB 5. New groups are being organized to represent independent contractors under the new law, but there are a few experienced law firms that have been representing gig economy workers in recent years.

One likely scenario is that the first version of collective bargaining will start with lawyers filing for labor arbitration hearings and class-action lawsuits in California courts. Attorney Shannon Liss-Riordan is well known for filing for arbitration, and class-action suits, against Uber and other mobility companies, seeking fair pay for drivers and classifying them as employees. There are several other large law firms in California that have negotiated settlements for independent contractors working for Uber, Lyft, DoorDash, Postmates, and other gig economy firms.

The first suit has already been filed — on Wednesday afternoon when an Antioch, Calif.-based Uber driver filed a proposed class-action case against Uber Technologies, Inc., for misclassifying her and other California drivers as independent contractors rather than employees. Filed in the US District Court for the Northern District of California, the case cites AB 5.

Where did all of it start?

A 2005 lawsuit in California paved the way for AB 5. In 2018, the California Supreme Court ruled in favor of workers in the case Dynamex Operations West v. Superior Court. Dynamex is a nationwide same-day courier and delivery service that offers on-demand pickup and delivery services. Prior to 2004, Dynamex classified its California drivers as employees. Starting in 2004, the company converted all of its drivers to independent contractors as a cost savings measure.

The 2018 ruling essentially created the “ABC test” as precedent, but it only relates to workers seeking minimum wages and overtime pay. Under the test, a worker is only an independent contractor if they meet all three parts:

> The worker is free from the control and direction of the company in relation to the performance of the work, both under the contract and in fact;

> The worker performs work that is outside the usual course of the hirer’s business;

> The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hirer.

Another way of saying it is that if the worker is performing a task that’s central to the company’s functioning, and if their wages are set by the company, they’re more likely to be considered employees.

What do Uber and Lyft think?

Uber and Lyft are dismissing AB 5, and say it will remain business as usual on how drivers are paid. They know that many pleas will be made to reclassify drivers, but they say they’ll be able to pass the new test and their drivers will remain independent contractors. But they and several other mobile app companies fought hard against the bill passing.

Fares will have to go up to cover these additional costs for these two publicly traded companies that have struggled to become profitable. One analyst estimates that 25 percent fare increases in California will be a necessity. That will take some of the edge away from competing with taxis, livery companies, limousine operators, shuttle services, and other transportation providers. But it will still be much lower, with Uber and Lyft typically described as being half the cost of other transportation modes.

Uber, Lyft, and DoorDash have all contributed $30 million each into a fund for a 2020 California ballot proposal that would counteract AB 5. The proposal hasn’t been written yet, and it’s expected to include some concessions to labor such as a guaranteed wage floor if drivers aren’t classified as employees.

What do drivers think?

Uber and Lyft drivers have had their share of work stoppages and public protests calling for fair pay, and sometimes for reclassification as employees. A lot of drivers, however, would like things to stay the same. They may not be making the kind of income they need long term, but they do appreciate the opportunity to quickly bring in decent earnings under flexible conditions.

Unlike other on-demand jobs that require scheduling, Uber and Lyft drivers can set their own hours. They can sign in and out of the app at will to take care of personal business and get some time off to relax and have a meal. Other mobile apps offer some flexibility, and drivers are allowed to set their own weekly schedules during a set time, on a first-come, first-served model.

Yet no matter how often the argument is made about freedom over strict work hours, drivers are feeling the squeeze. They’re typically given generous incentives for joining the networks, getting five-star customer ratings, bringing in their friends as drivers, and working long hours. But that eventually fades away when per trip earnings are cut back as the companies cite pressure to reduce their costs. Drivers have to find the best, peak demand hours to work where they will get rides and deliveries, and earn decent pay. They also face the ominous threat of being “deactivated,” which would mean being fired if they were employees, without warning.

The inconsistency in the work and pay can be very frustrating. There’s nothing worse than scheduling a block of hours, and then to sit there looking at your smartphone for long periods wondering when the trips will begin. Near the end of the shift, downtime could be dragging on when suddenly another ride or order is offered to you that will take an extra hour after the end time to fulfill, and may conflict with personal plans. 

Drivers do value the flexibility in meeting their goals, but the advantage always goes to drivers willing to work long hours. The new law could push Uber and Lyft to give preference to the workers who can and do work full-time hours in California, says Robert Maxim, a research associate for the Brookings Institute’s Metropolitan Policy Program.

Which labor unions could be representing these workers?

This is a gray area, as most drivers in passenger trips and freight hauling don’t have union membership. Labor unions have progressively lost membership since the 1980s, and are taking on battles as much as they can such as the UAW announcing a nationwide strike after negotiations with GM stalled. Here are a few unions that could be involved in representing California workers under AB 5………..

> Teamsters has 1.3 million members, representing heavy-duty truck freight hauler drivers and over 200,000 UPS drivers. Independent truck drivers may want to join up with them.

> Service Employees International Union (SEIU) disputed reports of a backroom deal made with Uber and Lyft executives, saying that the union supports AB 5 and full employee status for drivers. SEIU is known for its 1.9 million members in hospitals, home care, and nursing homes; public services (such as city and county workers); and property services (janitors and cleaners). With AB 5 addressing janitors and cleaners, SEIU will likely be involved in contract negotiations for these workers.

> Transport Workers Union of America represents more than 150,000 members across the airline, railroad, transit, universities, utilities, and services sectors. They’re not likely to be involved and see most of their membership on the east coast.

As mentioned earlier, new entities such as Gig Workers Rising are being created to take advantage of the opportunity to collectively organize for independent contractors.

A few interesting news briefs:

  • Yemen’s Iranian-backed Houthi rebels hit major Saudi Arabian oil installations during a drone airstrike early Saturday. The Khurais oilfield operated by Saudi Aramco, the state-owned oil giant, and the Abqaiq oil processing facility, were struck by a number of drones that caused fires at the plants. Saudi Arabia shut down half its oil production Saturday, which is expected to impact almost 5.7 million barrels of crude production a day, about 5% of the world’s daily oil production; and up to 70 percent of the country’s crude output. The government said the attacks also led to a halt in gas production that will reduce the supply of ethane and natural gas liquids by 50 percent. Saudi Aramco CEO Amin Nasser said nobody was hurt in the attacks and emergency crews contained the fires. Secretary of State Mike Pompeo blamed Iran for ordering the attack, in tweets on Saturday, while Iran said it had nothing to do with the bombing. President Donald Trump later tweeted that the US has “reason to believe that we know” who is responsible for the attack and the country is “locked and loaded depending on verification.” Houthi rebels in Yemen have claimed responsibility for the attacks, and said 10 drones had targeted the oil installations; reports are coming out that the attack may also have been caused by cruise missiles. The US secretary of state and presidents’ remarks came amid rising tensions between Washington and Tehran after President Trump’s decision last year to pull the U.S. out of the Iran nuclear deal.
  • The Frankfurt Motor Show continues to showcase electric vehicle launches as European automakers invest tens of billions into their new lineups to comply with stricter emissions rules and expected growing demand. Volkswagen, Porsche and Mercedes-Benz unveiled electric models that will be heading to dealerships soon. VW’s ID.3, the first model from its new MEB product line, and Porsche’s high-performance Taycan electric sports car, grabbed much of the attention. Pressure is mounting on automakers to go green. On Saturday, thousands of protesters marched in front of the car show to demand a swift end to internal combustion engines and a shift to clean vehicles.
  • For fans of the HBO series, “Game of Thrones,” Henrik Fisker is in a good position to showcase his upcoming all-electric SUV. Nikolaj Coster-Waldau, who played Jaime Lannister on the recently completed popular TV series, has been a United Nations Goodwill Ambassador for climate change and other social issues. Now he’ll be serving as a partner and sustainability adviser to Fisker Inc. chairman and CEO Fisker in working toward a future with advanced, affordable, electric mobility. It will be a good fit in helping the UN meet as many sustainability goals as possible, the company said. Fisker Inc. will unveil its electric SUV at the end of this year. The company said it will offer a range of approximately 275 to 300 miles per charge.
    German auto supplier Bosch said it has earned about 13 billion euros ($14.5 billion) since the beginning of 2018 through “electromobility” orders. That product lineup includes software, production projects for electrical powertrains, automated valet parking, and other projects focused on making mobility more automated, connected, and personallzed.
  • Volvo Group North America became the first trucking OEM to join the US Department of Energy’s Better Plant Supply Chain Initiative. The company recruited eight Volvo Group vendors to commit to reducing energy consumption by 25 percent over 10 years. The federal agency said that 85 percent of US energy consumption is a result of the industrial supply chain, a majority of which is comprised of small- to medium-sized manufacturing companies.

Welcome to 2019, and what to look for in clean transportation and mobility

All-new electrified models:

  • Audi joined the electric vehicle race with the Audi e-tron crossover SUV, its first all-electric production model. The e-tron gets over 200 miles per charge and shows of a luxury design and has all-wheel drive performance.
  • The Jaguar I-Pace was launched, with a sporty design and luxury appointments, and a 240-mile all-electric driving range.
  • The Porsche Cayenne E-Hybrid is an all-new version of the plug-in hybrid model. It’a powered by a 3.0-liter gas engine and a 136 hp electric motor.
  • The Range Rover P400e is a plug-in hybrid variant of the Range Rover SUV. It comes with a 2.0-liter gas engine and a 114 hp electric motor.
  • The Hyundai Kona is now available in an all-electric variant that delivers 258 miles of range.
  • The Mitsubishi Outlander PHEV finally made it to America. The full-size SUV runs off of a 2.0-liter gas engine and two electric motors, plus greater efficiency and AWD.
  • The all-new Volvo XC40 compact SUV, the first model built on Volvo’s Compact Modular Architecture (CMA), features an efficient four-cylinder Drive-E powertrain.
  • Toyota has changes to its hybrid lineup. The Avalon Hybrid is longer and lower and higher mpg, with its 2.5-liter four-cylinder engine and all-new Toyota Hybrid System II powertrain. The all-new Lexus ES 300h comes with a fourth-generation hybrid system delivering a class-leading 44 combined mpg. The Lexus UX entry-level luxury model now comes in the UX 250h hybrid version.
  • The Honda Insight comes in its third-generation version with an advanced two-motor hybrid system that delivers an EPA estimated 55 highway mpg.
  • Kia and Hyundai will launch electric crossovers in 2019, named the Niro and Kona respectively. Hyundai also has a new fuel cell vehicle, the Nexo, available in regions where it can access hydrogen filling stations.
  • On the commercial vehicle and fleet side, Workhorse Group has closed a financing round of $35 million with Marathon Asset Management, with $25 million being a revolving credit line to meeting existing and future purchase orders of its electric trucks.
  • Daimler Trucks is leading a $155-million investment round in electric bus maker Proterra; with Tao Capital Partners, a San Francisco investment firm, as the other lead investor. Daimler sees a growing market for electric buses as public transit districts and school systems in the U.S. and around the world move to reduce emissions. Proterra and Daimler also have an agreement to explore the electrification of a few Daimler heavy-duty vehicles.

Plug-in vehicle sales:  Finalized plug-in vehicle sales figures will be coming out in the next few days for December and all of 2018; but so far, it was clearly a year of record-setting plug-in hybrid and battery electric vehicles sales in the U.S. Through November, U.S. sales were at 312,887 for plug-in vehicles, compared to 194,479 for all of 2017, according to Electric Drive Transportation Association. Assuming 350,000 units will be sold in 2018, the increase would be about 55% over the previous year. InsideEVs estimates the Tesla Model 3 closed the month with 25,250 sold in the U.S. That compares to 18,650 sold in November. Lately, there’s been a wide gap between the Model 3 and every other plug-in vehicle sold in the U.S., with top sellers like the Tesla Model S and Model X, Chevrolet Bolt and Volt, and Toyota Prius Prime, each hovering somewhere around 3,000 units sold per month. The Nissan Leaf was able to see its first sales increase in a long time.

Mobility going mainstream:  Mobility services like ride-sharing and car-sharing are moving beyond initial excitement by early adopters and over to the mainstream. The Mobility Revolution: A Primer for Fleet Managers, explores four trends that are shaping the near-term future of vehicles and transportation — connected, electric, shared, and autonomous vehicles. The study was sponsored by NAFA Foundation as a tool for fleet professionals to prepare for the near future. The pressure is on for fleet managers and operators to reduce fuel consumption and carbon emissions, make their fleets safer, and to try out connected, automated systems for these goals and cost containment. The paper delves into ways that fleets are already testing and exploring these changing technologies and methods, featuring a few successful case studies. Another watershed moment in this new year will be seeing ride-hailing company Lyft beat much-larger rival Uber in filing for an initial public offering. Lyft has been valued at about $15 billion, with its IPO slated for the first half of 2019, sources have told Reuters. Uber is expected to pursue an IPO next year that could value it at about $120 billion. Room rental company Airbnb Inc, valued at $31 billion, is also seen listing in 2019.

Autonomous vehicle test projects:  When, oh when, will autonomous vehicles move beyond the testing phase and be given the green light? It’s not clear, but more companies are entering the testing phase in California and others states. Uber is starting to recover from nine months ago when one of its autonomous test vehicles struck and killed a pedestrian in Tempe, Ariz. The return to road testing in Pittsburgh will be at a much smaller scale than the company’s previous program. Another significant event was learning that Alphabet’s Waymo self-driving Chrysler Pacifica plug-in hybrids have been through nearly two dozen attacks from irate locals in the Chandler, Ariz.. Over the past two years, irate locals have expressed frustration with tire slashings and pelting these vehicles with rocks. One local resident made multiple attempts to run Waymo vehicles off the road using his Jeep Wrangler, including driving toward one of the Waymo minivans head-on before turning away. He said it came from a Waymo vehicle nearly hitting his 10-year old son while the boy was playing in a neighborhood cul-de-sac.

The battery war continues:  Battery maker 24M just received $22 million in funding for its SemiSolid lithium-ion battery that would beat Tesla and other automakers in electric vehicle driving range and energy storage. The startup company, made up of Massachusetts Institute of Technology (MIT) scientists and a former A123 Systems co-founder, offers longer driving range, lower battery cost, and faster manufacturing time. The company is also targeting the grid energy storage market, competing with Tesla’s energy storage unit, along with Daimler, BMW, Renault, Nissan, and other automakers. The SemiSolid speeds up the manufacturing process by cutting out a number of steps typically used in EV battery production. It also cuts down the need for materials such as copper, aluminum, and plastics. That will bring down the battery’s costs and the amount of energy needed to charge up the EV batteries.

Renewable energy trends:  Renewable energy went up a point in 2018 — up to 8% of U.S. power generation through the third quarter of 2018. There’s been a lot of concern over America’s trade war with China that includes renewable energy, but demand continues to grow. One study sees growth continuing in 2019, based on emerging policies that support renewable growth; expanding investor interest in the sector; and advancing technologies that boost wind and solar energy’s value to the grid, asset owners, and customers. Growth was driven by declining wind and solar generation costs, improvements in battery storage, and grid operators’ growing experience in integrating intermittent renewable power into the grid. Demand was strong, as well, with voluntary procurement (purchases not driven solely by government incentives) representing 52% of utility-scale solar projects in development and 73% of projects announced in the first half of 2018.

The trade war may change course:  The U.S. and China may be ready to end, or adjust, the trade war started last year by President Donald Trump. A U.S. government delegation will be traveling to Beijing next week to hold trade talks with Chinese officials, according to two people familiar with the matter who spoke with Bloomberg. The Trump administration launching the trade war — which added more than $200 billion worth of imports from China by the third quarter of 2018 — is considered a key factor in destabilizing oil prices last year. It’s also hurting China’s weakening auto sales, which is seeing its first decline in two decades — during a time U.S. auto sales are expected to decline. Tesla’s CEO Elon Musk and other automotive executives were pleased to see China reduce tariffs to 15 percent from 40 percent after that meeting. Tesla was able to lower prices for its Model S, Model X, and Model 3, which are scheduled to be delivered to customers early next year. BMW AG and Daimler AG were able to cut prices on their U.S.-made luxury vehicles, bringing prices down to the level there were at before the extra duty was added last July. Automakers in the U.S. are waiting to see whether Trump will be hitting vehicle imports with tariffs.

Hydrogen fuel cell vehicles and stations:  Hyundai has delivered its first Nexo hydrogen fuel cell SUV in the U.S. market. The 2019 Nexo – which replaces the Tucson Fuel Cell – can go up to 380 miles, starting at $58,300 (including $13,000 on its hydrogen fueling card). It joins the Toyota Mirai and Honda Clarity in the fuel cell vehicle market.
The California Energy Commission and California Air Resources Board released a report in late December with some interesting numbers:

  • Public support and public funding remain necessary to achieve the 100-station goal, and more funding will be needed to support the 200-station goal.
  • The current network of 65 stations (including those still in development) provides enough fuel for the existing FCEV population, but capacity will need to double by 2024 to meet projected FCEV growth.
  • Estimated greenhouse gas emissions reductions from funded stations are nearly 76,000 metric tons of carbon dioxide equivalent per year by 2024.
  • More than 5,000 FCEVs are registered in California as of October 2018, nearly double the number from the previous year.

For Today: Volvo starts Polestar electric brand, Reflecting on Uber CEO leaving

Polestar electric brand:  Volvo Cars just started a high-performance electric car brand, called Polestar. Volvo acquired Polestar Performance in 2015. Polestar Performance had been a business that Volvo hired to jointly develop high-performance versions of its vehicles. The two companies will tap into economies of scale and other resources Volvo offers. Polestar will reveal its business plan this fall. Thomas Ingenlath to be CEO at Polestar. He previously had helped Volvo increase sales of several vehicles including the XC90. Polestar will challenge Tesla and BMW i subbrand as a global brand.

Putting restrictions on influencing biofuels policy:  U.S. Democratic lawmakers have been concerned about the influence of billionaire Carl Icahn, head of oil refiner CVR Energy, on biofuels policy. Members of Congress have sent a letter to Environmental Protection Agency administrator Scott Pruitt asking him to clarify procedures that would prevent Icahn from influencing biofuels policy for personal gain. Icahn would like to see the federal government reconfigure the Renewable Fuels Standards for blending ethanol in gasoline. He’d like to see biofuels producers and blenders take on more of the cost – and that oil refiners and oil companies be relieved of some of the burden.

Uber CEO leaves: There’s been a lot of reflection lately on how Uber CEO Travis Kalanick has left his company, and how the world’s largest ride-hailing company has taken a dive since early 2017. Since starting up in May 2010, Uber invented a new segment of mobility – a business model adopted by Lyft, food delivery companies like Postmates and DoorDash, and dozens of other startups; and that’s put several taxi companies out of business. Uber became the most valuable private company in the world with Kalanick able to bring several venture capital backers onboard. The CEO was known for his aggressive style and for leading a workplace that hasn’t been good for women to work in; or many of the other male executives who’ve left in recent weeks. No matter what happens, the Uber brand name is likely to be carried forward as it’s become the icon of mobility services; maybe by another group of owners.

 

For Today: NRDC and Blue Green Alliance study on jobs in clean vehicles, INRIX surveys drivers on autonomous vehicles

Clean vehicle job creation:  Manufacturing clean vehicles directly supports 288,000 jobs in the U.S. economy, according to a new study released by Natural Resources Defense Council and the Blue Green Alliance. These are manufacturing and engineering jobs at more than 1,200 factories and engineering facilities in 48 states who produce technologies designed to improve vehicle fuel efficiency. Nine of these stats have 10,000 or more workers employed in these jobs, with the five of them – Michigan, Indiana, Ohio, Tennessee, and Kentucky – have plants building cleaner vehicle technologies supporting nearly 160,000 manufacturing jobs.

Tesla going to India?:  Earlier this year, news came out about Tesla getting ready to enter the India market. Going to China has produced very strong sales results for the carmaker, and India has been seeing a growing auto sales market overall. Last week, CEO Elon Musk tweeted that Tesla would not be going to India due to the government’s requirement that 30% of the parts in Tesla cars would have to be sourced within that country. Tesla tends to do things its own way, so it may be holding off on entering the country until that can be worked out; or not entering at all. The electric carmaker recently denied that it will be forging a joint venture with the Chinese government after Musk met with a high-ranking government official. Tesla has wanted to build its own factory in China, and that may not happen if the government requires a joint venture with one of its government-owned companies. Both governments would like to see more electric cars sold locally to hit targets on vehicle emissions.

Rebates from utilities:  Southern California Edison announced yesterday that it’s offering a $450 rebate to customers who own an all-electric or plug-in electric hybrid vehicle. The utility has been receiving state funds coming from California’s Low Carbon Fuel Standard program. Several electric utilities around the country are offering special rate programs for vehicle owners, including time-of-use (TOU) rates, to reduce the cost of powering an electric car or plug-in hybrid. In January, Pacific Gas and Electric Company (PG&E) launched the Clean Fuel Rebate for residential, electric customers who are electric vehicle drivers. It’s one-time $500 rebate for eligible EV owners can receive one rebate per owned or leased EV.

Mobility & Innovation:  INRIX study says consumers trust tech giants more than Uber for autonomous vehicles 
INRIX, a leading provider of traffic information, has released a survey report on what U.S. and European drivers think about the future of autonomous vehicles – and who should be doing it. The survey interviewed 5,054 drivers in the U.S., France, Germany, Italy, and U.K., to find that major automakers and tech giants should lead the way over ridesharing firms or Tesla.

“A new battleground is emerging between automakers, tech companies and ridesharing companies in the race to develop connected and autonomous vehicles,” explained Bob Pishue, senior economist at INRIX. “With hundreds of millions of connected cars expected to be on the roads within the next 15 years, the market share will be owned by companies that can educate drivers and gain consumer trust.”

The U.S. respondents preferred companies like Google and Apple providing self-driving cars., with 1.4 of them preferring tech giants over automakers. For those surveyed in the four European countries 1.5 times prefer major automakers (not including Tesla) over tech giants.

Ridesharing leaders Uber and Lyft had the smallest level of support as makers of autonomous vehicles. Following in a close second in the study is the category of newer carmakers that the study identifies as Tesla and “Fisker Motors.” That could mean the former Fisker Automotive, which is now split off into two companies – Henrik Fisker’s Fisker, Inc. startup and Wanxiang Group’s Karma Automotive.

For current connected car features and upcoming autonomous vehicles, many taking the survey believe that these technologies are bringing in a new era of vehicle safety. In the U.S., blind spot warning is the most desired new car feature; that’s followed by stolen vehicle warning/tracking, night vision, road incident alerts and re-routing, and rear/front collision alerts.

Millennials have less concern over their privacy through over their vehicle data than do Baby Boomers. That generation is also less convinced about how trustworthy autonomous vehicles with ll be, with 73 percent of Baby Boomers reporting in the study that they don’t believe autonomous vehicles will be safer than cars on the road today.

Delivery facing rapid change and growing demand in crowded metro areas

ford-transit-connect-vanDelivery is seeing a fast-changing environment, from packages to food. Delivery vans and small, high mileage cars (especially hybrids) are passing through a paradigm shift in who owns the vehicles and how they’re being used. While the U.S. won’t be switching over to delivery bikes and three-wheelers, commonly used in crowded Asian and European cities with narrow streets, competition for leadership in delivery services is getting fierce.

Some of this drive is coming from Amazon and Google taking on UPS and FedEx. The U.S. Postal Service is undergoing its own change. On the food side, the classic pizza delivery model is being taken over by app-based alternatives like UberEats, Postmates, and GrubHub. Companies entering the space also point to the state of fast-growing cities squeezed with bigger buildings, more cars and pedestrians, and less parking spaces. Delivery companies need to have smaller, nimble, and quick vehicles to meet surging demand. Younger consumers are getting spoiled by services like Uber and Lyft, where you can tap your phone and have a car in front of your place in less than 10 minutes. Older generations are tapping into these convenient services as well, in this new age of the on-demand economy.

Demand for quick delivery is driving change, along with the challenge of driving and parking in crowded city streets. Some of the carriers also support sustainability, removing vehicles from roads and switching over to alternative energy sources for their vehicles. UPS and FedEx have led the way here. Independent contractors delivering restaurant meals and fast food are preferring to drive a Toyota Prius or a small gas-engine car to keep costs contained.

The Ford Transit Connect van (as shown in the photo above) has been a hot commodity for deliveries. The 2017 model has an EPA-estimated rating of 29 highway mpg when equipped with the available 1.6L EcoBoost I-4 engine. It has substantial storage capacity for such a small vehicle – with 103.0 cubic feet of storage capacity designed for easy maneuvering and parking on tight city streets. The Azure electric Transit Connect van left the market in 2012 and doesn’t appear to be coming back. The other increasingly popular model for urban deliveries has been Mercedes-Benz’s Sprinter utility van. The next-gen edition may get an all-electric powertrain, according to the Detroit Bureau. The automaker is designing the vehicles with both batteries and autonomous-driving features; these features will be available as soon as 2018, the publication reported.

The federal postal service, which was originally created in 1775, took on another form in 1971 when it was transformed into the U.S. Postal Service as an agency of the U.S. government. Within that decade, rival carrier UPS would experience substantial growth in the U.S. and overseas and Federal Express had its first profitable years.

A few years back, USPS was outsourcing a lot of its package delivery to UPS. That started to change recently, especially with the promotion of postmaster general Megan Brennan last year. Under Brennan, USPS has ramped up same-day delivery in order to compete with rivals FedEx, UPS, and Amazon for the growing share of packages with tight delivery schedules. During this time, USPS made a deal with Amazon.com to deliver groceries in selected cities for Amazon when the online retailer wasn’t able to meet that demand.

Amazon is investing heavily to compete with UPS and FedEx in same-day deliveries. Amazon is trying out a few new services including Amazon Prime package deliveries and Amazon Fresh food delivery. Amazon Flex and Middle Mile Providers have recently started up in a few U.S. cities. If you ever see a white Ford Transit Connect with an Amazon logo, that van will be delivering goods through one of the new services.

Dave Clark, senior vice president of worldwide operations and customer service for Amazon, commented on Amazon Flex at an industry conference last year. Amazon Flex is an app-based delivery platform that “enables people to be their own bosses while earning $25 or more an hour,” making Amazon Prime Now deliveries, he said. Drivers will use their own car and smartphone, similar to other popular delivery and ride-hailing services on the market. Amazon is usually promoting an offer for customers that includes free two-hour deliveries. The claim of paying drivers up to $25 an hour sounds quite optimistic, since drivers at other mobility services are typically making $10 to $15 an hour.

With Middle Mile Providers, fleet owners with carrier licenses through the U.S. Department of Transportation will be able haul loads for Amazon. Drivers must be employees of the delivery provider and will likely be required to carry commercial driver’s licenses. They need to drive a cargo van or similar vehicle with at least 200 cubic feet of volume. It appears to be in startup phase with job openings listed in Seattle for a division called Middle Mile Logistics Technology.

In June, Amazon launched a British version of its AmazonFresh food delivery service to break into the UK grocery market. AmazonFresh has previously been deployed in a few U.S. markets, too.

UberEats is counting on the food delivery service being worth the investment. Started in test mode about two years ago, it became its own mobile app in the spring of this year. Uber launched food delivery in Chicago, Houston, Los Angeles, and San Francisco earlier this year. The initial launch was in Toronto; other growth markets include Atlanta, Austin, Dallas, Melbourne, New York, Paris, Seattle, and Washington, D.C. After trying it out as part of the Uber experience, the company realized that didn’t make sense, with both of these experiences being separate from each other; they needed their own brand names and separate mobile apps.

Self-employed drivers are asked to gather in select parking lots for UberEats and pickup packaged orders for the day from partner food services. They’ll deliver lunch or dinner to workplaces or homes in the vicinity. That differs from other food delivery services where the driver will be picking up food orders directly from the vendors and delivering them to the customers.

Food delivery has been taking off like a rocket trajectory over the past year in transactions. Making the business profitable and finding the right financial backing has been tough. Bloomberg reported a story last week about on-demand meal delivery service Caviar’s parent company trying to sell it off and find better partners in food delivery. Payment processing company Square reportedly tried to unload Caviar early this year. Square reportedly had discussions with Uber, Grubhub, and Yelp between late last year and the start of 2016, but disagreements on pricing ended the talks. With Square backing away, startup Caviar is in a tough position in a very competitive market.

UK’s Deliveroo was funded about £250 million ($306 million) earlier this year, and Berlin-based Delivery Hero was rumored to be lining up an IPO, according to VentureBeat. In the U.S. GrubHub, DoorDash, and Postmates have grabbed a lot of attention; Uber and Lyft riders are known for tapping into these delivery services and tend to look for special discount promotions on meals. Private equity funds are coming in for these food delivery companies, but they haven’t been perceived yet as hot commodity investment opportunities like Uber has been able to win over. Postmates is working hard to be seen as unique in the marketplace – the only delivery service out there that will pick up orders from anywhere that the customer requests – a restaurant, donut shop, BevMo! liquor store, grocery store, 7-Eleven, or some other business.

The business model for food delivery companies was borrowed from Uber and Lyft, with a similar mobile app; driving directions and alliances with Waze and Google Maps; it’s all right there on the phone for customers, from ordering to paying; there are special offers with local and chain restaurants, juice bars, coffeehouses, and fast food stores; and all the drivers are independent contractors passing basic vehicle and driving record checks.

Google has been getting ready to take on Amazon Prime for a leading position in fast, on-demand deliveries and has backed away from food delivery. Brian Elliott, general manager of Google Express, told Business Insider that the company plans to spread its coverage from about 20 states and regions to the entire country by the end of the year. To get there, Google Express decided to close down part of its grocery business and stop selling perishables; these were pilot projects started earlier this year in parts of San Francisco and Los Angeles.

Fast delivery is becoming more important for firms to retain their market presence. Amazon was getting a lot more searches and orders placed on a wide variety of products like bottled water and flat screen TVs. Google Express was a way for Google to reinstate itself as the go-to choice for product searches, and to make it easier for people to purchase the goods they’d searched for.

Why Robert Downey Jr. tapped into Tesla’s Elon Musk for “Iron Man” character

Robert Downey Jr in Iron ManWant to grow your market capitalization five times in less than a year, up to $15 billion in market value? Well then, get a celebrity to head your company. Tesla Motors CEO Elon Musk has become an expert at grabbing regular-and-social media attention; whether that be through unveiling the Supercharger fast chargers for the Model S or teasing the public with his Hyperloop transportation concept that can make it from San Francisco to Los Angeles in 45 minutes.

“Iron Man” director Jon Favreau and Elon Musk himself say that Robert Downey Jr. did, in part, base his superhero character Tony Stark on the CEO of Tesla Motors and SpaceX, and a co-founder of PayPal. This character is a true entrepreneur – a big risk taker with a big ego who will bet everything to change the world, according to Rocketboom. Musk heads SpaceX, the first civilian space travel company to link up with the international space station, which took place in May 2012. He’d done very well in taking Tesla public and seeing the stock price skyrocket soon after its first quarter earnings were announced.

Tesla’s market cap recently made it equal to Italy’s Fiat and France’s PSA Peugot Citroen combined, says The Detroit Bureau, and it was added to the Nasdaq 100 stock index. That can certainly change day to day in stock trading; more recently, Tesla stock tumbled 14% after an ominous report from Goldman warning that its stock was overvalued. Tesla’s stock prices had been surging since its first quarter earnings report – and that was the first quarterly profit for the company.

General Motors CEO Dan Akerson has his eye on how well Tesla Motors performs; he thinks it has the potential to be a disruptive force to the automotive industry and he doesn’t want to be caught off guard. Akerson assigned a small team to study Tesla and how it might threaten GM’s business.

A few reasons I think Tesla Motors is seeing Model S sales grow, and that stock prices could stay above $100 a share…

  1. Musk and his staff – including former chief strategist at Apple’s retail stores, George Blankenship – have been highly skilled at going viral with their messaging for a pretty small marketing spend. Musk is addicted to Twitter, and the company is great at teasing the media and their audience with unveiling events.
  2. Tesla showrooms grab your attention. Dealer associations may win in the courtroom, but Tesla is placing enough retail stores in the style of Apple to inspire rabid fans.
  3. Ride and drive events –They’ve been skillfully scheduled and promoted. Once you get behind the wheel of the Model S, it’s easy to get hooked.
  4. They’re very good at utilizing Musk’s looks and charisma in interviews and TV guest appearances. Elon Musk has his fans on Wall Street, along with bloggers and Twitter followers who dig superheroes.
  5. Great product:  Sit in a Model S and check out its double screen dashboard, connectivity and functionality, and feel its powerful torque once you press the pedal, and you’ll be very impressed. Consumer Reports just gave the Model S its highest rating, with 99 out of 100 points.
  6. If the price is too high, check out the funding deals through its “revolutionary” financing package. Guaranteed resale value is also helping close deals.

Stay tuned for more info on fast-as-the-speed-of-light Hyperloop. “Will publish Hyperloop alpha design by Aug 12,” Musk posted on his Twitter page. Musk first mentioned the Hyperloop a year ago at a PandoDaily event in Santa Monica, Calif. – what he called a “fifth mode of transportation” and what he thinks is a cross between a Concorde, a railgun, and an air hockey table. He estimated it would cost about $6 billion to build a San Francisco-to-Los Angeles Hyperloop; that’s only about a tenth the cost of a plan that’s been floating around the state for years for a proposed high speed rail between the two cities. There’s a partnership that he may be developing a working relationship with – a company that could potentially build the Hyperloop to go 4,000 miles per hour. Pretty exciting stuff.

Why driving cars is dropping in popularity in Southern California

traffic in LASouthern California has always been a key bellwether for transportation trends in the US and in the world. The region that had one of the best mass transit systems through the 1940s became the hub of auto sales and traffic congestion starting in the 1950s. Now that trend appears to be changing course.

Automotive News pointed to several key indicators showing that the love affair with the car is fading…

  • Light rail has been expanded 26% in the past eight years with 18 miles more of track coming by 2015. Bike lane networks have doubled to 292 miles. Bus and train ridership is growing – up nearly 5% in May 2013 versus May 2011.
  • Even more significant – the total number of passenger cars has declined in Los Angeles. The market rebounded from the recession, but the 2012 sales numbers were 28,000 less than five years earlier.
  • Consumers have a lot more options that gain their interest away from traditional cars – electric cars, hybrids, bike lanes, light-rail, and car-sharing plans such as Zipcar are on the rise.
  • Toyota and Honda have sold a lot of small-to-midsize cars in this market for several years and are putting a lot of emphasis now on hybrids, natural gas vehicles, and plug-in electric vehicles.
  • Traffic congestion is getting worse – LA had its longest congestion-related delays in the US in April. The average driver wasted 5.2 hours, up from 4.5 hours in April 2012.
  • Sharing rides is gaining in popularity especially with young people, through social circles, and there’s more interest in bus and rail rides and car sharing.