Steven Dietz from Level 4 Fleet Services, Inc.

Welcome to the Puck Venture Capital and Beyond, a show that explores the evolving landscape of the Venture Capital world. We'll have candid conversations with today's VCs and entrepreneurs who are shaping those changes. I'm Jim Beer, managing partner of Behrendtrough and president of CMG Advisors. This podcast brings change makers to the table to discover the inner workings behind decision making strategies and ultimately how they got to where they are today. You know, people say I love my car.

I would never give it up and let a machine drive me around. But I'm sure in 1900, there were people who said they loved their horse, and they would never get in that loud, car to be driven around. This week on the Puck, I have the pleasure of interviewing Steven Dietz, a veteran venture capitalist and one of the foremost investors in the auto sector since 1996. Steven's unique experience investing in the auto industry has made him a leading expert on the topic of self driving cars and is the focus of today's conversation. Welcome, Steven.

Thank you. So you have been a successful venture capitalist for over thirty years. And so, what we'd really like to start with is how did your career get started? And in telling your story, are there particular experiences that you would like to share in terms of memories that were interesting or important to you as you were coming up through the ranks, so to speak? I got started as an investment banker, and I was fortunate that the place that I worked was pretty entrepreneurial.

And the man that I worked for was really passionate about retailing, and that's what I spent all my time with. He and I and one other gentleman who, the three of us were ultimately the partners who created upfront, then called GRP, started investing off the balance sheets of our two respective employers in companies like Costco, Starbucks, PetSmart, Office Depot, Chang, Dick's Sporting Goods. Very early, all of those when they had five Tate stores, we were taking 20 to 25% positions in. And after about ten years being a banker and also doing this, we all really decided it was more fun being on the investing side with these young growing companies than being on the agency side as bankers and determined that's what we wanted to do for the next part of our lives. The entities, Carrefour and DLJ, and one other investor who had previously been a client, all agreed to support us, and we created our first fund in 1996, in January '96.

It was called Global Retail Partners, but when we wrote our memorandum to these investors about what we'd be doing, one of the things we said was that if the Internet's ever adopted broadly, it could change the way goods and services are distributed, and that changing methods of distributing goods and services was our expertise. So we decided we would make investments in the Internet and technology as well. As it turned out, it was a good decision in 1996 and thereafter, and that fund was almost entirely a technology oriented fund, and we exited enough of the companies that it did very well. We exited before the crash in 2000. We raised another fund, and another, and another, and another, and kept on investing predominantly in technology businesses.

My interest in automotive really started in 1991 when I was talking to one of my partners about what other retail categories were left that were very large, and I concluded that automotive had a very inefficient distribution channel, and was also an opportunity for investing and finding a category dominant player. Looked around, found my first investment, got very close on it. I delivered a term sheet, and then the team took that term sheet and shopped it, and another gentleman bought the company and renamed it AutoNation. So I didn't get that deal, although it was clearly on the right track, but I kept on making auto investments. And over the last twenty five years, was probably the largest VC investing in auto up until maybe three years ago when ride sharing and autonomy attracted everybody's interest.

But I developed a lot of relationships by doing it in the industry and that's really been a significant part of why I've been focused now on autonomy. So you're you've moved into this new arena. I know you've started this new company called Level Four, which we'd love to hear a little bit about. And then, how that relates to kind of where the world is going in terms of the self driving cars that we all hear about, but know very little about. Self driving cars, I believe, will be on the road and be utilized much faster and much more broadly than most people think.

I believe adoption happens incredibly rapidly, and it's driven by really one thing, economics. If you look at the adoption rates of other technology, they are increasingly rapid. Smartphones went from zero to 25% share in about five years. The Internet was adopted to 25% penetration in about seven to eight years. Both of those were people figuring out this is something new I need.

In the case of transportation, everybody already knows they need it, and the ability to get it more conveniently at a much lower cost, I think drives adoption very rapidly. And to quantify the lower cost, it's transportation's the third largest budget line item for most households. Costs about $10,000 a year. With autonomous ride sharing, that cost can drop by 50 to 60%, save the average household roughly $5,000 a year. Since we're talking averages, the average household saves about $1,300 a year.

So that 5,000 additional savings is a staggering increase in their disposable income, which averages around $15,000. Another 5,000 changes the world for most families. So I think for low and middle income households in urban and suburban environments, I think adoption happens very rapidly. They have a choice of have to have the money to buy the car in the first place or even a down payment and the commitment to make financing payments and spend twice as much or have none of those obligations turn it into a variable cost, which is half of what you've been paying for the same functionality. I think that's a no brainer for most households.

And all the other considerations of, well, I love my car, I like driving, will be shunted aside in most cases. From the manufacturer's perspective, there'll be a race to capture market share because I think there can only be two or three providers in any given market. And the reason for that is that the consumer is gonna make their decision about what ride share service to use based on only three parameters, cost, speed of service, how fast will my ride get there, and the experience. Experience is a way to differentiate, and I think each of the OEMs have their own different views on what is a great experience in this autonomous vehicle. Cost.

The vehicles will cost what they cost, but cost goes down as density increases. You're spreading the same services over a broader base. You can reduce your cost. And if you have more vehicles in the market, the likelihood that your vehicle can be there to pick up a customer first increases. So having a large, market share gives a competitive advantage in the two of the three places that matters, cost and speed of service.

The OEMs all and TNCs, the transportation network companies like Uber or Lyft, all recognize that. So I think once the vehicles are available, there'll be a very rapid race to capture share in the market. That will be more valuable than entering new markets. Steven, when I look back over the last ten to fifteen years, and I think about how some companies had the ability to adapt and take advantage of changing times such as Netflix with the video rental industry and then their competitors like Blockbuster got left in the dust. I wonder how this phenomenon is applying to the auto industry.

Do you see companies like Uber keeping up with these rapid changes? Well, as of late last year, there were 47 companies that applied in California to test autonomous vehicles on the road, and it had been approved. Wow. In that 47, included in that was every single auto manufacturer and Uber and Lyft, the TNCs. And Didi in China is spending a lot of money in R and D as well.

Uber's, Travis Kalachnick, a long time ago, said that self driving cars are the future, and if we're not part of it, we don't have a place. And they've been one of the earliest largest investors in the r and d to make this happen. So, yeah, they're absolutely looking and saying this is critical. At a higher level, I think if Uber succeeds in developing the technology, they're also gonna have to actually enter the business of manufacturing the vehicles because they're gonna be competing with auto manufacturers. And if cost is a primary component of the consumer's decision of who to select for a ride.

If Uber's getting its fleet at a wholesale price and they're competing with manufacturers who have their fleet at manufacturers cost, that differential is gonna be enough that it will be very difficult for Uber to be competitive. And in this world, the manufacturers who figure out the technology and start deploying will keep their capacity utilized, and those who don't figure out will find they have excess capacity and likely sell it. So I don't think it'll be hard for Uber to buy the manufacturing capacity you'll need, but I think they'll have to go into that business. So when you talk about manufacturing capacity you'll need, but I think they'll have to go into that business. So when you talk about where the world's going with this, there's obviously gonna have to be new infrastructure.

And I know level four is moving into this space as well. Can you share with us some of your ideas in terms of what level four sees as the future and how infrastructure is gonna change as a result of this? Infrastructure is a really broad category and I'll break it down to two. Level four's interest is in what does what do these fleets need to keep them on the road? Those vehicles need to be washed every day.

Somebody has to take the garbage out of them two or three times a day. Unfortunately, people are pigs and leave a lot of things behind in taxis where there's actually a driver in the front seat who sees it when there's no one in it. I think that problem may get worse. Right. And it's not gonna work for the BMW branded ride sharing experience to have dirty tissues in the back seat when it shows up, and then they have to be fueled or charged every night, and they have to go park somewhere at night.

They have to be staged. So those are the things that level four is interested in, and there's other companies that are also looking at that. From a broader infrastructure perspective, autonomous vehicles hospital emergency rooms are gonna change. If you actually had a tremendous amount of transportation provided by autonomous vehicles, there should be a whole lot fewer auto accidents. Why does that matter?

Obviously, it sounds good, but it presents a business reality that emergency rooms are the most profitable part of most hospitals, and the revenue component in the emergency room is auto accidents because they're devastating. So you take the largest part of the most profitable part of hospitals and say, well, that's business is gonna go away. They're gonna have to figure out how they replace those revenues and keep their whole business in place. So a lot of industries change. The autonomous fleets are gonna be self insured.

They're not gonna go to the local insurance agent and get insurance. So the auto insurance business changes dramatically. You know, it's it's fascinating. Whenever I talk to you about this, there are things that I have just never thought about. So for instance, if I'm selling car insurance right now and I'm 30 years old, I mean, oh my god.

Where am I gonna be at 40? This could change the way we live more than anything in two hundred years. So talk to us about that a little. You talked about insurance. You talked about emergency rooms.

Have you given some other thought to other where this is gonna revolutionize it? Okay. So people focus on unemployment and what'll happen. I believe autonomous ride sharing probably causes the loss of 7,000,000 US jobs. It's about 5% of The US workforce.

It's a big number. And there will be people and there's already the unions saying, oh my god. This we have to stop that and they're protecting themselves. That's great. Great.

And and it's appropriate. But the problem from a political perspective is the people who know they're gonna lose their jobs in this world already know it and will organize and fight. But you can also look and say, where do we pick up as a society and from a labor perspective? So if in fact you have $5,000 of increased disposable income per capita and you spread that over ten years it'll take to get there, that increase in disposable income all by itself is enough to drive about 3% GDP growth annually for ten consecutive years. That's never happened in this country.

Got close to it after World War two, but that kind of economic growth is fundamentally unprecedented. Where does that money go? I believe food and beverage goes up. People are gonna spend it to some degree on entertainment, food, and beverage, so I think those industries see a bit of a pop. The huge one is the construction industry, though.

So about 13% of the land area of most downtowns is devoted to parking in one form or another. In this world, there isn't a need for most of that. So it's a tremendous amount of real estate to repurpose, and the vehicles will be smaller. You would likely be able to take one lane of every single street in the downtown area and turn it into bike path or green space, walking area. That's a lot of construction.

There's about 800,000,000 parking spots in The US that have structure around them, as opposed to the street parking or a field at a the big parking field at a stadium. But about 800,000,000 parking spots between the garages on single family homes, apartment buildings, you know, where you put your car at night, and then where you put it in the day in office buildings. If you assume just $50 a square foot is spent repurposing that real estate, that's $10,000,000,000,000. The US construction industry is 1.3. This is almost eight years of doubling the size of US construction.

It won't work out that way, but it's a staggering number. There's about in single family dwellings, just the garages attached to homes, represents square footage that's about one half of the entire residential rental square footage in The United States. It's a lot of real estate that in this world, not next year, but in a number of years, many years in some cases, will need to be repurposed. So you're talking about repurposing. We've got retail space closing down.

We have malls across the country closing down that need to be repurposed. I do know that they're starting to build underground parking structures in these buildings with the ability to turn them into to retail later and reposition because people you know, the big mall owners are and developers are seeing this coming. But, you talk about the American family having this extra $5,000 and you talk about repositioning this real estate. But as the big fives of the world are struggling, as Amazon is capturing more and more of the marketplace, and you have more and more retail space coming up, are you an optimist that that there will be demand for this space in the short run and that people will figure out ways to reposition it? The question presupposes that the space gets used for retail purposes.

There's I'm not sure that that's necessarily what happens because as you noted, and it's a different conversation probably, retail is changing. But if you run through and say, what else could you use the space for? Well, the residential space, which is a lot of it, having it sit there with no cars in it, you know, some people just use it for storage and not invest in it, but that's probably not a great use of the space. People turn it into a home office. They may turn it into a gym.

They may turn it into rental. Right. They go swap the garage door for a wall and a regular door, and you could rent that space out, which is why I spoke to the relevant relative size of the amount of square footage in all these garages versus the entire residential footprint, rental footprint. That's a ton of space. You know, basically, you could turn all those garages into one bedroom units and and change the one bedroom units and and change the residential market.

So those are the types of things that I envision changing. The the parking space that's in urban areas, a parking garage, a stand alone structure, I suspect gets demolished. Right. It's very hard to repurpose and considering even if you had elevators, they're all inclined. They have a one inch and 12 foot slope just to drain water.

And if you tried to work in that environment all day, your back would get sore working on on that slope all day and things would roll off your desk. So I suspect those get demolished. Where it's the basement of a tall office building, maybe it turns into a distribution facility for Amazon Right. Or for other retailers. It's a lot of space.

It's designed to move volume through it. It's ventilated well enough that you can have lots of cars running in it, and maybe they use it for that. Ceilings may not be high enough, but the autonomous fleets as well, they'll probably get 50% ish utilization with passengers, but there'll be another 20% of the day that they'll be free up lanes potentially? So take a city like Los Angeles. Will it help our traffic?

And why? Will people share more rides like with Uber? I know there's ride sharing with Uber and stuff. But with autonomous vehicles, can you explain a little bit about what it will do to the traffic, for instance, in places like LA? I think, overall, it improves it.

But that's my guess at the net effect of three or four different things. So three or four different things are the vehicles will be smaller. 92 or so percent of all rides will have a single passenger. K. So there's no reason when you buy a car, you buy it to fill a whole bunch of roles.

But for a ride share company, since you're saying I want I'm I'm it knows where you are when you request a pickup. They know where you are. You're telling where you're going and how many people. They'll send the vehicle appropriate to you. There's no logic in sending a seven passenger SUV to carry one person.

Right. They'll send it only when there's four or five, and they'll send a smaller vehicle when there's one or two of you. So with substantially smaller vehicles, you gain a whole bunch of capacity on the roads. I mean, you take up the same amount of space either way. It's the size of the car that takes up lots of space.

The vehicles will move more efficiently with each other. They'll be able to go tighter. So you probably increase the capacity of the roads to carry people substantially. You get rid of miles spent in about almost 30% of miles traveled in downtown area are people looking for parking. People are incredibly driven to find cheap parking.

That goes away. So you just get rid of the traffic of people circling the street looking for parking. So that's an advantage as well. The offset to that is that I think vehicle miles traveled goes up a lot. If it's half the price for transportation, people will consume more of it.

It also provides the flexibility where, using a single example, parent taking the kid to the soccer game, parents may decide to send the kid by themselves for practice, and parent will show up for the game an hour later. Whereas right now, that's not a practical way of handling that. There'll be a whole bunch of cases where individual miles traveled increase. People I've talked to think it could be as much as 20%. So that'll offset a chunk of the improvement, probably good for society, increased mobility.

And then to the extent we start freeing up some of that released road space and taking it away, well, that certainly would increase the amount of traffic left on the remaining road, even though it'll move more efficiently. When you put it all together, if the question is, can I move the same distance at the same time of day faster or slower? I suspect it may be slightly faster, but not not notably. But there'll be a whole lot more people achieving it and doing it for a lot less money in a more pleasant environment. Where does Southern California fit into this evolution?

Southern California versus these other markets? If you're asking from what role will Southern California play, what participation it will have in the creation of this ecosystem? I don't think it'll be that substantial. The complexities the problems to be solved to get the cars on the road are problems that Silicon Valley happens to be better suited to solve. They're very complex algorithms, and that's historically been a strength of the talent pool up there.

There are certainly people in LA who have that capacity, but there's just a lot more in Silicon Valley. And as things have evolved, that's where most, not all, but many of the companies focused focused on this problem are. There's also many in other places. In terms of influencing outcomes, LA is the car capital of the world and tends to lead the world in many things automotive. Certainly, design, the design centers for many of the auto OEMs are down here.

Certainly, from a regulatory perspective, California takes the lead, and California's openness or receptivity to autonomy, and some of the challenge it'll present, to date, has been reasonably good. Could be better, but there's always a balance to be struck as well. So I think California and LA end up having a significant role in saying this is the direction the world will go. They may not be creating the technology as much, but the technology is being created for works. And I suspect LA will take its role in proving that this technology can make cities a better place.

When you look at how this scales and the number of self driving cars on the road, perspective of it being an evolution, you will have, as you said, people driving still. Mhmm. At some point from a regulatory perspective or also from a safety perspective, does that get sticky when you have both on the on the road at the same time? Sticky? Yes.

Will it be legislated away? I doubt it. I actually look as an analogy to the transition from horse and buggy to cars. Right. It's not there there's similarities.

There's obviously differences as well. You know, people say I love my car. I would never give it up and let a machine drive me around. But I'm sure in 1900, there were people who said they loved their horse and they would never get in that loud, car to be driven around. And they may have kept their horses a while, and those people are still around today who love their horse.

They happen to get in their car to drive to where their horse is, and I suspect in thirty years, people who truly love cars will get in an autonomous vehicle to get a ride to the place where they get in their race car on a track. And I suspect they'll still be human driven vehicles on the road forty years from now. It'll be really expensive though, because in that environment, parking will have mostly gone away. These vehicles may or may not go to service stations to fuel, but it's gas is gonna be harder to find, insurance is gonna be a lot more expensive, parking is gonna be really hard to find. And what you may have is a vehicle that you drive yourself, but when you get to where you're going, you get out of it and tell it, go find somewhere to hang out for the next four hours, and it'll drive itself there.

That wouldn't surprise me if that if that evolution happens so that the vehicle is still a lot of fun to drive as a person. But those are for people who really that's an edge case as well. It's people who really like driving and just don't wanna give it up. There were people who loved manual transmissions as well. There just aren't many around anymore.

So for for those of us who don't understand technology at the level that you do, there's a few thousand self driving cars that are being tested on the road right now. 2,400. 2,400. That's just mind boggling. So the technology is actually there right now where you can put an an autonomous vehicle on the street, and it's got cars driving around, and it's actually going in and out of traffic, picking people up, stopping.

I mean, that's actually happening today and working? Yeah. Those cars all have almost all have safety drivers in them as of this moment. Right. Which is somebody sitting in the driver's seat ready to take over because, look, they're still learning.

But there are 2,400 of them where, for the most part, they're doing those things themselves in varying degrees. Who's controlling where they go? In in other words, is somebody from afar saying, okay, go from a to b? Right now, it's somebody in the passenger seat saying go from a to b Right. With a computer on their lap.

Interesting. So, Steven, we talked about changing in infrastructure and what's gonna happen to things like parking. How do you envision these cars parking in the future or being serviced in the future? That question sort of goes in two places. But one is how many of these cars are there gonna be?

You can approach it from a couple different ways, but the answer ends up that each autonomous ride sharing vehicle displaces about 10 to 12 regular passenger cars. One way of getting to that difference is that the average passenger car is only used 4% of the time. The average autonomous vehicle in a fleet ought to be used for passengers about 50% of the time. 4% versus 50% is a 12 to one ratio, so it would displace about 12 vehicles. Won't necessarily be exactly that, and people will start changing their you know, rush hour won't have as many cars on the road.

It'll be spread out a little bit more, and people, based based on pricing, will shift their behaviors a little bit. But that that's roughly the ratio. So you get rid of a ton of cars, but the ones that are left are used a whole lot more. Those vehicles, if they're actually working 50% of the time moving people, you can assume 100% near utilization from roughly 05:30AM till about 09:30 or 10AM, and again from roughly 03:30PM till 7PM. They're all gonna be working.

Between around 09:30AM and 03:30PM, most of them will still be working moving packages around. Really effective way since the infrastructure is already there. The marginal cost to move a package when the vehicle is already there is very low. So they'll be on the road doing that for a good chunk of that midday. There won't be a lot of dwell time just for that vehicle where it's waiting around with nothing to do as a result between about 05:30AM and 07:30PM.

So now you've got, what does it do between 07:30? You know, it'd be a few that park, but not many. So they're really gonna be the question is what do they do between 07:30PM and 05:30AM? Well, they're gonna have to get fueled. They're gonna have to get washed and vacuumed.

And the electric one's charged. Let's assume it's around thirty to forty minutes to do some of those services and add another thirty if it's charging. So for about another hour, they're consumed with just what they have to do to keep on the road, and the rest of it, they're gonna go hang out and party. Now they'll probably go out to a parking lot in the suburbs, and Westfield's got lots of asphalt out there at its shopping malls that's completely empty during the day during the night, rather. My guess is they park in places like that at night.

There'll be a security guard. It's reasonably safe, and that's where they start their day. You may as well move them out there when there's no traffic on the roads. Do you think that there'll be a greater push towards electric cars because of this? For the simple reason that there's less moving parts and one of the advantages of having these cars, as you're saying, in this higher utilization is we can't have them breaking down all the time.

Right? Mhmm. I mean, they're they're gonna have to go to a very efficient model of some kind, I would think. Well, that suggests that gasoline cars break down all the time and they really don't anymore. Electric has fully electric cars at scale or not has two big challenges, and they're really big challenges.

The first is a technology challenge, which is that the computers and sensors necessary to drive these vehicles consume a fair bit of power. It sounds to me like it's somewhere between 1,703,000 watts they need. 3,000 watts is two hair dryers. Compared to a car, it doesn't sound like a lot of power. But if you take 3,000 watts, which is three kilowatts, and multiply that by sixteen hours a day of operations, that's 50 kilowatt hours of power.

Well, the battery in my Tesla only holds a 100. Half the entire battery charge would go to running the computers, not running the cars. Until they can get the computing requirements and sensors to require a lot less power, that car's gonna have to come off the road to charge at least twice a day, which now cuts into utilization. It's one of those times is right in the middle of the day when it should be working. So that's gonna be a limiting factor on how fast electric cars go out.

The other is a much bigger problem, which is that as California, as an example, is pushing to increase its renewable power, and about 26, 28% of our power comes from renewables now, but the state is pushing for 50% by 2040, and there's actually legislation that didn't get through the legislature last year, but may or may not get through pushing to get to a 100%, which I don't think is achievable by 2050. You've got a problem, which is almost all that renewable power is solar. There's no geothermal in there, and wind is really hard to get developed. So now you've got a problem. All that solar is generated when the sun shines, which is between 10AM and 3PM.

Cars need to be on the road working at that time and need to charge at night. So you've got this huge mismatch between the generation and the day and the charging that would happen at night, and it creates a really substantial problem. It's a problem that if you run the math through, basically requires five or six nuclear power plants to resolve for for just the state of California. And that's not gonna happen. And what's equally stupid would be to store all that power, build batteries to store it.

Because now what you're doing is putting in solar to charge a battery in the day so you can discharge the battery at night to charge another battery. Now you've actually got two batteries going through a full charge discharge cycle to get one battery's worth of work out of it, and the battery is expensive. That doesn't really work either. So my own belief is that swappable batteries, so the vehicle has two batteries, one's being charged and one's in the car. Batteries that can be exchanged would fix that problem.

But now you run into a different issue, which is that getting the manufacturers to go to that idea and then standardize on it is not likely to happen. Well and as I understand, I mean, the one challenge is there hasn't been change in battery technology such that they can get the size of these batteries down. And they're pretty big. I mean, I I suppose they could shift them out, but you're still talking about a big battery. Battery in my Tesla is a little over 900 pounds, which comes to its own problem.

It's 20% of the entire weight of the car and about 40% of the value, and yet it only gets used 4% of the time. The result of that is that it has a payback of twenty seven years versus gas. There's no economic justification for Tesla for being electric the way they are. If you had swappable batteries, I wouldn't have to carry 900 because I only use all that range ten or twelve days a year. If I had a swappable battery, I wouldn't have to carry 900 pounds and $25,000 around.

Two three hundred and fifty days a year. I'd have a small battery most of the time. And when I did the trip, I'd throw more batteries in the bay and make that ride. It's a lovely theory. So, again, in terms of seeing where the puck goes, ironically, self driving cars extends the demand for the combustion engine electric cars?

The well, hybrids are a middle ground Right. Which are actually really logical middle ground, particularly for urban use. But the other one one is there's one other possibility. Look, if you you're discounting technology change. Sure.

If we had some method of very rapid charging, where you could plug the car and and shoot power into it at 10 times the speed or 20 times the rate we presently do, if that existed, then the vehicles could pull over for two or three minutes and top up or and or take quick sips of electricity and, you know, get one tenth their capacity in fifty or sixty seconds somewhere and then move on. But the only problem with the technology doesn't exist, and anything approaching to it causes this huge degradation of the battery life. So we don't have anything like that technology yet. I suspect it gets developed, and that bridges the gap. But the other thing is the problem I described becomes a problem when you've got a ton of electric vehicles on the road operating in fleets.

We don't have a ton of those right now. Actually, we don't have any right now. So that problem doesn't start to become a material one for five to ten years, presumably. And and these vehicles will have fairly short lives. Four, five years, they'll put on 500,000 miles and be moved out of the fleet.

So, you know, as the technology evolves, you're you're talking three generations down the road before you start having that imbalance between the grid and an electric fleet. And hopefully, by then, the fleet will have some type of quick charging so it can take power in the day fast. So last question. Just if you had to guess when we will have self driving cars in Southern California, where you could go out and actually, instead of renting an Uber with a driver, rent a self driving car. When do you think that'll happen?

I'm gonna change the question a little. Okay. Because you've got that right now. You just have to know the right people to be able to get the car. Okay.

And there'll be a safety driver in it. But if I change the question, say, when do I think 1% of vehicle miles traveled in LA will be in autonomous vehicles? Okay. And I use 1% because I think that's the at which people say, okay. These things are here.

I don't see a lot of them, but they're here. I it's not a weird thing to see it. Right. So I can condense that down. The technology probably shows up in a scalable way in two to three years.

Okay? 1% of vehicle miles traveled is a math problem. There's roughly 6,000,000 vehicles in passenger vehicles in all of Greater LA, LA Orange, Riverside, that whole area. If there's 6,000,000 cars, and there's a 10 to one one vehicle displaces 10, that'd be 600,000 self driving cars could displace them. 1% of 600,000, it would require 6,000 self driving cars to have the capacity to do 1%.

When you get at the math, 6,000 cars doesn't sound like an outrageous number. I think we could see 6,000 self driving cars on the road as working vehicles within two years after the technology's figured out. So unless there's a regulatory reason if the technology is 2021 where it's really deployable, And by 2023, I think they're here. Well, thank you, mister Deetz. My pleasure.

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