Little Red Corvette is literary treasure

In the classic 1983 single "Little Red Corvette", Prince adopted car- and horse-riding metaphors to describe a relationship with a promiscuous (='loose moral') woman (Personal note: wouldn't a Mustang, instead of Corvette, serve a better metaphor for the two imageries?).  The chorus repeatedly pleads to her (the car) to "slow down" because she was going "much too fast".

Anyways, the start of the second verse (1:04 in the above video) is literary gold, almost Shakespearean:

"I guess I shoulda closed my eyes
When you drove me to the place where your horses run free
I felt a little ill
When I saw all the pictures, of the jockeys that were there before me..." 

LOLZ. 

Zuckerberg testifies before Senate

What's up with self-driving cars??

High tech stuff here, but not the issue

Techies have been promising us self-driving cars for, well, as long as we've had the internet? ...... In the meantime, we have launched spaceships to orbit Jupiter and Pluto, actually landed on Saturn and on a tiny comet(!!!).  Meanwhile here on humble earth, we are talking about cars that charge instead of fill up.  A taxi network/hitchhiking system that is somehow worth $60bn.  A simpler way to order Chinese takeout.  Seriously, we need to get our act together.

So what is the holdup, why can't we have our long-overdue autonomous vehicles (AVs) NOW?  If my reading is correct, it's the worst-kept secret ever, and it's just as terrible as we imagine.

It's not about the technology

We have had the technology for many decades, as the beating heart of AVs comprises of GPS assist, LIDAR/RADAR, sensors, image/object recognition -- all ubiquitous in today's world.  Sure they remain flawed at certain situations, but it's a matter of getting the machine to recognize more complex situations to make the right decisions.  This process uses basic machine learning algorithms that we've learned since the 1970s, although the learning corpus is open-ended ("how much safety vs comfort/speed would we be happy with?" "how many different situations does the system need to recognize?"  "how unpredictable is driving, really?").

It's not even about safety

The technoverse went up in arms last month when an Uber AV struck and killed a pedestrian crossing the street in Arizona; much was also said about how the car's backup (human) driver didn't respond quickly enough to prevent the accident.  The foregone conclusion is that the technology still needs refinement to be ready for mass adoption.

But if the ultimate goal is to create safer driving environment, there's a number of readily-available safety technology that carmakers haven't seemed interested to implement, or only make available as optional (=costly) extras.  So the claim that safety is priority is dubious.  From Ryan Felton at Jalopnik:

"Forward collision warning and automatic emergency braking, for instance, are two features that’ve been found to cause a 40% drop in crashes. At the moment, it’s being rolled out across [Ford] model lines, [mostly as]an optional extra. [...] GM even has semi-autonomous tech in production right this very moment. New Cadillacs can come with Super Cruise, a feature that holds your car in your lane for you, tying together all of the driver-assistance systems we’ve seen debut over the past few years... but it’s only available on the pricey CT6 sedan. How long will Chevrolet buyers have to wait before they’re permitted to have as much safety as Cadillac customers?" 

It's complicated sometimes

In the end, society will accept a certain level of "safety": when the algorithms inevitably mess up, the nearest humans (safety driver? programmer? CEO of Waymo?) will shoulder the blame, then the machine will incrementally advance.  That's how technology works historically.

The real issue, as is often the case, is MONEY.

Different people, different tech companies may have  10+ different visions of how AVs should be in real life.  In tech lingo, there are five levels of AVs, from the most basic drivers' assistance to fully hands-off systems (no steering wheel!) without needing human monitoring or intervention.  So laypeople are left wondering, what should we realistically expect?  Cars that park itself? (Lexus has offered this since 2006, but only on the top-of-line models).  On-demand taxis without a human driver? Or is it more like personal vehicles that we drive manually, but can switch to full auto when we reach the highways? Hmm that actually wouldn't be a bad deal at all.

Uber is one of the companies at the forefront of this R&D, and we understand their goal is to dominate the world with a fleet that don't require paying drivers' salaries or benefits. But then we're faced with other pressing questions -- what really is society's goal for this long and costly endeavor, and whether or not we are ready to pay the price.  

From John C. Dvorak at PCMag:

"... it's folly to think that in a world of self-driving cars anyone would want to own a car. What would be the point when you can call up a ride and save money on gasoline and parking? All your insurance costs, maintenance, and car payments are now zero.

But what happens to car sales when all vehicles are part of what amounts to a large ride-sharing fleet? What's the point of designing something special or unique? It will be a world of stripped-down, gray Corollas everywhere.

Moreover, Federal, state, and local governments will feel the impact the most via lost revenue. Parking fees, parking tickets, road taxes, speeding, and traffic tickets, parking lot taxes, license fees, car sales taxes—all will be reduced or completely eliminated. In San Francisco, for example, the parking meter plus ticket revenue is estimated at $130 million.

Perhaps autonomous cars can be taxed in other ways, but the efficiency of an driverless transport model may not make up the difference.  The bigger loss is not in revenue, though, but in employment. Once autonomous vehicles become the norm, jobs are lost by the boatload and a costly burden is then put on society."

People still aren't comfortable riding, or being around, AVs.

A 2017 Northeastern University/Gallup survey finds that 59% of (US) respondents said they would be uncomfortable riding in a fully self-driving car on a daily basis, and 62% said they would be uncomfortable sharing the road with fully self-driving trucks.

Granted this is an emerging technology, so public opinion may evolve over time, but for now it looks like a classic case of "if you build it, they will come".

So when can we expect, um, something?

My favorite hot take is by Elon Musk, who fancies something aptly described as "bus stations".  Jokes aside, Raphael Orlove at Jalopnik summarizes it best below.  -->TLDR version: in 10 years, we'll probably still be talking about driverless cars as "the next big thing".

"There is a lot of momentum leading us towards autonomous cars, and it feels like we’re on some kind of cusp with them, but I hate to say that other technologies have sat in the waiting room of reality for longer. Virtual reality has been about to happen since the early ‘90s. Yet it stuttered under the weight of its glowing promotions, never able to promise as much as everyone hoped it would. VR sets cost too much and offered too little. The rigs were expensive, and the content was lacking. Many applications of VR today are downright embarrassing.  Now the tech limps along with many companies afraid to invest much into it, as Kill Screen recalled in first one then another feature on the ‘broken promise’ of the tech.

And self-driving cars have been in this cusp for longer than you think. Delphi did an autonomous cross-country drive in 2015, but so did a pair of academics in 1995. Full autonomy is the future today, just as it was 22 years ago. At a certain point you have to wonder if this is never going to happen, like flying cars, perpetually promised to be a few years away.

Since 2013, car companies have argued that fully autonomous cars would be in showrooms by the end of the decade, but in the past few years (when we’ve seen autonomous car testing in full swing) those promises have looked shakier and shakier. Ford, for instance, told Forbes in 2015 to expect full autonomy by 2020, but it couched it by saying these cars would probably be restricted to defined areas. A year later in 2016, Ford announced that it would have fully-autonomous cars by 2021, but it would just for geo-fenced ride-sharing or ride-hailing.

It’s time to seriously think about a future where complete autonomy never comes to us as we imagine it, where you don’t have roads solely occupied by self-driving cars talking to each other, whizzing through intersections at 50 miles an hour.

The best case scenario I can imagine has large cities banning cars from their inner downtowns with limited-application self-driving cabs whisking people around instead. I feel like we’re only a few more terrorist attacks away from urban car bans as it is. The worst case scenario I can imagine has that flopping, too, if enough people hack into these cars and hijack them, too, as I wrote back in 2014. Beyond that, you can have cars with glorified cruise control as we do now, only across the board, not that that alleviates much of anybody’s more grim hacking fears."

Not quite Economics 101?

Orangutan smoking LOLZ

This is by far the most hilarious thing I've ever seen ever.

Whither Retail Apocalypse //or can we blame Amazon?

Bad news all over again

The worldwide retail apocalypse continues to swallow new victims, as nine US retailers faced bankruptcies in 2017, with even more expected to come in 2018.   J.C. Penney, RadioShack, Macy’s, and Sears have each announced 100+ store closures. The Sports Authority liquidated, and Payless filed for bankruptcy.  Popular and iconic apparel brands including Lululemon, Urban Outfitters, American Eagle, and Ralph Lauren all announced downsizing efforts to minimize costs.  We also don't need to go far back down the memory lane to remember retail icons such as RadioShack, Circuit City, and Blockbusters, many of which fell prey to private equity debt burden.

Similar story is unfolding in Indonesia: a number of prominent Matahari Department stores have closed down due to productivity issues.  In 2017 food-centric retailer 7-Eleven closed all of its 161 convenient stores after eight years of operations, citing poor store productivity, competition from ubiquitous Alfamart and Indomaret stores, and the 2015 nationwide ban on alcohol sales in minimarkets.  Problems also plague down-market department store chain Ramayana, which closed 8 stores in various metropolitan areas in 2017.

Let's talk about the various change factors.

1. Dramatic change in consumer behavior

The most important factor is the shifting consumer consumption patterns.  The millennial generation generally has more limited resources, but when they do spend, they'd rather spend on experiences (vacation, travel, health spending, meals out) – basically stuff you can show off on Instagram without looking pretentious.  They don’t want to spend on material objects like housing – because they'd prefer to be mobile and don’t want to be tied down.  They don’t want to buy cars – because there’s Uber/Gojek/Grab-Cars.

The impact hits the broader consumer segments significantly.   The Toys R'Us bankruptcy, in which it plans to close 800+ stores in the US and 100+ in the UK, is a good lesson on changing consumer behavior: today’s children and teenagers were shaped by smartphones, social-media apps, and living-room bingeing.  Yes, this correlates with upticks in teen depression and anxiety, but it also depletes the market for hardware toys.  In the last year, Lego, Mattel, and Hasbro have all reported declining sales for key toy brands.

What’s up? Travel is booming. Hotel occupancy remains robust, despite intense competition from home-sharing platforms (Airbnb).  The rise of restaurants is even more dramatic. Since 2005, sales at “food services and drinking places” have grown twice as fast as all other retail spending. In 2016, for the first time ever, Americans spent more money in restaurants and bars than at grocery stores.

2. Online does have impact

Amazon in the US and Europe is dominant, true.  But the claim that consumers don’t spend on retail because of online stores is dubious – take Indonesia, where the value of online shopping is still way too small (~1%).   The real issue is that the internet has made for savvier consumers: (especially with bigger-ticket items) they study product reviews, watch unboxing videos, discuss products in forums or with their friends; consumers are often more knowledgeable about products on sale than storekeepers!  Knowledgeable consumers not only compare prices to find the best deals, but they also spend less time in physical stores and do less window shopping, avoiding impulse purchases along the way.

3. There’s just too many dang malls

The oversupply in Indonesia is longstanding, where Jakarta, with its 173 malls, has banned new construction since 2011, citing overcrowding, concerns on traffic jams and lack of public space. Outside of the Jakarta province, including in Greater Jakarta area, however, the pace of construction has not been affected.

In the US the situation is odd, to say the least.  As everything from once-mighty department stores to niche clothing chains announce plans to shutter hundreds of locations, and retailers file for bankruptcies at a record pace, builders continue to pour growing sums into retail projects.  Across the country, construction spending on shopping centers topped $1.6 billion in June, the largest amount since 2008 and the Great Recession. In nominal terms, mall construction numbers record the second highest monthly total ever according to Census data, coming in behind July 2008.

Is traditional retail going the way of the dodo? Where is it going to end?

I reckon brick-and-mortar retail is going through an uncomfortable dislocation, which may take a little while longer, but retailers will eventually find its comfort zone.  For instance, fashion retailing is still going to live, as fashion e-commerce still has its set of challenges, such as branding and fit.  Similarly with fresh groceries, for which online stores face difficult (though definitely solvable) logistical hurdles, although physical stores have their own set of problems (e.g. debt, competition, and diminished buying power).  High-end goods, including electronics, will likely transform their retail presence into experience-stores akin to Apple Store.

Other retail segments, such as department stores, is probably going to end up much, much smaller than it has been in the past.  Bloomberg cites railroads as a historical example -- it didn't go extinct when people started using cars, but it saw its usage become specialized.   There's already evidence that specialized stores that cater to a specific niche, either premium (e.g. Whole Foods) or value-focused (e.g. Dollar General), tend to outperform those using balanced approach -- something Deloitte coins as "retail bifurcation" as opposed to broader "retail apocalyse".