Telsa Autopilot Fatality: Let's not blame the robots...yet.

By now most have heard of the fiery crash involving a Tesla roadster. This episode from the Young Turks does a good job at examining incident:

For more sensationalist coverage of the incident, watch the following:


The gentlemen at the end of the video notes how he would never trust a computer to drive him and his family.

So are such fears of computers warranted? 

If you look at the original press release from Tesla, it notes:

"What we know is that the vehicle was on a divided highway with Autopilot engaged when a tractor trailer drove across the highway perpendicular to the Model S. Neither Autopilot nor the driver noticed the white side of the tractor trailer against a brightly lit sky, so the brake was not applied. The high ride height of the trailer combined with its positioning across the road and the extremely rare circumstances of the impact caused the Model S to pass under the trailer, with the bottom of the trailer impacting the windshield of the Model S. Had the Model S impacted the front or rear of the trailer, even at high speed, its advanced crash safety system would likely have prevented serious injury as it has in numerous other similar incidents."

So analyzing the incident both the auto-pilot system and the driver didn't recognize the truck in the distance. With the fear of robots, it's easy to fan the flames of "robotophobia" and quickly blame the robots. For example, some could claim the driver would have been vigilant had he not had such an auto-pilot system. But this is mere speculation and hard to prove. 

A couple other things should be noted when evaluating this incident.

• Robot record is superior to the human only record: As Tesla has noted, that the car has driven safely 130 million miles, contrasting this to a fatality every 94 million miles driven in the US and 60 million world wide. In other words, the robot record is superior to the human only record. 
• What about the times the robot has saved people from crashes? The other problem is how do you balance this bad news with the good news that never gets reported. This refers to the time the autopilot acted to save the human beings from crashes. It similar to investments in information security that save the company from countless malware incidents. However, because nothing happens no one really notices the value of technology. Similarly, we're not able to balance the "fear, uncertainty, doubt" associated with this incident with all the times the auto-pilot system actually avoided a crash. 

The incident does point out, however, a bigger looming issue of how human beings and machines work together. Despite the caveats, people are already eager to let the auto-pilot drive them around. And really why not? Commuting is giant waste of time and we could be more productive while letting the computer drive us around. 

Nicholas Carr explores this issue in his latest book The Glass Cage. In the book, he explore how the more reliant we are on a technology, the less connected we are to the world. For example, by moving from manual to automatic transmission, in his opinion, driving is less fun. He also points out how airplane pilots are really just babysitting the computer that actually flies the plane. The trouble occurs when there is a crisis situation where the pilots are unable to handle the situation because they have lost their ability to actually fly planes. 

To be fair, this was not the issue in the Tesla crash - it's way too soon to say that the individual driving the car was overly dependent on the car. However, it is plausible to see how this will occur quite quickly if someone like Google were to offer driverless cars to the massed (as I noted in this  post). However, the government didn't made it mandatory to learn to ride a horse - just in case all the cars stopped worked. So I doubt they will force us to learn to drive cars, just in case the autonomous cars stop driving. 

Cloud vs corporate IT: Insights into how the share-economy will play out?

When thinking about disruption we often attempt to look to the past for how it will affect our future. However, we can also explore how disruptive tech is impacting our world today.

Consider a recent WSJ article that gave us insights in to how cloud and mobile is disrupting "classic tech":

• EMC, Intel and IBM are being disrupted. The move to cloud and mobile is impacting the ability of these companies to meet earnings expectations. For example, EMC's sales of storage products declined by 10%, while Intel has seen an overall decline in PC Market sales.
• Companies are slashing their workforce in response to such trends. The shift to cloud & mobile is resulting has resulted in the hemorrhaging of 12,000 jobs, or 11% of the workforce, at Intel alone. 
• Overall decline in revenues/profits despite strategic shifts in product mix. IBM's cloud computing business grew 34%, while Intel's data centre business, serving cloud providers grew 9% (for more on this "corporatification trend" see here). However, IBM's total revenue fell almost 5%. Intel had a tough time keeping up with rivals like ARM who posted revenue gains of 22%. This compares to 7% of which the WSJ attributes a chunk of that rise to an acquisition Intel made. 

Reflecting on these trends, is it fair to think of cloud as the original use case for the share economy? 

When we think of Uber, Airbnb, etc., we see how users can use these platforms to monetize their excess or underutilized asset by renting it to others.

However, isn't that also the story of the cloud?

Amazon, Intuit, and other cloud computing companies decided to "share" their excess computing capacity to others. In a sense, we are talking about servers instead of houses, but the concept is really the same.

And this goes to my initial point. We are living through the disruptive impacts of cloud and mobile on legacy-tech and we can quantify, analyze and understand its impact.

Given this premise what does this above tell us about the share-economy?

Firstly, better utilization of assets leads to the sale of less assets.  This should be expected as there is a more efficient use of assets leads to  (servers, car, house, etc) less market size as demand remains constant. As I had noted in the post a few months ago, Uberization of the taxicab industry would ultimately lead to a fleet of cars that are owned by a company like Google - leading to a net reduction of cars used by society. GM probably understands this concept as they have invested $500 million into Lyft; a competitor to Uber.

Secondly, it illustrates how the share-economy is subject to concentration of wealth: the cloud computing landscape is dominated by large players, including Amazon, Google and Microsoft. As noted by Douglas Rushkoff in the following video, since these innovations emerge out of the "operating system of capitalism", they inevitably result in the formation of a handful of platforms dominate the industry and capture the lion's share of the profits.


(Also check out his book that discusses this in more depth)

Thirdly, its difficult for behemoths to adjust to these types of shifts. Despite Intel and IBM investing in the disruptive technologies, it's hard for them to adjust to the dynamics of the new economy. This illustrates how much more challenging it will be for those disrupted by such platforms to re-tool and compete in the landscape.

For accountants and auditors, one such platform to watch out for is Gigwalk. As per their website, their value proposition is that by leveraging the 350,000 “professional services” workers (see graphic below) the manufacturer or other upstream supplier can get visibility into the actual retail outlet. For example, Whirlpool wanted to “Audit the presence of its Swash product on showroom floors, communicating back to corporate compliance gaps in real-time”.

And the "starter Store Audit Package" begins at $10.

Creative destruction is not inevitable, but we should learn from the lessons of these tech giants and plan prudently to meet such challenges head on.