Argo AI

Lyft takes $135.7 million hit on Argo AI shutdown • ZebethMedia

By zebethcontrolPosted on November 8, 2022Posted in Argo AI, autonomous vehicles, Lyft, ridehailing, TransportationNo Comments

Ride-hailing company Lyft lost $135.7 million in the third quarter due to the shutdown of autonomous vehicle company Argo AI, in which Lyft had a small stake. Late last month, Argo AI closed its doors as its main backers, Ford and Volkswagen, pulled their investments in order to focus on more near-term goals like advanced driver assistance systems in passenger vehicles. Lyft and Argo were working together to test autonomous ride-hailing using Argo’s tech on the Lyft platform. The two companies had launched public robotaxi services in Austin, Texas in September and Miami, Florida in December of last year. Both of those services have now been discontinued, a Lyft spokesperson told ZebethMedia. Lyft did not say how it will adjust its AV strategy in the future, but the company has also partnered with Motional, another AV tech company, to launch robotaxis in Las Vegas in August. Lyft’s losses incurred by the Argo shutdown only account for about a third of the company’s total losses for the quarter. In Q2, Lyft lost $422.2 million, which is a larger cost than the $99.7 million in the same period of 2021 and a net loss of $377.2 million in the second quarter of this year. A bigger portion of Lyft’s losses are attributable to $224.1 million in stock-based compensation and related payroll expenses, an increase from $179.1 million in the second quarter. The uptick is related to the top-up that Lyft issued to employees when its stock price declined earlier in the year, according to a Lyft spokesperson. Lyft said the increase isn’t yet related to the rounds of layoffs from the company, the first of which occurred in July and the second just last week as Lyft tries to cut down on operating expenses. In regards to that reduction in workforce, Lyft expects to “incur a charge of between $27 million and $32 million” in Q4, as well as “a stock-based compensation charge and corresponding payroll tax expense related to affected team members, as well as restructuring charges related to a decision to exit and sublease, or cease use, of certain facilities,” said Elaine Paul, Lyft’s chief financial officer, during Monday’s earnings call. “However, we aren’t able to estimate these charges at this time because they depend in part on our future stock price.” Paul also said Lyft has been working to reduce stock-based compensation next quarter by ceasing new hires in the U.S. and shifting the nexus of hiring away from the U.S. and toward international markets like Canada and Eastern Europe where “there’s a different compensation model with low or no equity.” Lyft misses Q3 estimates For the third quarter, Lyft reported revenue of $1.05 billion, which is slightly less than Wall Street expectations of $1.06 billion. The company’s earnings per share hit -$1.18 versus the $0.09 that was expected. Even active riders, which saw an improvement quarter over quarter, only topped 20.3 million, and the Street had hoped for 21.1 million. That said, Lyft’s revenue per active rider beat expectations of $49.94 at $51.88. Lyft’s stock, which had started to climb after Uber reported strong earnings last week, fell 14.36% Monday in after-hours trading. The company’s shares have slid 69.29% since the start of the year. Lyft closed the quarter with $143.7 million in cash. Looking forward, Lyft expects revenue to be between $1.145 billion and $1.165 billion in the fourth quarter, with revenue growth reaching between 9% and 11% quarter over quarter and 18% to 20% year over year. Part of that growth will come from increased revenue per rider, which is backed by Lyft’s recent decision to increase service fees for riders. Paul said Lyft intends to cut its operating expenses by roughly $20 million in Q4 versus Q3, which is in part due to the reduction in force. John Zimmer, Lyft’s president, said he was confident that Lyft would be able to achieve its Q4 goals regardless of the macro environment. “We’ve been using internally two main cases. One is the growth case, which assumes market bookings grow in the low to mid 20% year over year, and that the labor market stays as tight as it currently is,” said Zimmer during the Q3 earnings call. “And then, internally what we call a recession case where the market growth slows and we see operating leverage through lower driver engagement and acquisition costs if unemployment rises. So in both cases, we have a very confident path to the billion dollars, and in both cases, we’ll continue to focus our R&D spend on marketplace innovation that helps improve the cost basis of the business.”

Ford, VW seeking buyer for Argo AI’s lidar unit • ZebethMedia

By zebethcontrolPosted on November 1, 2022Posted in Argo AI, autonomous vehicles, Ford, Lidar, Transportation, volkswagenNo Comments

Ford and Volkswagen are trying to squeeze any remaining value out of Argo AI, the autonomous vehicle startup the two automakers invested billons in before abruptly shutting it down last week. One of the primary items on the block: Argo Lidar, an 80-person team and the lidar tech they developed, according to sources familiar with the unwinding of the company. Argo AI was barely a year old when it acquired Princeton, New Jersey-based lidar startup Princeton Lightwave in October 2017. The acquisition, backed by Ford, was hailed years later as helping to provide a key piece of technology in Argo’s full self-driving system. Lidar, the light detection and ranging radar that measures distance using laser light to generate a highly accurate 3D map of the world, is considered by most in the industry a critical sensor required to safely deploy autonomous vehicles at a commercial scale. The team, which is still based in Princeton, developed medium and long-range lidar sensors. Argo has said the long-range lidar has the ability to see 400 meters away with high-resolution photorealistic quality and the ability to detect dark and distant objects with low reflectivity. Back in May 2021, Argo CEO and co-founder Bryan Salesky told ZebethMedia that the lidar sensor was developed to be cost-effective and manufactured at scale, two factors that matter for any company trying to commercialize autonomous vehicle technology. Argo Lidar point cloud. LG Innotek, a South Korean electronics components manufacturer, began manufacturing the lidar units for Argo this year. Sources say there has been interest from companies in other verticals — meaning outside of the AV world — in buying Argo Lidar’s sensors. Whether any of these interested parties will jump at buying the entire lidar team is unclear. Meanwhile, some of Argo’s 2,000 global workforce are getting offers from Ford and VW. Combined the two automakers invested $3.6 billion in Argo — $2 billion in cash and $1.6 billion in value when it took over VW’s Autonomous Intelligent Driving subsidiary and it became its own entity called Argo AI GmbH. VW plans to absorb the Munich-based Argo AI GmbH, an office of more than people, many of them who previously were part of AID, back into the company. VW is also offering jobs to about 100 former Argo employees based in the United States, a move that suggests the automaker is keen to set up some operations stateside. “Several hundred” employees will be offered positions at Ford, according to sources.

Mobileye cruises into the public market and inside the Argo AI collapse • ZebethMedia

By zebethcontrolPosted on October 31, 2022Posted in Argo AI, Mobileye, The Station, TransportationNo Comments

The Station is a weekly newsletter dedicated to all things transportation. Sign up here — just click The Station — to receive the full edition of the newsletter every weekend in your inbox. This is a shorter version of The Station newsletter that is emailed to subscribers. Want all the deals, news roundups and commentary? Subscribe for free. Welcome back to The Station, your central hub for all past, present and future means of moving people and packages from Point A to Point B. Welp, that was a week! My head is still spinning over here what with Mobileye going public, Argo shutting down and Elon Musk taking the reins at Twitter. Yes, there’s a transportation angle to Twitter beyond the less-than-happy reaction of Tesla shareholders. (GM temporarily paused paid advertising on Twitter, following Musk’s takeover.) Let’s just jump right in, shall we? Please email me at kirsten.korosec@techcrunch.com to share thoughts, criticisms, opinions or tips. You also can send a direct message to @kirstenkorosec Micromobbin’ The California state legislature recently passed AB 371, the so-called “Kill Bikeshare Bill,” which puts extreme insurance requirements on shared micromobility companies beyond what’s required of private car owners or rental car companies. It makes the companies liable for the behavior of anyone using their service, and will likely lead to many companies pulling out. Citi Bike has a “Bike Angel” program that incentivizes people (with money!) to rebalance e-bike inventories at docking stations across NYC. San Francisco is restricting shared e-scooters from parking in certain tourist zones, specifically a large stretch of the Embarcadero and a popular street in Fisherman’s Wharf. The move comes as the SFMTA is under pressure to issue more hardline enforcement of sidewalk riding. Tesla Cyberquad for Kids, a $1,900 mini ATV made by Radio Flyer, is being recalled due to safety concerns. About 5,000 units have been sold. You’re reading an abbreviated version of micromobbin’. Subscribe for free to the newsletter and you’ll get a lot more. Inside the Argo AI shutdown Image Credits: Argo AI The sudden shuttering of autonomous vehicle company Argo AI was received like a bucket of ice cold water being dumped on one’s head. Sure, the autonomous vehicle industry is still frontier tech that is years, even decades, away from becoming a product used daily by most consumers. Profits, hell even revenue, are distant goals. And yet, Argo’s demise did feel unexpected, largely because it had deep-pocketed backers like Ford and VW ($2 billion in cash and $1.6 billion in value of taking over VW’s Autonomous Intelligent Driving subsidiary), several high-profile partners with active pilot programs, a large workforce of top talent and a presence in multiple cities. The work culture wasn’t toxic, based on accounts from numerous insiders at different levels of the startup. It was a company widely respected and considered one of a handful of companies poised with the talent, backing and tech to actually pull off the commercialization of AVs. So why did Argo die? Did the founders or its backers make some fatal flaw along the way? Or is it a larger systemic problem with the technology itself? As I learn more about this (and I continue to dig), it seems it is a combination of a few factors, including Ford and VW deciding to prioritize near-term profits gleaned from advanced deriver assistance systems over a still-in-the-works technology that neither company had actually figured out a business model for. (or at least one guaranteed to be profitable) Argo apparently was able to find some new backers (Ford said in its earnings call that Argo couldn’t find fresh outside investment.) But finding capital wasn’t the only problem. The terms of any new investor would have to be agreed upon by Ford and VW. I have received varying accounts on the health of that relationship. ZebethMedia editor Darrell Etherington makes the argument that this proves self-driving cars are not coming anytime soon. Cruise co-founder and Kyle Vogt responded with some light trolling on Twitter. Aurora co-founder and CEO Chris Urmson also piped up with an AV-industry-is-not-doomed message. “This is not a signal that a future with self-driving technology isn’t real or imminent. In fact, it’s quite the opposite,” he wrote, noting Waymo’s expansion of a robotaxi fleet to LA and Cruise charging for driverless rides in San Francisco. Urmson also provided an update on Aurora’s focus on self-driving trucks. I don’t believe the AV industry is dead. I do see — and have for two years now — consolidation, tightening capital markets and a shift in priorities from automakers, which were once some of the biggest cheerleaders and backers of AVs. That makes a tough rough even bumpier. And for now, that shuts out a lot of startups. It would be a bit simplistic to say “it’s the profits, stupid.” But that’s not entirely isn’t wrong either. What do you, dear reader, think? Deal of the week On the day the Argo AI news dropped, Mobileye made its official debut. The success of the IPO — the third largest this year — was seen by many as a validation of Ford and VW’s decision to shutdown Argo. The takeaway was that advanced driver assistance systems, not AV tech, is the real future (at least in terms of revenue and profits). Mobileye was able to price 41 million shares at $21 and above its initial range, raising $861 million. General Atlantic agreed to buy an additional $100 million of shares in a private placement. Investors seemed ready to pile in and helped shares pop and close nearly 30% above the IPO price. I spoke to Mobileye founder and CEO Amnon Shashua on the big day. (Look for a longer piece this week.) A couple of quick takeaways from Dr. Shashua: “Things have changed and became more and more nuanced. You know, five years ago we’d be talking about driving assist and then robotaxis as kind of two separate domains. We gradually built a product portfolio that bridges the spectrum between driving assist and robotaxis.” That

Elon Musk completes Twitter purchase, Meta’s in trouble and it’s time to admit self-driving cars ain’t gonna happen • ZebethMedia

By zebethcontrolPosted on October 29, 2022Posted in Apple, Argo AI, Elon Musk, meta, Startups, Week in ReviewNo Comments

Hey, folks, welcome back to another edition of ZebethMedia Week in Review, the place where we point you to the hottest stories of the past sevenish days. I’m stepping in front of the laptop for Greg Kumparak this week, but don’t fret, he will be back soon. If you want this goodness in your inbox every Saturday, head on over here to sign up. Now, let’s get to it. most read (Elon edition, somewhat) Elon did it: He bought Twitter. The $44 billion acquisition closed this week and on day 1, the platform’s new owner “cleaned house,” Taylor and Amanda write, firing CEO Parag Agrawal, CFO Ned Segal and head of legal, policy and trust Vijaya Gadde. The purchase capped off months of ups and downs, and this week was no different. Darrell rounded up some highlights. Elon’s layoff about-face: While Elon Musk immediately fired some folks at the top, earlier this week in a reversal from his layoff declaration last week, he said he won’t actually lay off 75% of Twitter’s staff — or 5,600 people — writes Rebecca, citing a Bloomberg report. Apple’s Elon problem: Darrell’s headline says it all, really: “Twitter’s Elon problem could soon become Apple’s Elon problem, too.” At issue is that Apple updated its developer guidelines this week, one of which “seeks rent on revenue made by social networks around promoted posts.” Argo AI shutdown: Autonomous vehicle startup Argo AI, flush at launch in 2017 with $1 billion, has shut down. Its parts, writes Kirsten Korosec, are “being absorbed into its two main backers: Ford and VW.” Speaking of autonomous vehicles: After the Argo AI news hit, Darrell took to the site to explore the fact that, no, autonomous vehicles just aren’t going to happen. MrBeast’s worth: Amanda asks if MrBeast, or 24-year-old YouTuber Jimmy Donaldson, is worth the $1.5 billion he’s valuing his business at. Meta is in trouble: That’s the headline. Meta reported its third-quarter results this week and they weren’t great. As Taylor writes: “With the Instagram portion of the business not looking so hot lately, Meta has quintupled down on the metaverse without examining if it even knows what users want at all these days. And after changing the name of the company while ruining a perfectly fine word in the process, there are no easy take-backs.” Meta really was a perfectly fine word. Google Pixel 7’s “dumb” flaw: Haje took a picture through an airplane window and noticed a reflection caused by the reflective chrome surrounding the phone’s camera lens. “It’s a pretty common use case for most photography applications, which makes it all the harder to grok why Google went out of its way to make that experience worse.” audio roundup On Equity this week, we share with you one of Natasha Mascarenhas’s Disrupt panels. She talked to Chief co-founders Lindsay Kaplan and Carolyn Childers about the future of their private membership club for women in leadership positions. This week on Found, Darrell and Jordan sat down with Shanthi Rajan from construction management software company Linarc to discuss breaking into a slow-changing industry, building a team with talent across the globe and working with customers to build the most useful product possible. And on Chain Reaction, Anita and Jacquelyn chat about Apple’s new App Store guidelines, Reddit’s foray into the NFT space and whether the U.K.’s new prime minister will live up to the hype he’s received from the crypto community. techcrunch+ 5 tips for launching in a crowded web3 gaming market. Contributor Corey Wilton explains the steps that will set you apart when looking for capital. Pitch Deck Teardown: Palau Project. Haje usually passes on tearing down pre-seed rounds, but he went for it this week with the Palau Project, which was founded by professional kite-surfer Jerome Cloetens, who is taking on climate change.

Ford takes $2.7B hit on Argo shutdown, shifts its bet to driver assist tech • ZebethMedia

By zebethcontrolPosted on October 26, 2022Posted in Argo AI, Ford, TransportationNo Comments

As the third-quarter earnings drumbeat continues, we learned more about the state of global supply chains, global consumer appetite for big-ticket items and the future of self-driving technology. After the bell this afternoon, Ford beat Wall Street analyst revenue estimates of $36.25 billion, per Yahoo Finance, with automotive Q3 2022 top line of $37.2 billion, and total revenues of $39.25 billion, up 10% despite lingering supply chain issues. The company’s adjusted earnings per share also came in ahead of expectations. However, the financial news was quickly outweighed at least in commentary terms by the company’s choices regarding autonomous vehicle technology. ZebethMedia broke the news earlier Wednesday that Argo AI, a self-driving company in which Ford was an investor, is shutting down. Ford, in its earnings report, wrote that it is shifting its capital spend from the Level 4 autonomous systems being developed by Argo AI to internally developed “L2+/L3” advanced driver assistance technology. “So it’s taking that investment and putting it towards a business where we think we will have a sizable return in the near term relative to one that’s going to have a long arc,” said Doug Field, chief advanced product development and technology officer at Ford, during Wednesday’s investor call. Jim Farley, Ford’s CEO, even went so far as to say “profitable, fully autonomous vehicles at scale are a long way off and we won’t necessarily have to create that technology for ourselves.” “We don’t expect a single ‘Aha!’ moment like we used to,” he said during a call with investors. “Advancing Level 2 hardware and software beyond what Blue Cruise can do today, and ultimately enabling our customers to travel in very large ODDs or operating domains with their eyes off the road will give them back the single most valuable commodity in our modern lives. Time.” Letting go of the Argo AI investment, however, had a material impact on the company’s profitability in the quarter. To unwind the trade, Ford had to endure a $2.7 billion “non-cash, pretax impairment” on its Argo stake. That pushed the company’s GAAP results into negative territory for the three-month period. Taking a huge pre-tax loss is notable, as is the shift to focus on lower-level driver-assist technologies. The company had some good news to report, however, apart from its top-and-bottom line beats: profitability. Per the automotive company, Ford expects 2022 to bring in $11.5 billion in earnings before interest and taxes. Free cash flow projections for the year also ticked higher, with Ford anticipating $9.5 billion to $10.0 billion worth of the substance in 2022. (Ford’s EBIT in the third-quarter of $1.8 billion was above its own expectations.) The news of Argo’s dissolution comes not even a month after the company officially launched a robotaxi service on Lyft’s network in Austin using a fleet of Ford Escape hybrid vehicles. Last month, Argo also launched an ecosystem of products and services aiming to support commercial delivery and robotaxi operations. It’s not clear what will happen with those services now, and Argo did not respond to ZebethMedia in time. Ford’s view that it can forgo investments into pricey — and seemingly yet far-out — self-driving technology could mean a dearth of future deals from major car companies into smaller, tech-heavy autonomous companies. And the pullback in optimism could impact suppliers for those companies — the lidar concerns, and their ilk. Last week at ZebethMedia Disrupt, Rivian founder and CEO RJ Scaringe shared similar sentiments to Farley’s, saying that fully autonomous vehicles would be harder to achieve and scale. He said Rivian would pursue Level 2 and Level 3 systems which are on cars now and are getting increasingly better every day. Ford is not the only company struggling with its self-driving ambitions; Tesla is reportedly in trouble with the U.S. government about its own self-driving tech. The U.S. Department of Justice is reportedly investigating the company regarding its “Autopilot” capabilities, which is Tesla’s advanced driver assistance system that CEO Elon Musk has boldly claimed can drive itself in certain scenarios. This story is developing. Check back in for updates.

Ford, VW-backed Argo AI is shutting down • ZebethMedia

By zebethcontrolPosted on October 26, 2022Posted in Argo AI, autonomous vehicles, Ford, TransportationNo Comments

Argo AI, an autonomous vehicle startup that burst on the scene in 2017 stacked with a $1 billion investment, is shutting down — its parts being absorbed into its two main backers: Ford and VW, according to people familiar with the matter. During an all-hands meeting Wednesday, Argo AI employees were told that some people would receive offers from the two automakers, according to multiple sources who asked to not be named. It was unclear how many would be hired into Ford or VW and which companies will get Argo’s technology. Employees were told they would receive a severance package that includes insurance, a transaction bonus and termination pay. Several people told ZebethMedia that it was a generous package and that the founders of the company spoke directly to its more than 2,000 workforce. ZebethMedia will update this story with official comment. Argo was founded in 2016 by Bryan Salesky and Pete Rander. The company came out of stealth in February 2017 when Ford announced it would invest $1 billion over five years into Argo. Since then, the company has raised more than $2.6 billion, primarily from Ford and VW, in a pursuit to develop, test and eventually commercialize its automated driving system. The initial Ford investment came at a particularly hype-y time for the nascent autonomous vehicle industry. Startups, many founded by early pioneers of Google’s self-driving project, were landing eye-popping venture capital deals. A string of acquisitions followed: GM bought Cruise for $1 billion in 2016; Delphi, which is now Aptiv, acquired nuTonomy for $450 million; and Amazon bought Zoox. The promises around commercializing AV technology have proven more difficult than expected. A wave of consolidation washed over the industry with companies folding, being absorbed into other companies, including Apple, and others turning to SPACs in hopes of gaining the capital it needs to continue its mission. Argo seemed to be gaining ground in the past year. The company’s self-driving Ford Fusion vehicles, and now Ford Escape Hybrids, were frequently seen testing on public roads in Austin, Detroit, Miami, Palo Alto and Pittsburgh, where it is headquartered. In the EU, Argo was using the all-electric Volkswagen ID Buzz for its testing programs in Hamburg and Munich. Argo also has several pilot programs underway in Austin, Miami and Pittsburgh with Lyft, Walmart and 412 Food Rescue. And just last month the company revealed an ecosystem of products and services designed to support commercial delivery and robotaxi operations. The products — a list that includes fleet management software, data analytics, high-definition mapping and cloud-based communication tools — stretches far beyond the self-driving system that allows a vehicle to navigate city streets without a human driver behind the wheel. Argo appeared to be telling the world it was open for business. This story is developing …