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Inside Voyage’s plan to deliver a driverless future

By Kirsten Korosec

In two years, Voyage has gone from a tiny self-driving car upstart spun out of Udacity to a company able to operate on 200 miles of roads in retirement communities.

Now, Voyage is on the verge of introducing a new vehicle that is critical to its mission of launching a truly driverless ride-hailing service. (Human safety drivers not included.)

This internal milestone, which Voyage CEO Oliver Cameron hinted at in a recent Medium post, went largely unnoticed. Voyage, after all, is just a 55-person speck of a startup in an industry, where the leading companies have amassed hundreds of engineers backed by war chests of $1 billion or more. Voyage has raised just $23.6 million from investors that include Khosla Ventures, CRV, Initialized Capital and the venture arm of Jaguar Land Rover.

Still, the die has yet to be cast in this burgeoning industry of autonomous vehicle technology. These are the middle-school years for autonomous vehicles — a time when size can be misinterpreted for maturity and change occurs in unpredictable bursts.

The upshot? It’s still unclear which companies will solve the technical and business puzzles of autonomous vehicles. There will be companies that successfully launch robotaxis and still fail to turn their service into a profitable commercial enterprise. And there will be operationally savvy companies that fail to develop and validate the technology to a point where human drivers can be removed.

Voyage wants to unlock both.

Crowded field

US regulators take aim at Tesla over Model 3 safety claims

By Kirsten Korosec

Tesla’s claims about the safety of its Model 3 electric vehicle prompted U.S. regulators to send a cease-and-desist letter and escalate the matter by asking the Federal Trade Commission to investigate, according to documents released by the nonprofit legal transparency website PlainSite.

The documents show correspondence between the lawyers at National Highway Traffic Safety Administration and Tesla that began after the automaker’s October 7 blog post that said the Model 3 had achieved the lowest probability of injury of any vehicle the agency ever tested. PlainSite received the 79 pages of communications since January 2018 between NHTSA and Tesla through a Freedom of Information Act request. There were 450 pages of communication that were withheld due to Tesla’s request for confidentiality on the basis of “trade secrets.”

NHTSA took issue with the blog post, arguing that Tesla’s claims were inconsistent with its advertising guidelines regarding crash ratings. The matter might have ended with that demand. But NHTSA took the issue further and informed Tesla it would ask the Federal Trade Commission to weigh in.

“This is not the first time that Tesla has disregarded the guidelines in a matter that may lead to consumer confusion and give Tesla an unfair market advantage,” the letter dated October 17 reads. “We have therefore also referred this matter to the Federal Trade Commission’s Bureau of Consumer Protection to investigate whether these statements constitute unfair or deceptive acts or practices.”

Tesla did not respond to a request for comment.

The automaker’s lawyers did, however, push back against NHTSA’s request, according to the correspondence released by PlainSite. Tesla lawyers argue in one letter that the company’s statements were neither “untrue nor misleading.”

“To the contrary, Tesla has provided consumers with fair and objective information to compare the relative safety of vehicles having 5-star overall ratings,” the letter from Tesla’s deputy general counsel.

The documents posted by PlainSite also showed NHTSA requested sales data on all Tesla vehicles produced since July 2016 with or without Autopilot, the automaker’s advanced driver assistance system. The agency also issued subpoenas to Tesla ordering it to produce information on several crashes, including a January 25, 2019 crash in San Ramon, Calif. The subpoenas requested information about the vehicle, its owner, history and videos and images related to the crash and were to be sent to NHTSA’s Office of Defects Investigations.

Africa Roundup: Canal+ acquires ROK, Flutterwave and Alipay partner, OPay raises $50M

By Jake Bright

in July, French television company Canal+ acquired the ROK film studio from VOD company IROKOtv.

Canal+ would not disclose the acquisition price, but confirmed there was a cash component of the deal.

Founded by Jason Njoku  in 2010 — and backed by $45 million  in VC — IROKOtv boasts the world’s largest online catalog of Nollywood: a Nigerian movie genre that has become Africa’s de facto film industry and one of the largest globally (by production volume).

Based in Lagos, ROK film studios was incubated to create original content for IROKOtv, which can be accessed digitally anywhere in the world.

ROK studio founder and producer Mary Njoku  will stay on as director general under the Canal+ acquisition.

With the ROK deal, Canal+ looks to bring the Nollywood production ethos to other African countries and regions. The new organization plans to send Nigerian production teams to French speaking African countries starting this year.

The ability to reach a larger advertising network of African consumers on the continent and internationally was a big acquisition play for Canal+.

San Francisco and Lagos-based fintech  startup Flutterwave  partnered with Chinese e-commerce company Alibaba’s Alipay to offer digital payments between Africa and China.

Flutterwave is a Nigerian-founded B2B payments service (primarily) for companies in Africa to pay other companies on the continent and abroad.

Alipay is Alibaba’s digital wallet and payments platform. In 2013, Alipay surpassed PayPal in payments volume and currently claims a global network of more than 1 billion active users, per Alibaba’s latest earnings report.

A large portion of Alipay’s network is in China, which makes the Flutterwave integration significant to capturing payments activity around the estimated $200 billion in China-Africa trade.

Flutterwave will earn revenue from the partnership by charging its standard 3.8% on international transactions. The company currently has more than 60,000 merchants on its platform, according to CEO Olugbenga Agboola.

In a recent Extra Crunch feature, TechCrunch tracked Flutterwave as one of several Africa-focused fintech companies that have established headquarters in San Francisco and operations in Africa to tap the best of both worlds in VC, developers, clients and digital finance.

Flutterwave’s Alipay collaboration also tracks a trend of increased presence of Chinese companies in African tech. July saw Chinese owned Opera raise $50 million in venture spending to support its growing West African digital commercial network, which includes browser, payments and ride-hail services. The funds are predominately for OPay, an Opera owned, Africa-focused mobile payments startup.

Lead investors included Sequoia China, IDG Capital  and Source Code Capital. Opera  also joined the round in the payments venture it created.

OPay will use the capital (which wasn’t given a stage designation) primarily to grow its digital finance business in Nigeria — Africa’s most populous nation and largest economy.

OPay will also support Opera’s growing commercial network in Nigeria, which includes motorcycle ride-hail app ORide and OFood delivery service.

Opera founded OPay in 2018 on the popularity of its internet search engine. Opera’s web-browser has ranked No. 2 in usage in Africa, after Chrome, the last four years.

July also saw transit tech news in East Africa. Global ride-hail startup InDriver launched its app-based service in Kampala (Uganda), bringing its Africa operating countries to four: Kenya,  Uganda, South Africa and Tanzania. InDriver’s mobile app allows passengers to name their own fare for nearby drivers to accept, decline or counter.

Nairobi-based internet hardware and service startup BRCK and Egyptian ride-hail venture Swvl are partnering to bring Wi-Fi and online entertainment to on-demand bus service in Kenya.

Swvl BRCK Moja KenyaBRCK is installing its routers on Swvl vehicles in Kenya  to run its Moja service, which offers free public Wi-Fi — internet, music and entertainment — subsidized by commercial partners.

Founded in Cairo in 2017, Swvl is a mass transit service that has positioned itself as an Uber  for shared buses.

The company raised a $42 million Series B round in June, with intent to expand in Africa, Swvl CEO Mostafa Kandil said in an interview.

BRCK and Swvl wouldn’t confirm plans on expanding their mobile internet partnership to additional countries outside of Kenya .

Africa’s ride-hail markets are becoming a multi-wheeled and global affair making the continent home to a number of fresh mobility use cases, including the BRCK and Swvl Wi-Fi partnership.

More Africa-related stories @TechCrunch

African tech around the ‘net

Tesla will deliver in-car YouTube and Netflix video streaming ‘soon’

By Darrell Etherington

Tesla is getting ready to “soon” deliver the in-car video streaming services that CEO Elon Musk suggested would eventually come to the automaker’s cars. Musk shared this (somewhat vague) updated timeline on Twitter over the weekend, after noting earlier in June at E3 that Tesla’s infotainment displays would eventually be getting YouTube and streaming video support.

This is also the first time Musk has specifically said that both YouTube and Netflix would be coming, after previously noting that version 10 of the in-car software would support video streaming generally in reply to a question from a fan on Twitter. Musk added that these would be available to stream video only while the vehicle is stopped — but the plan is to change that once full self-driving becomes a reality.

Once full autonomous driving capabilities are “approved by regulators,” Musk said, the plan is to turn on the ability to stream video in the vehicle while it’s in motion. This plan likely extends to Tesla’s in-car gaming features, too — though that’s a separate level of distraction as you’re actually interacting with what’s happening on the screen, which may not be the best idea for initial roll-out of autonomous features where a driver might be required to take over manual control in case of any incidents.

The Tesla CEO said the experience of watching video on Netflix and YouTube in a Tesla vehicle is akin to “an old-school drive-in movie experience, but with much better sound” and that it has an “immersive, cinematic feel” thanks to the surround audio available via the Tesla’s audio system and its “comfy seats.”

It may seem like a weird software update priority for a car, but it’s entirely possible Tesla owners spent so much on their vehicles that they don’t have spare cash for a fixed address, in which case an entertainment system for their tiny apartment actually makes a lot of sense.

Using the same tactics as ‘Big Tobacco,’ Juul may have intentionally targeted teens

By Jordan Crook

After a hearing this week, members of the U.S. House Committee on Oversight and Reform said that Juul, the ultra-popular e-cigarette brand, may have intentionally targeted teens in schools and online.

Based on 55,000 non-public documents out of Juul Labs, the subcommittee said that Juul’s Youth Prevention Plan recruited schools into a program that put Juul representatives and students in the same room. Schools received payment for participating in the program.

According to the release, one testimony put before the Subcommittee on Economic and Consumer Policy described a Juul representative telling students that vaping was “totally safe,” and recommended that one already nicotine-addicted student use Juul.

The subcommittee also reported that Juul spent $134,000 to set up a five-week summer camp for 80 children through a charter school, according to documents obtained for the hearing. The camp was meant to be a “holistic health education program.”

Dr. Robert Jackler, Stanford University School of Medicine, testified about his conversations with Juul co-founder James Monsees, who said the use of Stanford’s tobacco advertising database was “very helpful as they designed JUUL’s advertising,” according to information provided by the subcommittee.

Screen Shot 2019 07 26 at 10.24.14 AM

“The Subcommittee found that: JUUL deployed a sophisticated program to enter schools and convey its messaging directly to teenage children; JUUL also targeted teenagers and children, as young as eight years old, in summer camps and public out-of-school programs; and JUUL recruited thousands of online ‘influencers’ to market to teens,” the memo states.

The company also turned to more modern methods. Using an influencer marketing program to “curate and identify 280 influencers in LA/NY to seed JUUL product” and find social media “buzzmakers” with “a minimum of 30,000 followers” to attend launch events for the company’s products.

Juul shut down its social media marketing program in November of last year. While it closed its Facebook and Instagram accounts, the company’s products still circulate on social media through hashtags from users themselves.

Documents delivered to the subcommittee show that Juul was aware that its prevention programs were “eerily similar” to those used by the big tobacco companies (which were ultimately forced to pay states and the U.S. government  $27.5 billion in a master settlement agreement over their marketing and sales practices).

Juul also took steps to stop selling flavored products in response to FDA criticism.

As we reported:

Juul currently sells eight different flavors of pods. Pods that don’t come in existing tobacco flavors — Virginia Tobacco, Classic Tobacco, Mint and Menthol — will only be available online effective immediately. In other words, the only place to buy Creme, Fruit, Cucumber and Mango (Juul’s most popular flavor) is on the Juul website.

There, the company verifies that customers are 21+ by either cross-referencing information, such as DOB and the last four digits of a Social Security number, with publicly available data, or asking users to upload a scan of their driver’s license.

Responding to pressure from the Food and Drug Administration, JUUL has taken other steps to limit access and curb underage use of its products.

Juul also targeted Native American populations, where smoking rates are higher than the general population. Rae O’Leary, of the Cheyenne River Sioux Tribe, testified that Juul targeted Native American tribes to use as “guinea pigs.” According to O’Leary’s testimony, in exchange for a $600,000 investment, Juul solicited tribal medical professionals to provide their devices to tribal members for free and collect information on the tribal members.

Juul declined to comment at the time of publication.

The future of car ownership: Cars-as-a-service

By Matt Burns

Car shoppers now have several new options to avoid long-term debt and commitments. Automakers and startups alike are increasingly offering services that give buyers new opportunities and greater flexibility around owning and using vehicles.

Cars-as-a-Service

In the first part of this feature, we explored the different startups attempting to change car buying. But not everyone wants to buy a car. After all, a vehicle traditionally loses its value at a dramatic rate.

Some startups are attempting to reinvent car ownership rather than car buying.

Don’t buy, lease

My favorite car blog Jalopnik said it best: “Cars Sales Could Be Heading Straight Into the Toilet.” Citing a Bloomberg report, the site explains automakers may have had the worst first half for new-vehicle retail sales since 2013. Car sales are tanking, but people still need cars.

Companies like Fair are offering new types of leases combining a traditional auto financing option with modern conveniences. Even car makers are looking at different ways to move vehicles from dealer lots.

Fair was founded in 2016 by an all-star team made up of automotive, retail and banking executives including Scott Painter, former founder and CEO of TrueCar.

Meituan, Alibaba, and the new landscape of ride-hailing in China

By Rita Liao

Instead of switching between apps to secure a ride during rush hour, people in China can now hail from different companies using a single app. Some of the country’s largest internet companies — including ride-hailing giant Didi itself — are placing bets on this type of aggregation service.

The nascent model is reminiscent of a feature Google Maps added in early 2017 allowing users to hail Uber, Lyft, Gett and Hailo straight from its navigation app. A few months later, AutoNavi, a maps app owned by Alibaba, debuted a similar feature in China. Other big names like Baidu, Hellobike, Meituan and Didi subsequently joined forces with third-party ride-booking services rather than building their own.

The trend underscores changes in China’s massive ride-hailing industry of 330 million users (in Chinese). The government is tightening rules around vehicle and driver accreditation, leading to a widescale driver shortage. Meanwhile, established carmakers including BMW and state-owned Shouqi are entering the fray, offering premium rides with better-trained fleet drivers, but they face an uphill battle with Didi, which gobbled up Uber China in 2016.

By corraling various ride-booking services, an aggregator can shorten wait time for users. For new ride-hailing players, riding on a billion-user platform like Meituan opens up wider user acquisition channels.

These ride-hailing marketplaces let users request rides from any number of third-party services available. At the end of the trip, users pay directly through the aggregator, which normally takes a commission of about 10%, although none of the players have disclosed how revenue is exactly divided with their mobility partners.

In comparison, a ride-hailing operator such as Didi charges about 20% from each trip since they take care of driver management, customer support and other dirty work which, to a great extent, helps build the moat around their business.

Here’s a look at who the aggregators are.

ICE mined driver’s license photos for facial recognition

By Zack Whittaker

U.S. Immigration and Customs Enforcement are using facial recognition software to trawl through millions of driver’s license photos provided by 21 states to search and find suspects.

News broke over the weekend that the FBI and immigration officials access images — often without obtaining a search warrant or court order — in order to identify criminal suspects but also witnesses, victims and innocent bystanders. In some cases agents would simply email the state department of motor vehicles for assistance.

But Congress nor state lawmakers ever authorized the access or the searches. A bipartisan group of congresspeople have criticized the use of facial recognition as dangerous to citizens’ right to privacy.

Several states, like New York, and the District of Columbia, allow undocumented immigrants to obtain driver’s licenses, with other states — like Florida and Texas — working to introduce similar laws.

Documents obtained by a public records request and seen by both The Washington Post and The New York Times reveal the scope of the privacy infraction. Utah alone saw close to 2,000 facial recognition searches from law enforcement agencies in the two years between 2015 and 2017.

Facial recognition remains controversial, not least because it’s been accused of racial bias and plagued with inaccuracies. The FBI’s facial recognition database contains more than 640 million images but a government watchdog reported that the agency has “not taken sufficient action to help ensure accuracy” of its system.

Earlier this year documents revealed 9,000 ICE agents have access to a massive license plate database, containing six billion vehicle detections. The database also includes a “hot list” of more than 1,100 license plates of subjects of interest, which triggers an alert every time the plates are picked up by a license plate reader.

The U.S. has thousands of automatic license plate readers (ALPR) across the country.

Drifting champion tackles Goodwood with VR, 5G and one tiny startup’s tech

By Kirsten Korosec

Stunt driver Vaughn Gittin Jr. took a Lincoln MKZ through its paces at the Goodwood Festival of Speed, drifting the vehicle and taking it up a signature hill climb. Except Gittin wasn’t in the car.

Donning a Samsung VR headset, Gittin was controlling the vehicle miles away from the Goodwood arena using a teleoperation system developed by Portland, Ore., startup Designated Driver and Vodafone’s 5G network.

The specially equipped Lincoln MKZ, dubbed the S-Drone, is sporting blacked-out windows. The eyes of the vehicle are the numerous Samsung Galaxy S10 5G phones mounted on the roof. Video is transmitted using Vodafone’s 5G network to the Designated Driver remote operating station. That’s where Gittin sits and controls the vehicle.

Samsung Goodwood Designated Driver

Typically, Designated Driver’s remote teleoperations driver would sit in front of six screens and use controls like a steering wheel and pedals to control the vehicle. This demonstration, which was held before the Goodwood event officially began Thursday, took it to the next level by adding virtual reality and the 5G network.

Gittin will stunt drive remotely on July 5 and throughout the weekend in the Goodwood Arena at FOS. Or you can watch a demonstration below.

The marketing around 5G can leave one indifferent to the technology. But 5G does hold a lot of promise for autonomous vehicles and teleoperations systems. Remote-controlling a vehicle requires instantaneous and constant flow of video and inputs from the vehicle. It simply won’t work safely or consistently if there’s even a second of lag time. A latency-free video connection is critical to properly executing such an operation.

“We’ve pioneered state of the art teleops technology by leveraging 5G,” Designated Driver CEO Manuela Papadopol said. “We’re proud to push boundaries for mobility.”

The demonstration at Goodwood aims to show how 5G can erase those concerns and become a critical technology for safety-critical applications like remote driving a vehicle. It’s also the latest test of Designated Driver’s tech. The startup recently remotely controlled a vehicle at Goodwood from its offices in Portland, Ore., some 5,000 miles and an ocean away. The company believes this was the world’s first transatlantic teleoperations demonstration.

This techcentric demonstration might seem out of place at the annual hill climb event, where human-driven vehicles wind their way through narrow hay and brick-lined passages. The future is trickling into this historic event. Last year, Roborace became the first self-driving vehicle to successfully complete the hill climb, albeit with a bit more caution than the human-driven vehicles.

BMW’s next-gen cruise control stops at red lights

By Frederic Lardinois

At its NextGen event, BMW today premiered the next generation of its adaptive cruise control system, which will be able to detect and automatically stop at red lights. This isn’t exactly autonomous driving just yet, but it’s clearly an effort to bring some of these advanced cruise control features from highway driving to a more urban environment.

The system uses the same cameras that are already built into virtually all new BMWs today and which can already detect speed limits and pass those on to the cruise control system.

In addition to the camera, the system also uses the car’s built-in navigation feature to get information about where it should expect traffic lights.

Because it’s a new software feature, BMW will be able to upgrade existing cars with this feature in the future, though it remains mum about when exactly it will launch it to customers and which cars will get it first.

I saw the system in action during a short drive in a standard 3-Series car with the software update today. It worked flawlessly in the dense urban traffic of Munich, though this was obviously a pre-planned route that even including a traffic light the company set up specifically for this demo. Whenever the car detected a red light, it gently brought the car to a stop. The car will automatically hold the car at the red light and the driver then has to tap the cruise control button to continue when the light changes to green.

While I didn’t see it in action, the system is also able to detect right and left arrows at more complex intersections and react accordingly, based on the route you programmed into your navigation system

I admit that, at least for the time being, I remain skeptical about using these kinds of level 2 automation systems in an urban environment. It’s a far more challenging and risky environment to navigate and even with these new tools, the driver still has to remain highly engaged. Outside of the urban environment, where there are obviously also plenty of traffic lights, this strikes me as a very useful feature. BMW, though, clearly believes that its system is robust enough to handle urban traffic, too.

 

Card readers at electric vehicle charging stations will weaken security, researchers say

By Zack Whittaker

Electric vehicle charging stations could become one of the next big targets for fraudsters — thanks to proposals in several state that researchers say would weaken their security.

Most electric vehicle (EV) charging stations rely solely on a credit card linked to an app or through contactless payments with RFID-enabled credit cards or through a driver’s smartphone. Contactless payments are one of the most secure ways to pay, cutting out the credit card entirely and reducing the chance that a card will be cloned or have its data skimmed. For charging stations — often in the middle of nowhere and unmonitored — relying on contactless payments can reduce device tampering and credit card fraud.

But several states are proposing EV charging stations install magnetic stripe credit card readers, which the researchers are prone to abuse by fraudsters.

Arizona, California, Nevada, Vermont, and several states across New England are said to be considering installing credit card readers at publicly funded EV charging stations.

“While these proposals may be well-intentioned, they could expose drivers to new security risks while providing cyber criminals with easy access to attractive targets,” wrote security researchers April Wright and Jayson Street, in a paper out Monday by the Digital Citizens Alliance, a nonprofit consumer group.

Instead, they say EV charging stations and other point-of-sale machines should continue to rely on contactless payment methods and lawmakers “should engage with the security community to better understand fraud risks associated with credit card readers.”

“These proposals would effectively reverse the industry’s careful considerations regarding EV charger payment options,” said the researchers.

Much of the issues fall on the continued reliance of magnetic stripe cards, which remains one of the most common payment methods in the U.S.

Where other nations, including the U.K. and most of Europe, have adopted chip-and-PIN as the primary way of paying for goods and services, the U.S. still relies on the insecure magnetic stripe. Hackers can easily skim the data off the credit card and repurpose a stolen magnetic stripe to commit fraud. Although chip-and-PIN is more secure than the magnetic stripe, card fraud remains a risk until chip-and-PIN becomes the primary method for making payments. Even with chip-enabled cards, fraudsters can still steal payment card numbers and card verification codes by using hidden pinhole cameras.

Credit card skimming is said to be a $2 billion industry.

Using mobile contactless payments, like Apple Pay or Google Pay, would largely render the risk from card skimming almost entirely moot, they say.

Until more secure options are used, the introduction of magnetic stripe readers at EV chargers “would represent an unnecessary risk” to drivers.

On the road to self-driving trucks, Starsky Robotics built a traditional trucking business

By Kirsten Korosec

More than three years ago, self-driving trucks startup Starsky Robotics was founded to solve a fundamental issue with freight — a solution that CEO Stefan Seltz-Axmacher believes hinges on getting the human driver out from behind the wheel.

But a funny thing happened along the way. Starsky Robotics started a regular ol’ trucking company. Now, nearly half of the employees at this self-driving truck startup help run a business that uses the traditional model of employing human drivers to haul loads for customers, TechCrunch has learned.

Starsky’s trucking business, which has been operating in secret for nearly two years alongside the company’s more public pursuit of developing autonomous vehicle technology, has hauled 2,200 loads for customers. The company has 36 regular trucks that only use human drivers to haul freight. It has three autonomous trucks that are driven and supported by a handful of test drivers. Starsky also employs a number of office people who, as Seltz-Axmacher notes, “know how to run trucks.”

The CEO and co-founder contends that without the human-driven trucking piece, Starsky won’t ever have an operational, or profitable, self-driving truck business. The trucking business has generated revenue, led to key partnerships such as Schneider Logistics, Penske and Transport Enterprise Leasing, and importantly, helped build a company that works in the real world. It has also been a critical tool for recruiting and vetting safety drivers and teleoperators (or remote drivers), according to Seltz-Axmacher.

“The decision to have a trucking business interact with the real trucking world in parallel with developing the robotics piece is a necessary part of building a longstanding business in the space,” said Reilly Brennan, general partner at Trucks VC and the first institutional investor in Starsky.

Starksy, which was co-founded by Seltz-Axmacher and Kartik Tiwari, has raised $21.7 million in equity from investors including Shasta Ventures and Trucks VC.

The evolution over at Starsky illustrates the challenge that awaits the autonomous vehicle industry and the giant companies and startups operating within it. Even after engineers solve the complexity of building an AI-powered driver that’s better than a human, these companies must figure out the equally intricate task of operations. Robotaxis, autonomous delivery robots and self-driving trucks won’t matter if humans don’t use, like or trust the tech.

Figuring out the basics of operations — including the rather pedestrian and obvious ones — will mean the difference between making or losing money. Or, having a business at all.

And the stakes are high. Trucks are the backbone of the U.S. economy and moved more than 70% of all U.S. freight and generated more than $700 billion in 2017, according to the most up-to-date statistics available from the American Trucking Associations (ATA).

Companies pursuing robotaxis and other autonomous vehicle programs are going to eventually wake up — if they haven’t already — to the same realities that Starsky has accepted, Brennan contends.

“The interaction with the market, particularly in logistics, is vital,” Brennan said, adding that companies pursuing robotaxis that haven’t built out and tested a consumer-facing app risk the same problems. “They need to have a business on day one, not on day 720.”

For Starsky, it started with something as basic as having a working vehicle and access to mechanics that could fix it.

Trucks, the hard way

Seltz-Axmacher admits now he underestimated how difficult trucks could be.

“Hey, it’s a truck, how hard can buying one be?,” said Seltz-Axmacher, as he described the company’s first major purchase of a truck for about $50,000. “We quickly realized that having a truck and driving a truck are not easy things to do.”

Starsky engineers retrofitted the truck, named Rosebud, with its autonomous driving system and made plans to test it at the Thunderhill Raceway about 150 miles north of San Francisco. It didn’t make it. The truck’s engine was smoking by the time it crossed the Bay Bridge. And then the truck, along with all those engineers, sat for two weeks while Seltz-Axmacher hunted for a diesel mechanic.

Self-driving truck startup Starsky Robotics began with this first, and problematic truck

The truck, pictured above, continued to break down. The company ran into more snafus, including a problem with insurance and the title of the vehicle. Starsky was going to miss a key milestone and Seltz-Axmacher was going to have to tell investors that it wasn’t because of bottlenecks in engineering, but because they didn’t know how to manage the truck part of this self-driving truck company.

The founders learned that even “average” trucks needed to go to the shop every 60 days, which is operationally complex when vehicles are traveling throughout the United States.

Starsky ended up making a key hire, Paul Schlegel, who is a veteran of trucking operations, to organize the enterprise. Schlegel, who has 32 years in the transportation industry with companies such as Schneider National and Stevens Transport, developed the trucking business that enabled autonomous trucks, but still worked in their absence. The trucking operations team is in Dallas. 

The driver pinchpoint

Seltz-Axmacher has said repeatedly that “unless you’re getting the driver out of the truck, you’re not solving anything.”

The problem in trucking is the supply of drivers. The chronic shortage has, in turn, driven up costs. For instance, the median salary for a truckload driver working a national, irregular route was more than $53,000 — a $7,000 increase from ATA’s last survey, which covered annual pay for 2013, or an increase of 15%. It’s even higher for private fleet drivers, who saw their pay rise to more than $86,000 from $73,000, or a gain of nearly 18%.

Starksy soon found that finding the right drivers was just as hard as finding the right trucks. The Federal Motor Carrier Safety Administration shows the company has reported three crashes of its manually driven trucks.

Seltz-Axmacher said they’ve had a driver make a wrong turn and have a low-hanging branch rip a hole in the side of a trailer. The most serious incident involved a new driver who took an offramp in Florida too fast and rolled the truck onto its side. No one was injured and the driver was terminated.

These drivers are critical to the autonomous program and the best of them end up becoming teleop controllers, a job that involves sitting in an office, not logging days and weeks in a truck.

Starsky is taking a dual approach to its autonomous trucks. It outfits regular trucks with a combination of sensors like radar and cameras along with software that allows long-haul trucks to drive autonomously on the highway. When the truck is about to exit, a trained remote operator, who is sitting in an office, takes over and navigates the truck to its final destination.

The promise of being able to be promoted to teleoperator is a big part of how Starsky is able to hire drivers effectively. The company contends it wouldn’t be possible to find 25 highly skilled safety and remote drivers without having a broader fleet of regular truck drivers to choose from.

Robotrucks or bust

The ultimate goal of Starsky Robotics hasn’t changed, Seltz-Axmacher said. To get there, the company recently hired Ain McKendrick as vice president of engineering, and former Tesla executive Keith Flynn to head up its hardware manufacturing to support Starsky’s fleet build. McKendrick, who co-founded Podtek and Lyve, also has experience at autonomous vehicle company Cyngn, Highfive, Netflix and Dell .

By early 2020, the company aims to have 25 autonomous trucks — a goal that is only possible if it has 100 regular trucks, he added.

The only way Starsky can scale its operations on the autonomous side is to continue to scale its regular trucking operations six months in advance. In other words, the regular trucking business is inextricably linked to the success of deploying autonomous trucks.

The company has already found that the 15-plus brokers that are regularly giving it freight to haul are ready for driverless trucks.

“Many times the brokers who have given us loads have been fairly ambivalent to whether or not we’re hauling that freight with a self-driving truck, Seltz-Axmacher said. “A lot of the concern that people might have is that this is a technology-averse industry and might not be willing to accept self-driving trucks has proven not to be true.”

GM is opening up Super Cruise hands-free driving system to more roads

By Kirsten Korosec

GM’s hands-free driver assistance system Super Cruise, has been lauded for its capabilities. But it’s also been criticized because of its severe limitations. So far, it’s only available in one Cadillac model, the full-size CT6 sedan, and its use is restricted to certain divided highways.

That’s starting to change.

GM’s luxury brand Cadillac said Wednesday that it is expanding Super Cruise through a software update that will add another 70,000 miles of compatible divided highways in the United States and Canada. By the end of the year, Super Cruise will be available on more than 200,000 miles of highways.

The expansion follows other improvements rolled out last year, including adding a dynamic lane offset so that a CT6 with Super Cruise activated can adjust slightly over in its lane for driver comfort when passing large vehicles. Gauge cluster messages were also added, to inform drivers why Super Cruise may be not be available in certain instances.

Super Cruise uses a combination of lidar map data, high-precision GPS, cameras and radar sensors as well as a driver attention system, which monitors the person behind the wheel to ensure they’re paying attention. Unlike Tesla’s Autopilot semi automation driver assistance system, users of Super Cruise do not need to have their hands on the wheel. However, their eyes must remain directed straight ahead.

It’s an important update for GM and the Super Cruise technology. Although GM taking a cautious-first approach, still has constraints on the system.

Some of the divided highways added will include limited intersections and traffic control devices. In the cases of railroad crossings, pedestrian crossings, stoplights or stop signs, Super Cruise will alert drivers to take back control of the vehicle, Cadillac said.

GM super cruise map 2019

 

Super Cruise will soon be available to folks beyond owners of the Cadillac CT6.  Starting in 2020, Cadillac  will start to offer Super Cruise on every Cadillac model.

GM said last year that the SuperCruise system will start hitting its other brands such as Chevrolet, GMC, and Buick after 2020.

It should be noted that the software update can’t be done wirelessly or “over the air.” Instead, owners have to take to take their vehicles to the dealership for the update, which will include performance improvements and enhancements to the driver attention system that ensures the person behind the wheel is paying attention.

Once the software update is complete, the new, additional map miles will be sent to customer vehicles over the air throughout the summer and fall.

Ferrari’s first plug-in hybrid is here — and it’s faster than ever

By Kirsten Korosec

Ferrari has finally cracked open the door for electrification. The Italian supercar manufacturer unveiled the SF90 Stradale, its first plug-in hybrid.

Purists might turn their noses up to Stradale’s mere 15.5 miles of all electric range. But it’s a milestone for Ferrari nonetheless and marks a shift in the company’s views and portfolio.

Now, some of the important nuts and bolts. The Stradale has a V8 turbo engine that produces 780 cv (or about 769 horsepower), which the company says is the highest power output of any 8-cylinder Ferraris in its history. Another 216 hp is produced by three electric motors. The motors are located between the engine and 8-speed dual clutch transmission on the rear axle, and two on the front axle.

When combined, the vehicle can travel from 0 to 62 miles per hour in 2.5 seconds.

You can check out the video below to see the supercar in action. Wait — and listen — for the moment when the driver switches to electric power.

The driver can place the Stradale in eDrive mode — Ferrari’s branding for all-electric mode. When the internal combustion engine is turned off, the two independent front motors can deliver a maximum speed of about 83 mph. That’s slow compared to car’s top speed of 211 mph, which is achieved when the combustion engine is activated. Reverse only uses eDrive mode.

The #FerrariSF90Stradale marks a new chapter in #Ferrari history with the introduction of our first series production PHEV delivering 1,000 cv and a maximum speed of 340 km/h.

Discover more at https://t.co/oGC6j9Yemf pic.twitter.com/O3D7yN8WNe

— Ferrari USA (@FerrariUSA) May 29, 2019

The default setting for the Stradale is to run as a hybrid. The vehicle can also has a performance setting, a mode that keeps the internal gas engine running because the priority is more on charging the battery than on efficiency. This mode gives the driver instant and full power.

Then there’s the tech inside the vehicle. The aeronautically cockpit has a head-up display unit that projects information on the front windscreen and in driver’s field of view. Ferrari has adopted a “hands on the wheel” philosophy in its design. The touch controls are on the steering wheel, which includes a small touch pad on the right hand. Voice and cruise controls are on the left-hand spoke of the wheel.

Ferrari has also taken design cues from Formula 1. For instance, the rotary switch for cruise control is a solution derived directly from the Formula 1 car.

Ferrari hasn’t released details on the price yet, nor has it provided information on when the Stradale is coming to market.

Brooklyn and Queens are now flush with 1,000 of Revel’s shared electric mopeds

By Kirsten Korosec

Revel Transit has released 1,000 of its shared electric mopeds onto the streets of Brooklyn and Queens, following the end of a nine-month pilot program in the area.

The New York-based startup pulled the original 68 mopeds it used in its limited pilot and has replaced them with new models (and hundreds more of them) built for two riders and equipped with kickstands for parking.

Revel has expanded the service as well. The pilot restricted moped movement to the Bushwick, Williamsburg or Greenpoint neighborhoods. Now, the Revel mopeds will be available in more than 20 neighborhoods in Brooklyn and Queens.

“During the nine-month pilot, we learned what worked well, what needed fixing and what users wanted from the service going forward,” Revel co-Founder and CEO Frank Reig said in a release.

Venture firm Maniv Mobility led Revel’s seed round. The company has raised $4.5 million, according to PitchBook.

The deluge of Revel mopeds comes amid a larger debate about access to transportation within New York and a specific discussion over electric stand-up scooters. Technically, scooters like the ones rented out by startups Bird and Lime are illegal in New York City.

Officials worry about safety in a crowded city, particularly Manhattan, millions of pedestrians, cyclists and cars are already jostling for space.

Before gaining access to the service, users must register on the Revel app using their driver’s license and paying a one-time $19 fee to cover a motor vehicle license check. Once approved, riders can use the app to find and unlock the nearest moped.

The mopeds, which are safety certified by the U.S. Department of Transportation and registered with the New York Department of Motor Vehicles, include insurance and a helmet.

Revel, which has opened a new 10,000-square foot operations facility in Red Hook, is also introducing a new pricing structure as part of its commercial launch. Revel used to charge a flat rate of $4 for the first 20 minutes, with an additional $0.25-per-minute charge and $0.05 a minute to pause the ride.

Under the new pricing structure, riders pay $1 to start a ride and $0.25 per minute after a free first-minute grace period, which is meant to give riders a chance to secure their helmet. If a ride includes passenger, the initial cost is $2. Riders can pause their ride for $0.10 per minute.

Revel will cut the cost by 40 percent for riders who use public assistance programs like SNAP or live in NYCHA housing.

Uber will start deactivating riders with low ratings

By Megan Rose Dickey

Uber is now requiring the same good behavior from riders that it has long expected from its drivers. Uber riders have always had ratings, but they were never really at risk of deactivation — until now. Starting today, riders in the U.S. and Canada are now at risk of deactivation if their rating falls significantly below a city’s average.

“Respect is a two-way street, and so is accountability,” Uber Head of Safety Brand and Initiatives Kate Parker wrote in a blog post. “Drivers have long been required to meet a minimum rating threshold which can vary city to city. While we expect only a small number of riders to ultimately be impacted by ratings-based deactivations, it’s the right thing to do.”

For drivers, they face a risk of deactivation if they fall below 4.6, according to leaked documents from 2015. Though, average ratings are city-specific. Uber, however, is not disclosing the average rider rating, but says “any rider at risk of losing access will receive several notifications and opportunities to improve his or her rating,” an Uber spokesperson told TechCrunch.

For example, Uber will offer tips to riders around encouraging polite behavior and keeping the car clean.

“Ultimately, we expect this to impact only a very small number of riders,” the spokesperson said.

This is part of Uber’s refreshed community guidelines, which will appear front and center on the Uber app and require confirmation of acknowledgment.

The all-electric Honda e is bringing its side view mirrors inside

By Kirsten Korosec

Honda e, the compact electric vehicle that’s coming to market in spring 2020, is bringing its side view mirrors inside. The company confirmed Tuesday that its side camera mirror system, which was on the prototype version, will be a standard feature when the car enters production. 

The side camera mirror system includes two six-inch screens, situated on the left and right sides of the dashboard, provides live images of traffic. Honda argues that the tech reduces aerodynamic drag by 90 percent compared to conventional door mirrors for an overall 3.8 percent improvement for the entire vehicle. This, in turn, can help with the battery’s efficiency and range.

The mirrors also improve visibility, Honda says, adding that the camera unit housings are shaped to prevent water drops on the lens. The lens has a water-repellent coating to prevent residual water build up.

You can check out how it works in the video below.

The driver can choose two views, normal and wide, via the vehicle settings. The two views extends the field of vision and helps reduce blind spots by about 10 percent in normal and about 50 percent when using the wide option, Honda claims.

If the driver, puts the vehicle in reverse, guidelines appear on the side view screens. As lighting conditions change, the brightness levels on the interior displays adjust.

Honda also has confirmed that the pop out door handles will be in the production version.

Honda e Prototype

The automaker has big plans for the Urban EV, officially named the Honda e, and more broadly electric vehicles. The Honda e is expected to have a battery range of more than 124 miles and come equipped with a “fast charge” capability that will provide a 80 percent change in 30 minutes.

Way back in 2017, Honda Motor Co. president and CEO Takahiro Hachigo emphasized that the Urban EV wasn’t some “vision of the distant future.”

Honda plans to bring electrification, which can mean hybrid, plug-in or all-electric, to every new car model launched in Europe. The automaker is aiming for two-thirds of European sales to feature electrified technology by 2025.

The production version of the Honda e will be unveiled later this year.  Customers can make a reservation for priority ordering online in the UK, Germany, France and Norway or register their interest in other European markets on the Honda national websites.

Nigeria’s Gokada raises $5.3M round for its motorcycle ride-hail biz

By Jake Bright

In many large cities across Africa, motorcycle taxies are as common as yellow-cabs in New York.

That includes Lagos, Nigeria, where ride-hail startup Gokada has raised a $5.3 million Series A round to grow its two-wheel transit business.

Gokada has trained and on-boarded over 1000 motorcycles and their pilots on its app that connects commuters to moto-taxis and the company’s signature green, DOT approved helmets.

The startup has completed nearly 1 million rides since it was co-founded in 2018 by Fahim Saleh—a Bangladeshi entrepreneur who previously founded and exited Pathao, a motorcycle, bicycle, and car transportation company.

For Gokada’s Series A, Rise Capital led the investment joined by Adventure Capital, IC Global Partners, and Illinois based First MidWest Group. Coinciding with the round, Nigerian investor and Jobberman founder Ayodeji Adewunmi will join Gokada as co-CEO.

Gokada will use the financing to increase its fleet and ride volume, while developing a network to offer goods and services to its drivers. “We’re going to start a Gokada club in each of the cities with a restaurant where drivers can relax, and we’ll experiment with a Gokada Shop, where drivers can get things they need on a regular basis, such as plantains, yams, and rice,” Saleh told TechCrunch.

The startup differs from other ride-hail ventures in that it doesn’t split fare revenue with drivers. Gokada charges drivers a flat-fee of 3000 Nigerian Naira a day (around $8) to work on their platform. The company is looking to generate a larger share of its revenue from building a commercial network around its rider community.

“We don’t do anything with the fares. We want to create an Amazon prime type membership…and ecosystem around the driver where we’re going to provide them more and more services, such as motorcycle insurance, maintenance, personal life-insurance, micro-finance loans,” Saleh said.

“We’re trying to provide a network of great services for our drivers that makes them stick with us, and not necessarily see a reason to switch to other platforms,” said Saleh.

Competition among those platforms is heating up, as global players enter Africa’s motorcycle taxi market and local startups raise VC and expand to new countries.

Uber began offering a two-wheel transit option in East Africa in 2018, around the same time Bolt (previously Taxify) started motorcycle taxi service in Kenya.

Rwanda has motorbike taxi startups SafeMotos and Yegomoto. Uganda based motorcycle ride-hail company Safeboda expanded into Kenya in 2018 and this month raised a Series B round of an undisclosed amount co-led by the venture arms of Germany’s Allianz and Indonesia’s GoJek.

Safeboda will use the round to further expand in East Africa and Nigeria in the near future, the startup’s CEO Maxime Diedonne confirmed to TechCrunch.

In Nigeria, Gokada faces a competitor in local startup MAX.ng, which offers mobile based passenger and logistics delivery services.

Overall, Africa’s motorcycle taxi market is becoming a significant sub-sector in the continent’s e-transport startup landscape. Two-wheel transit startups are vying to digitize a share of Africa’s boda boda and okada markets (the name for motorcycle taxis in East and West Africa)—representing a collective revenue pool of $4 billion and expected to double to $9 billion by 2021, according to a TechSci study.

“There is a formalization of an informal sector play here…to make it safer and higher quality,” Gokada investor Nazar Yasin of Rise Capital told TechCrunch.

The appeal to passengers is the lower cost of motorbike transit compared to buses or cabs ($1.85 is Gokada’s average fare) and the ability of two-wheelers to cut through the heavy congestion in cities such as Lagos and Nairobi.

A notable facet of motorcycle ride-hail companies in Africa is better organizing a space with a reputation for being somewhat chaotic and downright dangerous (see Nigeria’s past bans on the sector entirely due to safety).

For Gokada that includes training courses and certification of riders, the ability to track trips and safety stats from the app, and quality control for motorcycles—something that’s been lacking in East and West Africa’s non-digital moto-taxi space.

The company’s rider program offers a way for drivers to buy, own, and maintain their motorcycles as they earn. Gokada has entered into partnership with Indian motorcycle maker TVS Motors to create a custom version of the company’s TVS Apache motorcycles for Gokada drivers.

Gokada is also experimenting with adding sensors to its fleet to better track safety standards. “We’re looking at seat sensors and another GPS sensor to track things like ‘did this driver add more than one passenger on the bike’ and all that data will feed back into our servers,” Saleh said.

The company won’t enter any new countries in Africa in the near future. “We plan to expand all over Nigeria. We think it’s a large enough market for now,” said Gokada CEO Fahim Saleh. Nigeria is Africa’s most populous nation (190 million) and largest economy.

Elon Musk’s Boring Company lands $48.7M contract for underground ‘people mover’ in Las Vegas

By Kirsten Korosec

The Boring Company (TBC), Elon Musk’s tunneling and transportation startup, has landed a $48.7 million project to shuttle people in an underground Loop system around the Las Vegas Convention Center.

This is the company’s first commercial contract.

The initial design for the project, dubbed Campus Wide People Mover, or CWPM, will focus on the Las Vegas Convention Center, which is currently in the midst of an expansion that is expected to be completed in time for CES 2021. The newly expanded Las Vegas Convention Center will span about 200 acres once completed. The Las Vegas Convention and Visitors Authority (LVCVA)estimates that people walking the facility would travel two miles from one end to the other, a distance that prompted officials to find a transportation solution.

In March, the LVCVA recommended that the Boring Company be selected. The board of the LVCVA voted Wednesday to approve the contract.

The approval comes with numerous strings and requires TBC to achieve specific milestones, details of which The Guardian published earlier this month. The contract withholds over two-thirds of payments until construction is complete, and requires TBC to meet specific ridership goals.

The LVCVA estimated an initial $1.2 million outlay to TBC in fiscal year 2019, following by $15 million in 2020 and the final $32.47 million in 2021.

While the project is limited for now, TBC has said in the past that the project could someday connect downtown, the Las Vegas Convention Center, the Las Vegas Boulevard Resort Corridor and McCarran International Airport.

This underground people mover will involve the construction of twin tunnels for vehicles and one pedestrian tunnel, according to contract documents. The twin tunnels are expected to be less than a mile. There will be three underground stations for passenger loading and unloading and an elevator or escalator system for passenger access to each station.

The people mover, once completed, is supposed to whisk people between stops at high speeds in modified electric Tesla vehicles. The contract describes these as autonomous vehicles. (Today, Tesla vehicles are not self driving, and instead have an advanced driver assistance system that handles certain tasks on highways such as lane steering and adaptive cruise control.) Before it opens to the public, the contract dictates that TBC test the system for three months.

As Musk’s Boring Company lands one contract, safety concerns have been raised on the design of another more ambitious Loop system from Washington, D.C. to Baltimore.

Details of the 35.3-mile system, which emerged recently in a 505-page draft environmental assessment, reveals a design that fails to meet several key national safety standards. The underground system appears to lack sufficient emergency exits, ignore the latest engineering practices and proposes passenger escape ladders that one fire safety professor calls “the definition of insanity.”

A young entrepreneur is building the Amazon of Bangladesh

By Jon Russell

At just 26, Waiz Rahim is supposed to be involved in the family business, having returned home in 2016 with an engineering degree from the University of Southern California. Instead, the young entrepreneur is plotting to build the Amazon of Bangladesh.

Deligram, Rahim’s vision of what e-commerce looks like in Bangladesh, a country of nearly 180 million, is making progress, having taken inspiration from a range of established tech giants worldwide, including Amazon, Alibaba and Go-Jek in Indonesia.

It’s a far cry from the family business. That’s Rahimafrooz, a 55-year-old conglomerate that is one of the largest companies in Bangladesh. It started out focused on garment retail, but over the years its businesses have branched out to span power and energy and automotive products while it operates a retail superstore called Agora.

During his time at school in the U.S., Rahim worked for the company as a tech consultant whilst figuring out what he wanted to do after graduation. Little could he have imagined that, fast-forward to 2019, he’d be in charge of his own startup that has scaled to two cities and raised $3 million from investors, one of which is Rahimafrooz.

Deligram CEO Waiz Rahim [Image via Deligram]

“My options after college were to stay in U.S. and do product management or analyst roles,” Rahim told TechCrunch in a recent interview. “But I visited rural areas while back in Bangladesh and realized that when you live in a city, it’s easy to exist in a bubble.”

So rather than stay in America or go to the family business, Rahim decided to pursue his vision to build “a technology company on the wave of rising economic growth, digitization and a vibrant young population.”

The youngster’s ambition was shaped by a stint working for Amazon at its Carlsbad warehouse in California as part of the final year of his degree. That proved to be eye-opening, but it was actually a Kickstarter project with a friend that truly opened his mind to the potential of building a new venture.

Rahim assisted fellow USC classmate Sam Mazumdar with Y Athletics, which raised more than $600,000 from the crowdsourcing site to develop “odor-resistant” sports attire that used silver within the fabric to repel the smell of sweat. The business has since expanded to cover underwear and socks, and it put Rahim’s mind to work on what he could do by himself.

“It blew my mind that you can build a brand from scratch,” he said. “If you are good at product design and branding, you could connect to a manufacturer, raise money from backers and get it to market.”

On his return to Bangladesh, he got Deligram off the ground in January 2017, although it didn’t open its doors to retailers and consumers until March 2018.

E-commerce through local stores

Deligram is an effort to emulate the achievements of Amazon in the U.S. and Alibaba in China. Both companies pioneered online commerce and turned the internet into a major channel for sales, but the young Bangladeshi startup’s early approach is very different from the way those now hundred-billion-dollar companies got started.

Offline retail is the norm in Bangladesh and, with that, it’s the long chain of mom and pop stores that account for the majority of spending.

That’s particularly true outside of urban areas, where such local stores almost become community gathering points, where neighbors, friends and families run into each other and socialize.

Instead of disruption, working with what is part of the social fabric is more logical. Thus, Deligram has taken a hybrid approach that marries its regular e-commerce website and app with offline retail through mom and pop stores, which are known as “mudir dokan” in Bangladesh’s Bengali language.

A customer can order their product through the Deligram app on their phone and have it delivered to their home or office, but a more popular — and oftentimes logical — option is to have it sent to the local mudir dokan store, where it can be collected at any time. But beyond simply taking deliveries, mudir dokans can also operate as Deligram retailers by selling through an agent model.

That’s to say that they enable their customers to order products through Deligram even if they don’t have the app, or even a smartphone — although the latter is increasingly unlikely with smartphone ownership booming. Deligram is proactively recruiting mudir dokan partners to act as agents. It provides them with a tablet and a physical catalog that their customers can use to order via the e-commerce service. Delivery is then taken at the store, making it easy to pick up, and maintaining the local network.

“We’ll tell them: ‘Right now, you offer a few hundred products, now you have access to 15,000,’ ” the Deligram CEO said.

Indeed, Rahim sees this new digital storefront as a key driver of revenue for mudir dokan owners. For Deligram, it is potentially also a major customer acquisition channel, particularly among those who are new to the internet and the world of smartphone apps.

This offline-online model — known by the often-buzzy industry term “omnichannel” — isn’t new, but in a world where apps and messaging is prevalent, reaching and retaining users is challenging, particularly in emerging markets.

“It’s not easy to direct people to a website today, and the app-first approach has made it hard,” Rahim said. “We looked at how companies in Indonesia and India overcame these challenges.”

In particular, he studied the work of Go-Jek in Indonesia, which uses an agent model to push its services to nascent internet users, and Amazon India, which leans heavily on India’s local “kirana” stores for orders and deliveries.

In Deligram’s case, the mudir dokan picks up sales commission as well as money for every delivery that is sent to their store. Home deliveries are possible, but the lack of local infrastructure — “turn right at the blue house, left at the white one, and my place is third from the left,” is a common type of direction — makes finding exact locations difficult and inefficient, so an additional cost is charged for such requests.

E-commerce startups often struggle with last-mile because they rely on a clutch of logistics companies to fulfill orders. In a rare move for an early-stage company, Deligram has opted to run its entire logistics process in-house. That obviously necessitates cost and likely provides significant growing pains and stress, but, in the long term, Rahim is betting that a focus on quality control will pay out through higher customer service and repeat buyers.

A prospective Deligram customer flips through a hard copy of the company’s product brochure in a local store [Image via Deligram]

Startups on the rise in Bangladesh

Rahim’s timing is impeccable. He returned to Bangladesh just as technology was beginning to show the potential to impact daily life. Bangladesh has posted a 7% rise in GDP annually every year since 2016, and with an estimated 80 million internet users, it has the fifth-largest online population on the planet.

“We are riding on a lot of macro trends; we’re among the top five based on GDP growth and have the world’s eighth-largest population,” Rahim told TechCrunch. “There are 11 million people in middle income — that’s growing — and our country has 90 million people aged under 30.”

“An index to track the growth of young people would be [capital city] Dhaka… you can just see the vibrancy with young people using smartphones,” he added.

That’s an ideal storm for startups, and the country has seen a mix of overseas entrants and local ventures pick up speed. Alibaba last year acquired Daraz, the Rocket Internet-founded e-commerce service that covers Pakistan, Bangladesh, Myanmar, Sri Lanka and Nepal, while the Chinese giant also snapped up 20% of bKash, a fintech venture started from Brac Bank as part of the regional expansion of its Ant Financial affiliate.

Uber, too, is present, but it is up against tough local opposition, as is the norm in Asian markets.

That’s because Bangladesh’s most prominent local startups are in ride-hailing. Pathao raised more than $10 million in a funding round that closed last year and was led by Go-Jek, the Indonesia-based ride-hailing firm valued at more than $9 billion that’s backed by the likes of Tencent and Google. Pathao is reportedly on track to raise a $50 million Series B this year, according to Deal Street Asia.

Pathao is one of two local companies that competes alongside Uber in Bangladesh [Image via Pathao]

Its chief rival is Shohoz, a startup that began in ticketing but expanded to rides and services on-demand. Shohoz raised $15 million in a round led by Singapore’s Golden Gate Ventures, which was announced last year.

Deligram has also pulled in impressive funding numbers, too.

The startup announced a $2.5 million Series A raise at the end of March, which Rahim wrote came from “a network of institutional and angel investors;” such is the challenge of finding a large check for a tech play in Bangladesh. The investors involved included Skycatcher, Everblue Management and Microsoft executive Sonia Bashir Kabir. A delighted Rahim also won a check from Rahimafrooz, the family business.

That’s not a given, he said, admitting that his family did initially want him to go to work with their business rather than pursuing his own startup. In that context, contributing to the round is a major endorsement, he said.

Rahimafrooz could be a crucial ally in future fundraising, too. Despite an improving climate for tech companies, Bangladesh’s top startups are still finding it tough to raise money, especially with overseas investors that can write the larger checks that are required to scale.

“I think the biggest challenge is branding. Every time I speak with new investors, I have to start by explaining where Bangladesh is, or the national metrics, not even our business,” Pathao CEO Hussain Elius told TechCrunch.

“There’s a legacy issue. Bangladesh seems like a country which floods all the time and the garment sector going down — that’s a part of the story but not the full story. It’s also an incredible country that’s growing despite those challenges,” he added.

Pathao is reportedly on track to raise a $50 million Series B this year, according to Deal Street Asia. Elius didn’t address that directly, but he did admit that raising growth funding is a bigger challenge than seed-based financing, where the Bangladesh government helps with its own fund and entrepreneurial programs.

“It’s hard for us as we’re the first ones out there, but it’ll be easier for the ones who’ll follow on,” he explained.

Still, there are some optimistic overseas watchers.

“We remain enthusiastic about the rapidly expanding set of opportunities in Bangladesh,” said Hian Goh, founding partner of Singapore-based VC firm Openspace — which invested in Pathao.

“The country continues to be one of the fastest-growing economies in the world, underpinned by additional growth in its garments manufacturing sector. This has blossomed into an expanding middle class with very active consumption behavior,” Goh added.

Growth plans

With the pain of fundraising put to the side for now, the new money is being put to work growing the Deligram business and its network into more parts of Bangladesh, and the more challenging urban areas.

Geographically, the service is expanding its agent reach into five more cities to give it a total of seven locations nationwide. That necessitates an increase in logistics and operations to keep up with, and prepare for, that new demand.

Deligram workers in one of the company’s warehouses [Image via Deligram]

Rahim said the company had handled 12,000 orders to date as of the end of March, but that has now grown past 20,000 indicating that order volumes are rising. He declined to provide financial figures, but said that the company is on track to increase its monthly GMV volume by six-fold by the end of this year. Electronics, phones and accessories are among its most popular items, but Deligram also sells apparel, daily items and more.

Interestingly, and perhaps counter to assumptions, Deligram started in rural areas, where Rahim saw there was less competition but also potentially more to learn through a more early-adopter customer base. That’s obviously one major challenge when it comes to growth, and now the company is looking at urban expansion points.

On the product side, Deligram is in the early stages of piloting consumer financing using its local store agents as the interface, while Rahim teased “exciting IOT R&D projects” that he said are in the planning stage.

Ultimately, however, he concedes that the road is likely to be a long one.

“Over the last 18-20 years, modern retail hasn’t made much progress here,” Rahim said. “It accounts for around 2.5% of total retail, e-commerce is below 1% and the long tail local stores are the rest.”

“People will eventually shift, but I think it’ll take five to eight years, which is why we provide the convenience via mom and pop shops,” he added.

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