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Wednesday, January 29, 2020

Today Crunch News, News Updates, Tech News

Today Crunch News, News Updates, Tech News


Facebook will pay $550 million to settle class action lawsuit over privacy violations

Posted: 29 Jan 2020 04:34 PM PST

Facebook will pay over half a billion dollars to settle a class action lawsuit that alleged systematic violation of an Illinois consumer privacy law. The settlement amount is large indeed, but a small fraction of the $35 billion maximum the company could have faced.

Class members — basically Illinois Facebook users from mid-2011 to mid-2015 — may expect as much as $200 each, but that depends on several factors. If you’re one of them you should receive some notification once the settlement is approved by the court and the formalities are worked out.

The proposed settlement would require Facebook to obtain consent in the future from Illinois users for such purposes as face analysis for automatic tagging.

This is the second major settlement from Facebook in six months; an seemingly enormous $5 billion settlement of FTC violations was announced over the summer, but it’s actually a bit of a joke.

The Illinois suit was filed in 2015, alleging that Facebook collected facial recognition data on images of users in the state without disclosure, in contravention of the state’s 2008 Biometric Information Privacy Act (BIPA). Similar suits were filed against Shutterfly, Snapchat, and Google.

Facebook pushed back in 2016, saying that facial recognition processing didn’t count as biometric data, and that anyway Illinois law didn’t apply to it, a California company. The judge rejected these arguments with flair, saying the definition of biometric was “cramped” and the assertion of Facebook’s immunity would be “a complete negation” of Illinois law in this context.

Facebook was also suspected at the time of heavy lobbying efforts towards defanging BIPA. One state senator proposed an amendment after the lawsuit was filed that would exclude digital images from BIPA coverage, which would of course have completely destroyed the case. It’s hard to imagine such a ridiculous proposal was the suggestion of anyone but the industry, which tends to regard the strong protections of the law in Illinois as quite superfluous.

As I noted in 2018, the Illinois Chamber of Commerce proposed the amendment, and a tech council there was chaired by Facebook’s own Manager of State Policy at the time. Facebook told me then that it had not taken any position on the amendment or spoken to any legislators about it.

2019 took the case to the 9th U.S. Circuit Court of Appeals, where Facebook was again rebuffed; the court concluded that “the development of face template using facial-recognition technology without consent (as alleged here) invades an individual's private affairs and concrete interests. Similar conduct is actionable at common law.”

Facebook’s request for a rehearing en banc, which is to say with the full complement of judges there present, was unanimously denied two months later.

At last, after some 5 years of this, Facebook decided to settle, a representative told TechCrunch, “as it was in the best interest of our community and our shareholders to move past this matter.” Obviously it admits to no wrongdoing.

The $550 million amount negotiated is “the largest all-cash privacy class action settlement to date,” according to law firm Edelson PC, one of three that represented the plaintiffs in the suit.

“Biometrics is one of the two primary battlegrounds, along with geolocation, that will define our privacy rights for the next generation,” said Edelson PC founder and CEO Jay Edelson in a press release. “We are proud of the strong team we had in place that had the resolve to fight this critically important case over the last five years. We hope and expect that other companies will follow Facebook's lead and pay significant attention to the importance of our biometric information.”

Tesla to begin deliveries of Model Y by end of first quarter

Posted: 29 Jan 2020 03:40 PM PST

Tesla said Wednesday that production of the Model Y started this month with the first deliveries of the all-electric compact crossover to begin by the end of the first quarter as the company pushes to extend its profitability streak.

Production of the Model Y is at limited volume for now, CEO Elon Musk said during a call after earnings were released. Musk added that Tesla’s engineers have been able to increase the maximum EPA range of the all-wheel drive version of the Model Y to 315 miles. It was previously estimated at 280 miles.

Tesla reported Wednesday net income of $105 million, or 56 cents a diluted share, compared with $140 million, or 78 cents a share, in the same year-ago period. Tesla reported revenue of $7.38 billion, 17% higher than the third quarter, but just 1% higher than the $7.2 billion generated in the fourth quarter of 2018.

Tesla indicated in its fourth quarter report that it will turn to China and Model Y for revenue growth as deliveries of its higher profit margin Model X and Model S decrease. Tesla delivered 19,475 Model S and Model X in the fourth quarter, a 29% decline from the same period last year. Meanwhile, deliveries of Tesla’s cheaper Model 3 vehicle continued to climb. Tesla delivered 92,620 Model 3 vehicles in the fourth quarter, a 46% increase from the same period in 2018.

The Model Y is being produced at Tesla’s Fremont, Calif. factory, settling a long-running discussion within the company over where to build the upcoming vehicle. Tesla had also looked at producing the vehicle at its massive factory in Sparks, Nev., where it currently builds battery packs and electric motors.

Tesla said it will ramp up production of the Model Y gradually as it adds machinery through mid-2020. Once these expansions are done, installed combined Model 3 and Model Y capacity should reach 500,000 units
per year, the company said.

Tesla intends to eventually produce the Model Y in China, as well. The company’s Shanghai factory has capacity to produce 150,000 Model 3 vehicles. Tesla has broken ground on the next phase of its Shanghai factory, which will produce the Model Y.

“Given the popularity of the SUV vehicle segment, we are planning for Model Y capacity to be at least equivalent to Model 3 capacity,” the company said.

NASA finds real uses for VR and AR in astronomy and engineering

Posted: 29 Jan 2020 03:24 PM PST

Years after the advent of decent VR hardware, there are still precious few ways the technology has been employed as anything other than a game or gimmick. One team at NASA, however, has been assembling useful science and engineering applications, with promising and unique results.

Studying the astronomical number of stars in our galaxy is generally done using legacy tools, scattered databases, perhaps even paper and pencil. And as such it can be hard to use that great multi-purpose pattern recognition engine, the human brain, to full effect on the information.

Tom Grubb, an engineer at NASA’s Goddard Space Flight Center, has felt for years that VR and AR are valuable tools for exploring and working with this type of data, and his team has just presented its first paper directly resulting from using those technologies.

He and his colleagues used a VR environment to examine an animated stellar neighborhood, and arrived at a novel classification for a star group other astronomers disagreed on. Being able to intuitively observe the stars’ paths and positions in a three-dimensional space provided the key insight.

An example of star data displayed in PointCloudsVR

“Planetariums are uploading all the databases they can get their hands on and they take people through the cosmos,” said astronomer Marc Kuchner in a NASA news post. “Well, I'm not going to build a planetarium in my office, but I can put on a headset and I'm there.”

Grubb and the team have created a number of software projects to help bring not just astronomical databases, but engineering work into VR. Just as heavy industry is learning to incorporate VR and AR into their safety, maintenance and training routines, NASA is looking into it in engineering and cross-site collaboration.

Part of that is just establishing basic tools for viewing and manipulating the data.

“The hardware is here; the support is here. The software is lagging, as well as conventions on how to interact with the virtual world,” Grubb explained. “You don't have simple conventions like pinch and zoom or how every mouse works the same when you right click or left click.”

But once you have people in a virtual environment looking at a 3D star map or representation of a probe’s interior, there are new opportunities to be discovered.

“We'll be in the same environment and when we point at or manipulate something in the environment, they'll be able to see that,” Grubb said. “You still have to build mockups, but you can work out a lot of the iterations before you move to the physical model. It's not really sexy to the average person to talk about cable routing, but to an engineer, being able to do that in a virtual environment and know how much cabling you need and what the route looks like, that's very exciting.”

The work is ongoing and the paper describing the team’s first astronomy results should be published soon. And of course the work they do is often released publicly, for example the PointCloudsVR tool they use to review star and lidar data — you can download it all on GitHub.

Tesla shares jump on profitable quarter, Model Y production

Posted: 29 Jan 2020 01:46 PM PST

Tesla continued its profitability streak in the fourth quarter, earning $105 million and generating nearly $7.4 billion in revenue, results that beat expectations and sent shares higher in after-market trading Wednesday.

Tesla also announced Wednesday that production of the Model Y started this month at its Fremont, Calif. factory, ahead of schedule.

Shares were up as high as 11.45% in after-market trading.

The automaker’s fourth-quarter results included $105 million in net income, or 56 cents a diluted share, compared with $140 million, or 78 cents a share, in the same year-ago period. Tesla earned $386 million, or $2.14 a share, in the fourth quarter when adjusted for one-time items.

Tesla reported revenue of $7.38 billion, 17% higher than the $6.3 billion generated in the previous period. Revenue in the fourth quarter was just 1% higher than the $7.2 billion generated in the fourth quarter of 2018.

Tesla’s earnings and revenue results outpaced analyst expectations, which, according to those polled by FactSet, anticipated adjusted earnings of $1.77 a share on revenue of $7 billion.

Tesla also reported free cash flow (operating cash flow less capital expenditures) of $1 billion. The company's cash and cash equivalents balance increased $930 million to $6.3 billion in the fourth quarter. Capital expenditures grew 27% compared to the same quarter last year, to $412 million, driven by the construction of the company’s factory in Shanghai. However, capital expenditures for 2019, which reached $1.3 billion, were still lower than in 2018, when it surpassed $2.1 billion.

While revenue grew from the third quarter — and ever so slightly compared to the same period in 2018 — Tesla noted growth was offset by more leases. Model 3 has become a larger part of the lease mix as well as the introduction of standard range trims of the 3 and adjustments to vehicle pricing, Tesla said in its earnings report.

“These changes have resulted in a reduction to the average selling price (ASP) relative to 2018,” the report said. “We do not expect ASP to change significantly in the near term, which means volume growth and revenue growth should correlate more closely this year.”

The fourth-quarter report did show that Tesla will likely rely on China and Model Y for revenue growth as deliveries of its higher profit margin Model X and Model S decrease. Tesla delivered 19,475 Model S and Model X in the fourth quarter, a 29% decline from the same period last year. Meanwhile, deliveries of Tesla’s cheaper Model 3 vehicle continued to climb. Tesla delivered 92,620 Model 3 vehicles in the fourth quarter, a 46% increase from the same period in 2018.

Microsoft shares rise after it beats revenue, profit expectations, Azure posts 62% growth

Posted: 29 Jan 2020 01:17 PM PST

Today Microsoft reported its fiscal 2020 second quarter (calendar Q4 2019) results, including revenue of $36.9 billion (up 14%), net income of $11.6 billion (up 38%) and diluted earnings per share of $1.51.

Investors had expected the company to report profit of $1.32 per share off revenue of $35.67 billion. The street had anticipated net income of $10.12 billion in net income, as well. The company’s stock is up around 2% in after-hours trading, following the company’s earnings release.

All that’s just fine. But, what about cloud — how did Microsoft do with Azure, Office 365 and the rest of the products that are expected to carry Redmond into the future? Here you go:

  • Office 365 Commercial revenue grew 27%, compared to its year-ago result
  • Azure grew 62%, compared to its year-ago result
  • “Office Consumer products and cloud services” grew by 19%, compared to their year-ago result
  • Dynamics 365 grew 42%, compared to its year-ago result

All the above figures are GAAP results, and are therefore not adjusted for currency fluctuations. On a so-called “constant currency” basis, Azure grew by a slightly faster 64%.

In addition to those results, LinkedIn, a somewhat recent Microsoft property, grew 24% compared to its year-ago results, while Surface grew in single-digit percentage terms, and Xbox’s digital products slipped by 11% on a year-over-year basis. (Microsoft had stressed early on that LinkedIn’s growth rate was a key priority.)

Gisting all of that quickly as we continue to understand the company’s new results, it appears that Microsoft’s cloud transition continued apace, with investors bidding up its equity modest after-hours in light of the results. Bear in mind that Microsoft’s shares have been on a tear lately, with the company’s valuation cresting the $1.28 trillion mark as we finish this post.

Apple, another of the technology giants, also saw its shares advance modestly after reporting earnings yesterday. This is a crowded week for tech results, which, at the top end so far, have gone well.

What about Windows?

Microsoft’s earnings are a stable affair, given its girth that stretches from consumer hardware, software, gaming and operating systems, to enterprise tech to sales tooling to venture capital and more. But one product that has always deserves a minute is Windows, Microsoft’s well-known operating system.

Notably in the quarter, the Windows business was good, with Windows OEM revenue rising 18%. Even better, “Windows Commercial products and cloud services” rose 25%. It is true that Microsoft’s OEM business (selling the OS to hardware shops that make PCs) likely had a Windows 7 end-of-life tailwind, but all the same, the numbers were good.

Or at least better than I’d hazard anyone would have guessed a few years back, living in the post-iPad era as we now are.

All told, a solid quarter from Redmond. That its shares are only up a few points is more indicative of how much the results were already priced into its shares than market enthusiasm for the company’s business. More if the stock price shifts again.

Facebook hits 2.5B users in Q4 but shares sink from slow profits

Posted: 29 Jan 2020 01:12 PM PST

Facebook beat Wall Street estimates in Q4 but slowing profit growth beat up the share price. Facebook reached 2.5 billion monthly users, up 2%, from 2.45 billion in Q3 2019 when it grew 1.65%, and it now has 1.66 billion daily active users, up 2.4% from 1.62 billion last quarter when it grew 2%. Facebook brought in $21.08 billion in revenue, up 25% year-over-year, with $2.56 in earnings per share.

But net income was just $7.3 billion, up only 7% year-over-year compared to 61% growth over 2018. Meanwhile, operating margins fell from 45% over 2018 to 34% for 2019. Expenses grew to $12.2 billion for Q4 2019, up a whopping 34% from Q4 2018. For the year, Facebook’s $46 billion in expenses are up 51% vs 2018. One big source of those expenses? Headcount grew 26% year-over-year to 44,942, and Facebook now has over 1000 engineers working on privacy.

While Facebook’s user base keeps growing rather steadily, it’s having trouble squeezing more and more cash out of them with as much efficiency.

Facebook's Q4 2019 earnings beat expectations compared to Zack’s consensus estimates of $20.87 billion in revenue and $2.51 earnings per share. Facebook shares fell over 7% in after-hours trading following the earnings announcement after closing up 2.5% at a peak $223.23 today. Still, Facebook remains near its previous share price high before this month.

Facebook CEO Mark Zuckerberg had previously warned that addressing hate speech, election interference, and other content moderation and safety issues would be costly. Still, expenses grew and profits shrunk faster than Wall Street seems to have expected. Facebook will have to hope its promise of using scalable AI to handle more of these jobs comes to fruition soon.

But some might see today as the proper reckoning for Facebook — penance for years of neglecting safety in favor of growth. Facebook’s CFO David Wehner confirms it has also just agreed to pay $550 million in a settlement over its violation of the Illinois Biometric Information Privacy Act. The class action suit stems from Facebook collecting users’ facial recognition data to power its Tag Suggestions feature that recommends friends tag you in photos in which you appear. The record-breaking settlement still falls far short of the $35 billion in potential penalties Facebook could have received.

Facebook’s executives are apparently bullish on its value despite the share price being at a peak, as today Facebook announced plans to grow its share-repurchase program by $10 billion, adding to its previous authorization of buying back up to $24 billion worth.

Facebook managed to add 1 million daily users in the U.S. & Canada region where it earns the most money after returning to growth there last quarter following a year of slow or no growth. Facebook’s stickiness, or daily to monthly active user ratio remained at 66% amidst competition from apps like TikTok and a resurgent Snapchat.

Masking The Shift To Instagram

Facebook notes that there are now 2.26 billion users that open either Facebook, Messenger, Instagram, or WhatsApp each day, up from 2.2 billion last quarter. The family of apps sees 2.89 billion total monthly users, up 9% year-over-year.

Facebook released a new stat with this earnings report: Family Average Revenue Per Person. That’s essentially the company’s total revenue divided by total users on Facebook, Messenger, Instagram, and WhatsApp. Clearly, the company is trying to use Instagram’s growing ad revenue to make the rest of the company look stronger. This might help mask changes in the Facebook app’s own revenue as teens look to more youthful content feeds. Wehner confirmed the company will cease sharing Facebook-only stats in favor of Family Of Apps stats in late 2020.

Sadly Facebook’s isn’t calling this metric FARPP

Earnings Call Highlights

Zuckerberg stressed Facebook’s need to stay focused on addressing social issues and consequences of the company’s growth during the earnings call. He said Facebook will continue to make its apps more private and secure.

As for product updates, Zuckerberg seized on opportunities in commerce. Facebook is building out WhatsApp Pay, and he says “I expect this to start rolling out in a number of countries and for us to make a lot of progress here in the next six months.” 140 million small businesses now use its tools. People bought almost $5 million in content on the Oculus Store on Christmas Day, which Zuckerberg called a milestone. He says Facebook’s Spark AR platform is most used of its kind by developers, with hundreds of millions of people experiencing face filters built with it.

Regarding plans to integrate the family’s chat interfaces, Zuckerberg says Messenger, Instagram, and WhatsApp will retain their brands. He also noted they’re already quite integrated on the backend…which could be an attempt to persuade regulators it might be difficult to break up the company.

For guidance, Wehner said “we expect our year-over-year total reported revenue growth rate in Q1 to decelerate by low-to-mid single digit percentage points as compared to our Q4 growth rate. “Factors driving this deceleration include the maturity of our business, as well as the increasing impact from global privacy regulation and other ad targeting related headwinds.”

Wehner says to expect that the worst of these privacy headwinds are still to come due to regulatory initiatives like GDPR and CCPA, mobile operating systems and browser providers like Apple and Google limiting access to ad targeting singals, and Facebook’s own product changes like the new way to disconnect off-Facebook data from your acccount.

On Facebook’s perception issues, Zuckerberg said “We’re also focused on communicating more clearly what we stand for. One critique of our approach for much of the last decade was that, because we wanted to be liked, we didn’t always communicate our views as clearly because we were worried about offending people. So this led to some positive but shallow sentiments towards us and towards the company. And my goal for this next decade isn’t to be liked, but to be understood, because in order to be trusted, people need to know what you stand for.”

Building Despite Scrutiny

The business aside, Facebook had another tough quarter under the scrutiny of journalists and regulators. Democratic presidential candidates have railed against Zuckerberg’s decision to continuing allowing misinformation in political ads. The company dropped out of the top 10 places to work, and pledged $130 million to fund an Oversight Board for its content policies.

The CEO was grilled on Capitol Hill about Facebook’s cryptocurrency Libra that seems stuck in its tracks as major partners like Visa and Stripe dropped out. Facebook took heat for how its treats content moderators and how it tried to cut off competitors from its developer platform. The FTC continued its anti-trust investigation and weighed an injunction that would halt Facebook intermingling its messaging app infrastructure.

But those headwinds didn’t stop Facebook’s march forward. Its four main apps took the top four spots amongst the most downloaded apps of the 2010s. It moved deeper into hardware sales with its new Portal TV attachable camera. It acquired gaming companies like Playgiga and the studio behind VR hit Beat Saber, while signing exclusive game streaming deals with influencers like Disguised Toast. It launched Facebook News, Facebook Pay, its dating feature in the US, and it tested a meme-making app called Whale.

Facebook’s share price remains near an all-time high despite today’s tumble. While the world may be increasingly uncomfortable with Facebook’s access to private data, there’s no debate about how incredibly valuable that data is.

Self-driving company Waymo teams up with UPS for package delivery

Posted: 29 Jan 2020 01:08 PM PST

Waymo will start delivering parcels for UPS using its self-driving Chrysler Pacifica minivans in Phoenix as part of a broader partnership with the shipping and logistics company.

The companies said Wednesday that Waymo will pilot autonomous vehicle package pickup in metro Phoenix — the same area where its self-driving vehicles already operate. The minivans will take packages from UPS store locations to a local UPS sorting facility for processing. The pilot won’t involve package delivery to consumers.

While this is a pilot, both companies said the goal is to jointly develop a “long-term plan for how the companies can work together.” Waymo chief operations officer Tekedra Mawakana added that the partnership will allow us to continue developing how our Waymo Driver can facilitate pickups.

Today, Waymo has more than 600 self-driving vehicles in its fleet, the majority of which are in Arizona. Waymo is modifying some of its Chrysler Pacifica minivans for package delivery by removing the back seats.

The vehicles used in the Arizona pilot will drive autonomously with a Waymo-trained driver on board to monitor operations.

This isn’t the first self-driving technology company that UPS has partnered with. TuSimple, an autonomous trucking company, runs two trips daily for UPS between Phoenix and El Paso. UPS announced last year that it took a minority stake in TuSimple, just months after the two companies began testing the use of autonomous trucks in Arizona.

The size of minority investment, which was made by the company's venture arm UPS Ventures, was not disclosed.

UCSD hospital gets a drone delivery program powered by Matternet and UPS

Posted: 29 Jan 2020 01:05 PM PST

Drone delivery may not make a lot of sense for food or parcel delivery yet, but for hospitals it could be a lifesaver. A new test program is being inaugurated at UC San Diego’s Jacobs Medical Center, where Matternet drones operated by UPS will fly blood samples and other items to and from other nearby facilities.

The new program will be the third under Matternet’s belt; an earlier partnership with UPS has made some 1,900 flights at WakeMed hospital in North Carolina, and flights with SwissPost in Zurich resume this month after crashes put them on ice over the summer.

Biological samples and other items that need to be moved quickly generally travel by courier service, which is of course fine sometimes, but not during rush hour. No one wants to have a second spinal tap because the first one got stuck in traffic.

The flights these drones will be undertaking will be autonomous, but with remote monitoring and line of sight from Jacobs to the Moores Cancer Center and Center for Advanced Laboratory Medicine, both of which are less than a mile away.

It’s a big month for Matternet, which in addition to these two concurrent flight test programs recently pulled in a strategic round from the healthcare-focused McKesson Ventures.

Stanford’s Doggo quadrupedal robot and siblings Pupper and Woofer are coming to TC Sessions: Robotics + AI

Posted: 29 Jan 2020 01:00 PM PST

Animal-like, four-legged robots have been a crowd-pleaser since Boston Dynamics’ BigDog, and Stanford’s Doggo shows how the technology can be made open source, accessible and educational. Doggo’s creators will bring the diminutive robot, plus its smaller and larger siblings Pupper and Woofer, to TC Sessions: Robotics + AI on March 3.

P.S. Early-bird ticket sales end this Friday — book your tickets today and save $150.

We first heard of Doggo last year when the Stanford Robotics Club showed off the highly capable design, which uses mostly off-the-shelf parts and can be assembled by anyone… as long as “anyone” has considerable experience building robots and a couple thousand dollars to spend.

Still, a couple thousand is an order of magnitude or two lower than most quadrupedal robots go for, and project lead Nathan Kau told TechCrunch they’ve seen a ton of interest.

“I had no idea how many people were going to pick it up,” he said. “It’s complicated! But I get emails every day from people building this thing, from all over. The first team to get it running, to my knowledge, was in Sri Lanka.”

In order to further push the lower bounds of who can build and experiment with a robot like this, the team is building a smaller, even less expensive robot called Pupper. They hope to get the cost down to the level where even high school clubs can afford one.

“It’s less than $500 in development materials if you make it by yourself,” said Kau. “We imagine that if it becomes a kit and we have a partnership with the part manufacturers, it could be much less. We built it as a platform for learning, so it uses a Raspberry Pi and everything is programmed in Python. It’s about as complicated as building a drone, I’d say.”

You’ll be able to see Doggo and Pupper in action at the event, and they’ll be joined by one more robot: Woofer, a jumbo-sized step up from the others. It’s earlier in development than the other two, but to keep things simple it shares much of its codebase with the others.

Grab your tickets to the show today and get to see these awesome robots in person and hear from today’s leading minds in the industry. Early-bird tickets expire this Friday, January 31, so book yours today and save $150 before prices go up.

After sale to Ford, Spin charges ahead with plans to scale up

Posted: 29 Jan 2020 11:48 AM PST

Electric scooter startup Spin was long considered to be a bit of an underdog in the micromobility space. Before selling to Ford, Spin had raised just $8 million, while competitors Lime and Bird had raised hundreds of millions. Today, the former underdog is backed by one of the world’s largest transportation companies and has set its sights on becoming an industry leader that sets standards for both vehicles and labor practices.

“We’ve gone from the scrappy upstart, the guy who was least-funded, the guys who kept to their principles and always deployed working with cities, who realized that there would be a chance for a long-term kind of business here,” Spin co-founder Euwyn Poon told TechCrunch. “Now, through the Ford acquisition, we can take an even longer-term view.”

When Ford bought Spin in a deal worth about $100 million in November 2018, Spin employed just 24 people. Now, the company has a few hundred staffers across 70 markets. Spin’s blueprint for growth is what brought Ford to the table, Poon said.

“The acquisition happened at a time when Bird and Lime had probably raised about $700 million each, so they were scaling out,” Poon said. “When Ford was looking to get into this space, instead of doing it themselves or acquiring a larger company, they found us as a great partner because we had these great principles and a big blueprint for scaling out. The capital injection they provided to us has put us in our path so, with the addition of Ford, we’ve been able to tap on their capital resources and have acquired a lot of expertise in the hardware side and a lot of expertise on the regulatory side as well.”

Verkada raises $80M at $1.6B to be every building’s security OS

Posted: 29 Jan 2020 11:47 AM PST

Fifty iPads were stolen from Verkada co-founder Hans Robertson’s old company. Only when they checked the security system did they realize the video cameras hadn’t been working for months. He was pissed. “The market lagged behind the progress seen in the consumer space, where someone could buy high-end cameras with cloud-based software to protect their home,” Verkada’s CEO and co-founder Filip Kaliszan tells me of his own attempt to buy enterprise-grade security hardware.

Usually, startups ascend on the backs of fresh technologies and developer platforms. But Kaliszan and Robertson realized that commercial security was so backward that just implementing the established principles of machine vision and the cloud could create a huge company. The plan was to keep data secure yet accessible and train its cameras to take clearer photos when AI detects suspicious situations instead of just grainy video.

At first, few could see the vision through the slow upgrade cycles and basement security rooms common with most potential clients. “The seed and the A were extremely difficult rounds to raise compared to the later rounds because people didn’t believe we could execute what were are proposing,” Kaliszan glumly recalls.

But today Verkada receives a huge vote of confidence. It just raised an $80 million Series C at a stunning $1.6 billion post-money valuation thanks to lead investor Felicis Ventures writing Verkada its biggest check to date. The cash brings Verkada to $139 million in funding to sell dome cameras, fisheye lenses, footage viewing stations and the software to monitor it all from anywhere.

Why sink in so much cash at a valuation triple that of Verkada’s $540 million price tag after its April 2019 Series B? Because Verkada wants to bring two-factor authentication to doors with its new access control system that it’s announcing is now in beta testing ahead of a Spring launch. Instead of just allowing a stealable key fob or badge to open your office entryway, it could ask you to look into a Verkada camera too so it can match your face to your permissions.

“Our mission is to be the essential physical security software layer for every building, and the foundation of a larger enterprise IoT infrastructure,” Kaliszan tells me. By uniting security cameras and door locks in one system, it could keep banks, schools, hospitals, government buildings and businesses safe while offering new insights on how their spaces are used.

The founders’ pedigrees don’t hurt its efforts to sell that future to investors like Next47, Sequoia Capital and Meritech Capital, which joined the round. Robertson co-founded IT startup Meraki and sold it to Cisco for $1.2 billion. Kaliszan and his other co-founders Benjamin Bercovitz and James Ren started CourseRank for education software while at Stanford before selling it to Chegg.

Making a better product than what’s out there isn’t rocket science, though. Many building security systems only let footage be accessed from a control room in the building… which doesn’t help much if everyone’s trying to escape due to emergency or if a manager elsewhere simply wants to take a look. Verkada’s cloud lets the right employees keep watch from mobile, and data is also stored locally on the cameras so they keep recording even if the internet cuts out. “Our competitors stream unencrypted video and it’s on you to protect it. We’re responsible for handling that data,” Kaliszan says.

Verkada’s machine vision software can make sense of all the footage its cameras collect. “We can immediately show them all the video containing a particular person of interest rather than manually searching through hours of footage,” Kaliszan insists. “Our platform can use AI/machine learning to recognize patterns and behaviors that are out of the norm in real time.”

For example, a hostage negotiator was able to use Verkada’s system to assess whether a SWAT team needed to invade a building. Verkada can group all spottings of an individual together for review, or scan all the footage for people wearing a certain color or with other search filters.

Indeed, 2,500 clients, including 25 Fortune 500 companies, are already using Verkada. In the last year it has tripled revenue, partnered with 1,100 resellers, launched nine new camera models, added people and vehicle analytics, opened its first London office and is on track to grow from 300 to 800 employees by the end of 2020.

“We call this reinvention,” says Felicis Ventures founder and managing director Aydin Senkut. “One thing people underestimate is how big this market is. Honeywell is valued at $110 billion-plus. There’s a Chinese company that’s over $50 billion. The opportunity to be the operating system for all buildings in the world? Sounds like that market couldn’t be better.” Senkut knows Verkada works because he had it installed in all his homes and offices.

Most enterprise software companies don’t have to worry about the complexities of hardware supply chains. There’s always a risk that its sales process stumbles, leaving it stuck with too many cameras. “We’re still burning money. We’re not there yet or we wouldn’t be raising venture. Because we’re going after a mature market, you can’t come at it with a model that doesn’t make sense. Investors come at it from a hard-nosed approach,” Robertson admits.

“People have a tendency to write off Verkada as a boring camera company. They don’t realize how access control as the second product is going to supercharge the company’s potential,” Senkut declares.

One bullet Verkada dodged is the one firmly lodged in Amazon’s chest. Ring security cameras have received stern criticism over Amazon’s cooperation with law enforcement that some see as a violation of privacy and expansion of a police state. “We don't have any arrangements with law enforcement like Ring,” Kaliszan tells me. “We view ourselves as providing great physical security tools to the people that run schools, hospitals and businesses. The data that those organizations gather is their own.”

Lyft confirms 90 layoffs as it targets profitability

Posted: 29 Jan 2020 11:29 AM PST

Shares of popular American ride-hailing giant Lyft are off 1.5% today in regular trading after The New York Times reported that the company would cut some staff. TechCrunch confirmed with the company that 90 individuals are expected to be impacted by the changes. The company’s shares dipped as far as 3% before recovering.

In a statement, the company said that it has “carefully evaluated the resources we need to achieve our 2020 business goals, and the restructuring of some of our teams reflects that. We are still growing rapidly and plan to hire more than 1,000 new employees this year.”

Lyft has been under pressure along with industry peer Uber to show a path to profitability after a history of cash burn and unprofitability.

During its most recent earnings report, Q3 2019, Lyft said that it expects “to be profitable on an adjusted EBITDA basis in the fourth quarter of 2021,” earlier than previously expected. The company’s shares have traded under its IPO price since its debut; worth $72 per share when it went public, Lyft is worth a little more than $47 per share today.

According to the company, marketing and enterprise sales teams were impacted.

Uber, Lyft’s chief domestic rival, also cut staff in recent months. A host of other so-called “unicorn” companies have also reduced their staffing in recent quarters as investors, both public and private, have changed their mood toward losses — gone are the days when expensive, unprofitable growth was hailed as bold. Today, revenue growth stapled to rapidly shrinking unprofitability or even profits is in vogue.

And Lyft, with promises on the board to reach adjusted profitability inside the next eight quarters, has a clock ticking next to its income statement.

The company has made some progress in reducing its losses. In its most-recent quarter, for example, the company’s adjusted net loss fell from $245.3 million (Q3 2018) to $121.6 million (Q3 2019) as its revenue grew from $585.0 million to $955.6 million over the same period. The company’s losses inclusive of all costs worsened over the year, but its Q3 2019 quarter included a huge share-based compensation expense, and $86.6 million charge. Whether investors view the package of adjusted and GAAP results as improvements is up for debate. But, the company’s operating cash flow did improve over the same period.

The results gisted down to an adjusted EBITDA loss of $128.1 million in the third quarter of 2019, far from zero, but a far slimmer percent-of-revenue result compared to the year-ago quarter (Q3 2018).

Lyft will announce its Q4 2019 results on February 11, in about two weeks. We’ll know more about its profitability quest then.

Google Nest begins testing HVAC alerts, partners with Handy for booking service calls

Posted: 29 Jan 2020 11:10 AM PST

Google’s Nest is testing a new feature that will alert you to potential HVAC issues and even help you book an HVAC professional to fix it, thanks to a partnership with Handy. The company says the HVAC alerts are only available in select cities during the testing period. If you’re in one of the supported markets, the new HVAC alert email will include an additional link to a website where you can make an appointment with a repair professional.

Nest users have already been able to sign up to receive a monthly email, the Nest Home Report, which offers a summary of their home’s energy use, safety events, Nest news and information about other Nest products, among other things.

Users who had signed up for this email will be automatically enrolled to receive the new HVAC alert emails starting today, Google says.

Various events could trigger these HVAC alerts, but largely it’s based on warning signs that your Nest detects — like unusual or unexpected heating and cooling patterns.

For example, if the thermostat finds it’s taking longer to cool your home than usual, that could signal a problem with your AC system. The alerts aren’t meant to replace the need for regular HVAC maintenance or service pro expertise, but instead are meant to serve as a warning about a potential issue.

Nest will also take into account your area’s weather before making a determination about a potential problem, as something like an overnight cold snap could work the thermostat more than usual.

In the HVAC alert email, users will be informed as to which system (heating or cooling) experienced the issue. A link to an optional survey about how you resolved the problem, and what it turned out to be, will also be included. This data may be used to help the system get smarter over time, in terms of diagnosing issues.

Not all Nest alerts will mean there’s a need for a service repair pro to come out, of course. Sometimes the problem is as simple as a household member having left a door open, which allowed hot air in, for example.

However, if you decide a service call is warranted, Nest will also now be able to connect you to a local pro in your area. Of course, you can reach out to your original Nest installer (Settings –> Home info –> Nest Pro Installer), if you choose.

But in the test markets, Nest owners will receive emails that also include a link to a website where you can book a qualified HVAC pro. This is done via Handy, which Nest has partnered with on this new effort. That limits the feature only to select regions that Handy supports.

At launch, the Handy booking option will be made available to Nest users in 20 metro areas, including Atlanta, Boston, Denver, Las Vegas and San Diego, and others. Over the course of the test, it will expand to more regions. Handy today supports a fairly large number of cities across the U.S., Canada and the U.K.

If you don’t want to receive HVAC alerts, you can opt-out using a link in the email.

While Handy is taking on the service calls from Nest users for the time being, Google could eventually choose to connect Nest users with Google My Business profiles in the future, if it chose, or even turn this into a new advertising destination for qualified HVAC pros.

To get started, users will need to first sign up for the Nest Home Report if they haven’t already. They’ll then receive alerts as necessary going forward.

 

Xplore teams up with Nanoracks for commercial deep space exploration

Posted: 29 Jan 2020 11:03 AM PST

Mostly when we talk about commercial space, and space startups, the focus is relatively close to home — stretching to orbit, and maybe the Moon. But Seattle-based startup Xplore wants to extend the privatization of space further still, through the development of spacecraft and a platform designed for commercial missions to the Moon, Mars, Venus, extra-orbital asteroids and beyond.

Xplore is building spacecraft capable of carrying small payloads (between roughly 70-150 lbs) to deep space destinations. These could include sensors, including optical cameras, tools for measuring temperature and other space weather conditions, hyperspectral imaging tools, or even other, smaller spacecraft on behalf of a range of commercial clients. The company began operations in 2017, co-founded by Lisa Rich and Jeff Rich (who also founded and manage VC firm Hemisphere Ventures) and plans to fly its first spacecraft, destined for the Moon, beginning in 2021.

Nanoracks is a commercial space company with an established history of developing and deploying commercial spacecraft, including small satellites launched from the International Space Station (ISS), with payloads from customers including the European Space Agency, NASA, the German Space Agency and many more. In 2016, Nanoracks opened the first commercial testing platform, installed on the outside of the ISS to allow private companies to run experiments in microgravity and in space-based radiation exposure. More recently, it announced that it would be launching technology to demonstrate in-space structural metal cutting for the first time — tech that could one day open up big opportunities in re-using discarded spacecraft for in-space reuse and manufacturing.

Xplore’s spacecraft can hold multiple payloads, and Nanoracks will be able to use their experience to help prepare and integrate the cargo of Xplore’s clients, making it possible to launch more rapidly and more efficiently with less lead time required.

Xplore also plans to fly Earth orbital missions, focusing on rapid response capabilities and handling everything for customers in terms of mission parameters, spacecraft and operations — everything beyond the payload design, basically. With more launch providers and capacity coming online, there’s definitely a growing need for mission logistics and payload launch services — and extra-orbital destinations make Xplore’s an interesting offering that could pave the way for different kinds of businesses and commercial research.

GoFundMe CEO Rob Solomon is stepping down, will be replaced by Tim Cadogan, CEO of OpenX

Posted: 29 Jan 2020 10:15 AM PST

A significant changing of the guard is underway at GoFundMe, the popular charitable and causes-based online giving platform that has generated $9 billion from 120 million donations globally to date. The company is announcing that Rob Solomon, who has been the CEO of GoFundMe for the last five years, is stepping down from the role and is getting replaced by Tim Cadogan, currently the CEO of programmatic advertising platform OpenX. Solomon is staying on as chairman after the transition.

The news is being shared with employees today, and the change is effective on March 2. Cadogan is leaving his role on February 14 and will be replaced by John Gentry, who is currently president at the ad company.

Solomon and Cadogan said today there are no plans to change GoFundMe’s strategy with the switch of CEOs. “This is a deepening and investment in the strategy to articulate it,” said Cadogan. “We are keeping our DNA as a company and looking for ways to continue to make that even more effective and widely available.”

It may not seem completely obvious what the expertise link might be between programmatic advertising and a causes-based online donation platform — the two would seem like they belong to very different realms of the online universe — but actually there are a couple of ways in which the change makes some sense.

GoFundMe has mostly made its name through peer-to-peer donations around personal causes — where Solomon estimates it has around an 80% share in its home market, and close to that in others. In recent years, it’s been working on expanding that by changing the business model underpinning the P2P model by eliminating fees and switching to a donation model and adding in new features like team fundraising; and, more importantly, turning on the taps for working with larger charities, a market that’s estimated to raise some $500 billion in donations annually (that figure clearly dwarfs the $9 billion GoFundMe has generated in donations across the lifetime of the platform).

B2B businesses — that is, selling to business and enterprise customers — is what Cadogan has essentially been focused on while building the programmatic business at OpenX, and that is the expertise they are hoping to bring to bear as GoFundMe enters its next phase of growth.

There is also an interesting common place of employment that Solomon and Cadogan share: both worked together at Yahoo many years ago (so I guess that makes three of us, when you remember that TC and Yahoo are now, basically, sister companies).

GoFundMe’s deeper move into B2B has been a long time in the making.

In October, GoFundMe launched Charity, a new fundraising platform specifically targeting nonprofit organisations. Built on its 2017 acquisition of CrowdRise, Charity let nonprofits continue to build campaigns on GoFundMe but also, for the first time, start to create ways of building GoFundMe-powered donations off of GoFundMe’s own site. “Since we launched Charity, we have had thousands of charities sign up using our tools,” said Solomon. “We’re just getting started but are really pleased with the progress.”

While Cadogan has some strategic expertise in B2B, he said there is more to his taking on this new role.

“This is a chance to get back to building a great consumer product,” said Cadogan, who has a long track record across both the B2B and consumer spaces. “I am an ad guy but I once had been a consumer guy.” Also, he added, is the unique position of GoFundMe in the consumer internet space. “The social purpose is incredibly rare and unique, the chance to get to help to work on something that helps is a big factor. That the normal business is not trying to get people to buy and sell things is very rewarding.”

The company has only ever disclosed one funding round, in 2015 — an undisclosed amount that valued GoFundMe at $500 million — but it has been profitable since its earliest days, has been growing at a very steady pace, and is thought to be far more valuable than that today.

Solomon said that while an IPO remains an option for liquidity longer term, so does M&A or even the private equity market.

“When you think about our investors,” — which include Accel, Greylock and TCV –“they are investing in companies they have conviction around. They are very patient and want us to be a category-defining company, the living layer of the internet. So as we continue to build the platform, we have no plans to do anything for a number of years.”

Coinbase poaches Google Shopping VP as CPO for cryptocommerce

Posted: 29 Jan 2020 10:00 AM PST

“We’re trying to shift cryptocurrency from this speculative asset class to driving real-world utility,” Coinbase CEO Brian Armstrong tells me. How? Through commerce and micropayments. But now Coinbase has the who to build it. Today the startup announced it has hired away former head of Product for Indian e-commerce giant Flipkart and Google Shopping VP of Product Surojit Chatterjee to become Coinbase’s chief product officer.

“I've always enjoyed being associated with technology that is on the brink of changing how we live” writes Chatterjee. “Google ads has helped democratize commerce, Flipkart and ecommerce has revolutionized life in India, and I believe Coinbase is going to turn conventional finance on its head.”

Chatterjee spent more than 11 years at Google over two stints, the first as a founding member of Google’s mobile search Ads product that’s grown to tens of billions in revenue per year. When he starts at Coinbase next week, Armstrong tells me he’ll help Coinbase organize its complex array of products, including its cryptocurrency exchange, wallet, stablecoin, incentivized crypto education platform Earn and Coinbase Commerce that lets businesses take payments in Bitcoin, Ethereum and more. Chatterjee replaces Jeremy Henrickson, the former Coinbase CPO who departed in December 2018.

“Surojit is a huge asset here because we’re a product-led company,” Armstrong says. “We have different leaders and they increasingly have responsibilities around P&L. Having one really experienced chief product officer that can mentor them and teach them to own revenues and budgets — really in the model of Google — that will professionalize Coinbase.”

One opportunity Armstrong hopes Chatterjee can help Coinbase seize on is building products for emerging markets where financial infrastructure is weak. “E-commerce is not equally distributed around the world. Micropayments don’t work that well … Him spending time living in India, a developing market, he deeply understands mobile money.” Given the explosion of phone-based payments, the demonetization and the prevalence of cash on delivery methods in India that Flipkart dealt with, “his background is kind of ideal from that worldly perspective,” Armstrong explains.

Chatterjee cites his upbringing as inspiration to deliver “economic freedom for everyone," as Armstrong says is Coinbase’s mission. “Growing up in India in a poor middle-class household, I saw very closely what a lack of liquid cash does to a family's lifestyle,” Chatterjee recalls. 

“As a kid I would go with my mom to a local bank to withdraw money. And believe me when I tell you that the process was epic!” It included withdrawal slips, tokens and anxiously trying to match current signatures to versions decades old. When India demonetized and made everyone exchange their cash, “My dad, who was almost 80 at that time, stood in a queue for five hours to get 2000 Rs, which was the per-day limit for the first week. That's less than $30!” Digital money could ensure people always have access to everything they own.

Surojit Chatterjee (far right) rides along for a Flipkart delivery to understand the consumer commerce experience

In developed countries, Armstrong sees a chance for Chatterjee to enable digital content creators to turn their passion into their profession. “There’s lots of people who lurk on Reddit or Stack Overflow and answer questions … If there was real money on these things, these could be their full time jobs — contributing content on user-generated social sites,” Armstrong predicts. “I think you’d see a lot more contributions, as well.”

Now might be the perfect time to hire Chatterjee since we're in a lull period for cryptocurrency in the wake of the rush at the end of 2018. "Crypto is always challenging to navigate. In these periods when it's relatively quiet, we tend to do really well," Armstrong says. The company grew market share, volume and app installs versus competitors between 50% and 100%, according to the CEO. Referencing ancient war strategy, Armstrong concludes that, “There’s years where you just want to train the soldiers and stockpile resources and you’re basically just preparing. We’re building the company, not just responding to crazy hype.”

Microsoft takes wraps off $40M ‘AI for Health’ initiative

Posted: 29 Jan 2020 09:31 AM PST

When the topics of Microsoft and global health overlap, one tends to think about the Gates Foundation, but the company itself is doing good work along these lines as well. The latest such effort is AI for Health, a $40 million, five-year outgrowth of Microsoft’s AI for Good program that aims to help apply the benefits of AI with an eye to bettering the health of the less fortunate worldwide.

The new initiative will focus on direct research in the medical AI field (think algorithms for automatically detecting a disease), global health studies (that is, better understanding of how such things could be of use) and improving access (actually putting the algorithms to work).

“AI for Health is a philanthropic initiative that complements our broader work in Microsoft Healthcare,” wrote Microsoft’s John Kahan in a blog post announcing the new program. “We will support specific nonprofits and academic collaboration with Microsoft’s leading data scientists, access to best-in-class AI tools and cloud computing, and select cash grants.”

Kahan points out that modern healthcare is incredibly unevenly distributed, coming near eliminating some diseases and forms of death in some countries, while others are ravaged by the same. That’s not exactly a problem that AI can solve, but there are things that it can do.

For instance, he points out, there are highly effective AI-based screening systems for diabetic retinopathy, a condition millions are at risk of that can lead to blindness. Getting a village access to a mobile phone and eye-inspection attachment is a lot easier and cheaper than dispatching an ophthalmologist.

It’s the goal of AI for Health to help engineer, identify and deploy technologies like that. Part of that is simply a question of cost — many AI experts are in the more general tech sector because that’s where the jobs are. Getting them to cross over to the social-good side means those projects will need to be competitive and successful, which a bit of Microsoft cash might help with.

The company noted a few partnerships that will benefit from the new program, with medical research outfits looking into SIDS, leprosy, diabetic retinopathy as mentioned above, tuberculosis, maternal mortality and, of course that eternal adversary, cancer.

Unfortunately, unlike some of Microsoft’s other grant programs, this $40 million isn’t up for grabs via public applications: It will be working directly with nonprofits and research organizations. But if you’re at one of those organizations, it might be a good time to get in touch with your collaborators in Redmond.

Rivian is building Lincoln an all-electric vehicle

Posted: 29 Jan 2020 09:31 AM PST

Lincoln Motor’s first all-electric vehicle is coming from Rivian .

Lincoln, the luxury brand under Ford, said Wednesday the two companies will work together to develop an “all-new” electric vehicle. This electric vehicle, or at least the intent to build it, was announced in April as part of Ford’s $500 million investment in Rivian. But until now, it wasn’t clear what that vehicle would be and under what brand.

Rivian confirmed the announcement and didn’t provide further details.

Lincoln has produced two plug-in hybrid vehicles, the Aviator and Corsair Grand Touring, which it unveiled in November at the LA Auto Show. But it has never produced an all-electric vehicle.

The Lincoln battery electric vehicle will be built off of Rivian’s flexible skateboard platform.

“Working with Rivian marks a pivotal point for Lincoln as we move toward a future that includes fully electric vehicles,” said Joy Falotico, president of the Lincoln Motor Company said in a statement. “This vehicle will take Quiet Flight to a new place — zero emissions, effortless performance and connected and intuitive technology. It’s going to be stunning.”

Lincoln has been focused on whetting consumers’ appetite for SUVs over the past three years, a strategy that has helped global SUV sales grow 7% year over year, according to the company.

Lincoln didn’t say what kind of vehicle Rivian will build, but based on its trajectory the past several years it will likely be an SUV.

The addition of the luxury EV will mean the death of the MKZ sedan. Production of the MKZ sedan will end this year in order for the Hermosillo Assembly Plant in Mexico to prepare for production of new Ford vehicles, the company said.

Daily Crunch: Apple reports better-than-expected revenue

Posted: 29 Jan 2020 09:17 AM PST

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.

1. Apple shares rise after company reports better-than-expected revenue of $91.8B

Apple has worked in recent years to lessen its dependence on the iPhone, in part through services and smaller electronics. This is doubly true as the company posted a year-over-year decline in Mac revenue.

In its latest earnings report, the company highlighted its smaller-device and home category, with CEO Tim Cook saying his company posted "all-time records for Services and Wearables."

2. SpaceX successfully launches 60 more satellites for its Starlink satellite internet constellation

SpaceX has launched yet another batch of 60 Starlink satellites — its third production batch of the orbital communication spacecraft, and its second batch this year alone. After the last batch went up in early January, SpaceX became the largest private satellite operator in the world, and now it's just extending its lead.

3. Mobile messaging startup Attentive raises another $70M

It’s been less than six months since Attentive raised a $40 million Series B. CEO Brian Long told me that he wasn't planning to raise money again so soon, but things were going even better than expected, with a client list that has grown to more than 750 businesses.

4. For alternative meat manufacturer Beyond Meat, fast food chains giveth and taketh away

On the same day that the Tim Horton's restaurant chain is dropping Beyond Meat products from its menus, Beyond Meat and KFC announced the expansion of a pilot run at new stores in Nashville, Tenn., Charlotte, N.C. and across Kentucky.

5. A conversation with 'the most ambitious female VC in Europe'

We talk to Ophelia Brown, whose Blossom Capital just raised a new $185 million fund. The interview covers topics like her investment thesis, why Europe is at an "inflection point," diversity in the investor community and the increasing money coming into Europe from American VCs. (Extra Crunch membership required.)

6. No pan-EU Huawei ban as Commission endorses 5G risk mitigation plan

The move is another blow for the Trump administration’s efforts to demolish trust in Chinese-made technology, with the U.K. government also announcing yesterday that it would not be banning so-called "high risk" providers from supplying 5G networks.

7. Kenshō Healthcare publicly launches its ‘antithesis of Goop’

While Gwyneth Paltrow's lifestyle brand startup serves up a heady mix of unverified pseudo-scientific claims alongside long-standing holistic practices, the founders of Kenshō Healthcare say they’re focused on the verified and verifiable claims coming out of the medical community.

Aurora can now give the public rides in its self-driving cars

Posted: 29 Jan 2020 09:10 AM PST

Aurora has been given permission by California regulators to transport passengers in its self-driving vehicles, TechCrunch has learned.

The California Public Utilities Commission granted Aurora a permit, which was posted on its website Wednesday, to participate in the state's Autonomous Vehicle Passenger Service pilot. Aurora confirmed the approval.

“This permit lets us give rides powered by the Aurora Driver and shows that we’re committed to being good partners to California and the Commission,” an Aurora spokesperson said when asked about the permit.

The company didn’t provide more details about when it might start letting passengers in its vehicles. And based on the company’s focus, it’s likely this won’t be a broad robotaxi service.

Aurora has never planned to operate a robotaxi service. Instead, it has focused on building the self-driving stack and working with partners to integrate into vehicle platforms. The “Aurora Driver,” as the company calls it, has been integrated into six vehicle platforms from several manufacturers, including sedans, SUVs, minivans, commercial vans and Class 8 trucks. These integrations are not commercially available.

Aurora, which has operations in Pittsburgh, Palo Alto and San Francisco, has a fleet of about a dozen self-driving vehicles that are used for testing on public roads. The company started testing its self-driving system in Chrysler Pacifica minivans and has said it will continue to grow this fleet over the next year.

Aurora attracted attention early on because of the pedigree of its three founders — Sterling Anderson, Drew Bagnell and Chris Urmson — who had led self-driving vehicle programs at Google, Tesla and Uber. In February 2019, the company raised more than $530 million in a Series B round led by Sequoia Capital and includes "significant investment" from Amazon and T. Rowe Price Associates. The monster round pushed Aurora's valuation to more than $2.5 billion. It has raised more than $620 million to date.

The approval from CPUC is different than the permits issued by the California Department of Motor Vehicles to test self-driving vehicles in the state. Today, 65 companies have a DMV permit to test self-driving vehicles on public roads in the state.

Only four other companies, AutoX, Pony.ai, Waymo and Zoox, have CPUC permits. Zoox was the first company to receive a permit in December 2018.

The CPUC permit gives Aurora permission to use its self-driving vehicles to transport people. The permit comes with a few caveats. Companies issued the permits cannot charge for rides — a rule that AV developers are lobbying to get changed — and the vehicles must have safety drivers behind the wheel. Companies must also have the testing permit from the DMV.

Aurora’s permit, which lasts until January 2023, requires the company to provide reports to CPUC with information on total passenger miles traveled and safety protocols.