While Pittsburgh’s business community continues to process the demise of self-driving technology company Argo AI, leaders at other driverless tech firms in the city insist that different market niches, coupled with newly-approved legislation, will help them to weather a turbulent market.
Argo announced Wednesday that it plans to shut down, and 679 of its employees in southwestern Pennsylvania learned they will lose their jobs by the end of the year. The same day, the autonomous vehicle sector scored a big win in the Pennsylvania legislature, with both houses voting to permit the use of self-driving vehicles on public roads without a human operator present.
Democratic Gov. Tom Wolf still must sign the bill, but a spokesperson said the governor supports it.
“For us … this [bill’s passage] is probably timed just right for where we are in our development, and so it couldn't have come at a better time for us,” said Finch Fulton, vice president of policy and strategy at autonomous trucking startup Locomation.
Based in Lawrenceville, Locomation aims next year to reduce the number of drivers in its long-haul trucking system.
“Now, we can do that [in Pennsylvania], which means we don't have to send people elsewhere and pay those travel costs and send the trucks elsewhere,” Fulton said, alluding to the legislation. “So, we can grow more organically and make sure that Pennsylvania reaps the benefits.”
Fulton acknowledged that Locomation furloughed employees earlier this month, joining a trend of downsizing at the nation's tech firms. He said roughly 100 people work at Locomation today but declined to say how many jobs were cut.
“The tech sector as a whole is passing through the eye of the needle right now,” he said. “And so everybody's trying to look at how you can reduce costs and how you can make sure that you have as long of a runway as possible. And that's just what we're dealing with, and that's what a lot of other companies are dealing with.”
He said Locomation remains in a strong position with its specialization in trucking. The freight hauling sector faces a massive driver shortage, and Finch said autonomous tech could keep carriers running round-the-clock. Argo, by contrast, had invested heavily in urban ride-hailing and delivery services. One of its primary backers, Ford Motor Co. began to pull back on the idea this year, seeing more lucrative opportunities in developing advanced driver assistance systems.
Like Locomation, Pittsburgh’s other major self-driving tech startup, Aurora Innovation, focuses primarily on trucking, although its model involves a higher degree of automation. Aurora is also developing autonomous Toyota Sienna minivans.
It employs 1,600 people nationally, and 800 of them reside in the Pittsburgh area, according to Matt Blackburn, a lobbyist at the company. He said Aurora continues to grow.
“We're continuing to hire employees. We have a very clear product roadmap. … And I think we're very clear-eyed, and we're very focused on that roadmap,” he said.
Aurora has experienced hiccups, however: This summer, it said supply chain disruptions had forced it to delay the commercial launch of its trucking platform by one year, until late 2024. Like companies across the sector, it has yet to turn a profit.
“Self-driving technology's hard, and it's expensive,” Blackburn said. But policies such as the one Pennsylvania lawmakers approved Wednesday help to ease the undertaking, he said.
“The states and the regulators have to be able to communicate a desire to see this [work] remain in their state and grow in their state,” he said. “It makes people feel like Pennsylvania is looking into the future. That's what this is really about: How does Pennsylvania stay competitive in a global economy?”
An emerging yet fragile industry
Roughly two dozen states already allow highly automated vehicles on roadways without licensed drivers at the wheel, according to the Insurance Institute for Highway Safety and Highway Loss Data Institute. Aurora tests its autonomous line-haul trucking system in Texas and plans to expand to other Sun Belt states that also allow on-road testing in the absence of humans, though the company still requires humans to be in the driver’s seat.
Blackburn said Aurora has yet to determine when it could pilot trucks in Pennsylvania. But he said, “It's an option for us now in a way that it certainly wasn't before.”
Clarion County Republican Donna Oberlander proposed the loosened regulations in January. She noted at the time that Pittsburgh has become a hub for self-driving tech development, with the broader robotics and autonomy sector employing some 7,000 people locally, according to the Regional Industrial Development Corporation.
The Pittsburgh-based organization said that figure could grow by the thousands in the next five years, given a favorable regulatory environment. Driverless tech firms will need to hire local technicians and depot operators to service equipment, and the companies could also purchase auto parts from local manufacturers, the group said.
Its president, Don Smith, said Argo’s closure is “a major disappointment and a blow to the growth of the cluster [of local autonomous mobility companies in southwestern Pennsylvania] in the short term.”
“But I don't think in any way, this signals that we should give up on autonomous vehicles or that the future for them isn't bright,” he continued. “You have entrants that come in and entrants that go out, and there's a lot of change and turmoil, especially in the early days of technology.”
“One of the things that Argo did that was great,” he added, “is they brought a ton of really talented people to our region. And I fully expect that that talent base will be absorbed into other companies in the sector and related ones and will continue to grow the cluster [in the Pittsburgh area].”
Ford said it is considering taking over at least some of Argo’s office space in the Strip District while also hiring several hundred of the startup’s former employees, the Pittsburgh Business Times reported Thursday. The outlet estimates that 800 of Argo’s 2,000 employees had resided in the Pittsburgh area. Ford invested more than $1 billion in Argo.
The votes in Harrisburg Wednesday to relax state regulations on autonomous vehicles further increase the odds that more jobs will stay in the region, Pennsylvania Chamber of Commerce president and CEO Luke Bernstein said in a statement. “This bill takes a giant step toward cementing us as a prime location for companies to design, build and export automated vehicles across the nation and around the world,” he said.
Rules of the road
The proposal now awaiting Gov. Wolf’s signature would require autonomous vehicles to be capable of complying with applicable traffic and motor vehicle safety laws unless the state’s Department of Transportation, PennDOT, grants an exemption.
The measure also would allow groups of up to three electronically-linked vehicles to operate on limited-access and interstate highways. A driver would have to sit in the lead vehicle, but one of the other vehicles could follow without a human at the wheel.
Locomation uses this “platooning” method with its freight carriers, though its convoys consist of just two trucks. One driver operates the lead vehicle while another rests in the follower vehicle. With this approach, Locomation says, carriers can double the amount of time each truck remains in transit and, thus, move more cargo over greater distances.
Wednesday’s votes occurred largely along party lines, with many Democrats opposed. Critics have previously warned that self-driving cars would pose safety risks if deployed prematurely. Others have voiced concerns about the technology’s potential to displace workers in trucking, bus driving, and other transportation professions.
The legislation includes numerous safety provisions. For example, it would require a vehicle to reach a stable, stopped position if its automated system fails. Companies or institutions that are certified to operate the vehicles would have to report any crashes that result in injury, death or property damage to PennDOT within at least six hours.
They would also be required to maintain liability insurance that covers at least $1 million per accident involving a third party.
PennDOT would post a list on its website of entities that hold certificates to operate self-driving vehicles and where those parties plan to use the vehicles. The agency would also review how emergency service responders should interact with vehicles that do not have a driver on board.
A 20-member advisory panel would guide Pennsylvania's transportation secretary on implementing the proposed legislation. In addition to state and local policymakers, the body would include representatives for bicyclists, pedestrians, drivers, tech firms, vehicle manufacturers, insurance companies, and other stakeholders.
In most cases, municipalities would be prohibited from enacting their own restrictions on self-driving vehicles.
The bill also includes a provision that outlaws the theft of catalytic converters. Located beneath a car’s exhaust system, the devices convert engine exhaust into less environmentally harmful gasses. Thieves prize the components because they contain expensive precious metals.
The provision to penalize such offenders would take effect 60 days after the bill becomes law.
PennDOT would issue temporary regulations to govern the rest of the bill immediately following its enactment, though the rules wouldn’t take effect for another eight months. And after two years, they would be replaced by permanent rules that would first be subject to public comment.
