Elon Musk Is Putting Wireless Service on the Moon (So If You Go There, You Can Watch Netflix)

It’s been 50 years since humans first landed on the Moon and we haven’t done much there since. But Elon Musk is hoping that will change very soon. He already believes there should be a base on the Moon to fire up public interest in space exploration. Then in December, President Donald Trump announced that he wanted to send astronauts back to the moon as a first step toward more distant objectives, such as Mars, where Musk is already planning to land humans sometime within the coming decade.

Musk has also said that his company SpaceX would not build a moon base although it might ferry people and materials there from Earth. But it apparently is ready to help with something else every lunar visitor needs: a way to contact people at home, communicate with other lunar visitors–and watch Netflix during off hours.

So SpaceX, along with mobile network company Vodafone, Nokia, and Audi, will be building a 4G network on the moon in 2019. Even though 5G networks are being built here on Earth, the partners chose 4G because its technology is both more stable and more able to withstand space travel. 

OK, but why build a wireless network on the Moon so soon, when nobody lives there? It’s true that Musk has said he would take space tourists to the moon in late 2018, and indeed had already collected large deposits from two wealthy individuals for the first such trip. But the planned trip is only a Moon fly-by with no landing, so the lunar tourists won’t get much of a chance to use the Moon’s wireless network. And they won’t need it, having the ship’s communication system at their’ disposal. Besides, the pricey lunar fly-by was meant to take place using a Crew Dragon capsule carried by a Falcon Heavy rocket, the same rocket that spectacularly took off earlier this month with a red Tesla Roadster and mannequin dubbed “Starman.” But Musk has said SpaceX is now focusing its attention on its BFR Rocket (for Big Fucking Rocket) and he indicated it may not do much more testing on the Falcon Heavy after all, possibly leaving Moon tourism in limbo. 

According to one report, the purpose of lunar 4G would be to support future lunar missions. Without it, humans and vehicles (such as the lunar rovers Audi is building) could only communicate by beaming signals down to the Earth and back up again. The fact that the planned network will have enough bandwidth to support video streaming raises the appealing prospect of a lunar webcam all of us could watch over the Internet. 

And of course, it’ll come in very handy for space tourists visiting the lunar surface or astronauts working to build a Moon base or on other projects. Maybe someday soon.

China startup Nio hires eight banks for up to $2 billion U.S. IPO: sources

HONG KONG (Reuters) – Chinese electric vehicle startup Nio has hired eight banks including Morgan Stanley (MS.N) and Goldman Sachs (GS.N) to work on a planned U.S. stock market listing this year worth up to $2 billion, people with knowledge of the matter told Reuters.

Other banks are Bank of America Merrill Lynch (BAC.N), Credit Suisse (CSGN.S), Citigroup (C.N), Deutsche Bank (DBKGn.DE), JPMorgan (JPM.N) and UBS (UBSG.S), said the people, declining to be identified as the deal details are not public.

Nio’s proposed IPO of $1 billion-$2 billion comes as the firm, founded by Chinese internet entrepreneur William Li in 2014, seeks fresh capital to finance its expansion and investments in areas including autonomous driving and battery technologies, one of them said.

At the top end of the potential offering size, Nio’s IPO would become the biggest Chinese listing in America since the $25 billion public float of e-commerce giant Alibaba Group Holding Ltd (BABA.N) in 2014. In October 2016, Chinese logistics company ZTO Express raised $1.41 billion from an IPO in New York.

FILE PHOTO: The logo of electric car startup NIO is seen at a new NIO House “brand-experience” store, in Beijing, China November 25, 2017. REUTERS/Norihiko Shirouzu/File Photo

Nio declined to comment on its IPO plans. UBS, Citigroup and Goldman declined comment while the other banks did not immediately respond to Reuters emailed request for comment.

Shanghai-based Nio, formerly known as NextEV, is among the first of a raft of Chinese electric vehicle firms to launch a production vehicle, with many so far only showing concept cars.

It launched sales of its first mass production car – the ES8 pure-electric, seven-seat sport-utility vehicle in December, at about half the price of American peer Tesla’s Model X. It has also vowed to bring an autonomous electric car to the U.S. market by 2020.

Nio counts Asian tech behemoth Tencent Holdings Ltd (0700.HK) as its main backer alongside investment firms Hillhouse Capital Group and Sequoia Capital.

Last November, the firm raised more than $1 billion in its latest fundraising round, led by existing investor Tencent, valuing the firm at about $5 billion.

Reporting by Fiona Lau of IFR and Julie Zhu; Editing by Sumeet Chatterjee and Stephen Coates

Two Singapore Airbnb hosts plead guilty to unauthorized short-term rentals

SINGAPORE (Reuters) – Two Singaporeans on trial for unauthorized short-term rentals posted on Airbnb pleaded guilty in court on Tuesday in the first such cases under the city-state’s rules on short-term property letting introduced last year.

The two men were charged for letting four units in a condominium for less than six months without permission from Singapore’s Urban Redevelopment Authority and face a fine of up to S$200,000 ($152,000) per offense.

Prosecutors however requested fines of S$20,000 per charge for a total of S$80,000 for each of the two defendants, who spoke in court to plead guilty to the charges. Defense lawyers sought fines of $5,000 per charge.

The Singapore government has pledged to seek public feedback on a regulatory framework covering such rentals after the cases of the two hosts prompted a plea from Airbnb that the existing framework was “untenable”.

Airbnb, founded in 2008 in San Francisco, matches people wishing to rent out all or part of their homes to temporary guests.

The firm has clashed with hoteliers and authorities in cities including New York, Amsterdam, Berlin and Paris, which are limiting short-term rentals in some cases.

Critics blame Airbnb for exacerbating housing shortages and driving out lower-income residents.

Writing by Jack Kim; Editing by Paul Tait

America's Most-Hated CEO Got Buff in Prison, and People Actually Like Him There. (Here's What Happened)

Maybe you remember Martin Shkreli, who first became famous as the so-called “Pharma Bro” back in 2015 (and then, the “most hated CEO in America.”

This was after his company increased the the cost of a drug used to treat malaria, cancer, and AIDS by 5,455 percent (from $13.50 to $750 a tablet).

Then, he started a PR and social media campaign to suggest that anyone who didn’t like what he did was stupid. 

It explains the explosion of schadenfreude when he was later indicted and found guilty in a completely unrelated stock fraud case.

And it also explains the metaphorical gasp that was heard across the Internet when Shkreli’s bail was revoked, and he was sent to the Brooklyn federal detention center in September. 

It’s a rough place, and a lot of people wondered whether a skinny, young, rich guy like Shkreli, who seems to have a really hard time keeping his mouth shut, might also have a really hard time not getting pushed around–or worse.

Heck, even one of his good friends out here in the free world told a newspaper she was worried for his safety in jail, because “he’s not a popular person. “People threaten him on the Internet every day.”

But it turns out, they needn’t have worried. Shkreli apparently has turned on the charm–and also reportedly hit the gym.

Shkreli was back in court, where the federal government is trying to get him sentenced to a lengthy prison term, and also convince a judge to make him forfeit $7.3 million in assets. 

There was no decision from the judge–he’ll be sentenced in March and faces a possible 20 years. But the New York Post reports Shkreli has “bulked up in prison” and is getting along fine.

There are no photos, only courtroom sketches, but at least according to the Post, Shkreli looked a lot harder and stronger under his blue jail uniform. 

“He’s got his prison muscles, the Post quotes a “source close to the defense” as saying. “They like him in there. … They don’t put their arms around him and say ‘Give me your money’ like they do to other new prisoners… they like him.”

Shkreli’s real danger might stem from how the judge in his case calculates the amount of money (if any) that his victims lost as a result of his fraud and conspiracy convictions.

Shkreli’s lawyers claims they didn’t actually lose anything–the government contends it’s between $9 million and $20 million, and possibly more. The distinction could mean the difference between a sentence of 16 months or less, or else one that could potentially last decades, according to CNBC.

In addition to Shkreli’s appearance in court, we’ve had a few other insights over the past few months into how he’s been faring behind bars.

For one thing, he’s still posting on Facebook occasionally–or at least, a friend with access to his account is apparently doing so on his behalf. 

There are also two letters that he’s sent which have been made public–one to a friend named Lisa Whisnant, and the other to a Brooklyn-based media company called The Tab. He seemed like he was doing okay in both letters.

“Jail has some redeeming qualities,” he wrote to The Tab. “It’s probably the most social environment I’ve been in. … [T]here is camaraderie akin to a military setting. You learn just how lucky you are, you help others out, learn cool slang, watch BET all day. Great times!”

Separately, he wrote Whisnant, “Things are not THAT awful here. … There are some bright sides. I am teaching these prisoners some new things and hopefully some ways to change their lives.”

As part of that effort, Shkreli was looking for books–including a dozen copies of Spencer Johnson’s Who Moved My Cheese. Self-help books like that are a coveted commodity behind bars, the Post reported.

In case you’d like to get to know the so-called world’s most-hated CEO, or else just do something nice for a few thousand men confined at the federal detention center in Brooklyn (or, if you’re just curious), here’s the list of books Shrekli apparently wanted.

You’ll also need the federal website where you can look him up to send mail or packages from direct-mail retailers.

Crypto 'noobs' learn to cope with wild swings in digital coins

NEW YORK (Reuters) – After researching digital currencies for work last year, personal finance writer J.R. Duren hopped on his own crypto-rollercoaster.

Duren bought $5 worth of litecoin in November, and eventually purchased $400 more, mostly with his credit card. In just a few months, he experienced a rally, a crash and a recovery, with the adrenaline highs and lows that come along.

“At first, I was freaking out,” Duren said about watching his portfolio plunge 40 percent at one point. “The precipitous drop came as a shock.”

The 39-year-old Floridian is part of the new class of crypto-investors who do not necessarily think bitcoin will replace the U.S. dollar, or that blockchain will revolutionize modern finance or that dentists should have their own currency.

Dubbed by longtime crypto-investors as “the noobs”– online lingo for “newbies” – they are ordinary investors hopping onto the latest trend, often with little understanding of how cryptocurrencies work or why they exist.

“There has been a big shift in the type of investors we have seen in crypto over the past year,” said Angela Walch, a fellow at the UCL Centre for Blockchain Technologies. “It’s shifted from a small group of techies to average Joes. I overhear conversations about cryptocurrencies everywhere, in coffee shops and airports.”

Walch and other experts cited parallels to the late-1990s, when retail investors jumped into stocks like Pets.com, a short-lived online seller of pet supplies, only to watch their wealth evaporate when the dot-com bubble burst.

Bitcoin is the best-known virtual currency but there are now more than 1,500 to choose from, according to market data website CoinMarketCap, ranging from popular coins like ether and ripple to obscure coins like dentacoin, the one intended for dentists.

Exactly how many “noobs” bought into the craze last year is unclear because each transaction is pseudonymous, meaning it is linked to a unique digital address, and few exchanges collect or share detailed information about their users.

A variety of consumer-friendly websites have made investing much easier, and online forums are now filled with posts from ordinary retail investors who were rarely spotted on the cryptocurrency pages of social news hub Reddit before.

Reuters interviewed eight people who recently made their first foray into digital currency investing. Many were motivated by a fear of missing out on profits during what seemed like a never-ending rally last year.

One bitcoin was worth almost $20,000 in December, up around 1,900 percent from the start of 2017. As of Friday afternoon it was worth about $10,000 after having fallen as much as 70 percent from its peak. Other coins made even bigger gains and experienced equally dizzying drops over that time frame.

“There was that two-month period last year where all the virtual currencies kept going and up and I had a couple of friends that had invested and they had made five-figure returns,” said Michael Brown, a research analyst in New Jersey, who said he bought around $1,000 worth of ether in December.

“I got swept by the media frenzy,” he said. “You never hear stories of people losing money.”

In the weeks after Brown invested, his holdings soared as much as 75 percent and tumbled as much as 59 percent.

BUY AND “HODL”

Investors who got into bitcoin before its 2013 crash like to refer to themselves as “OGs,” short for “original gangsters.” They tend to shrug off the recent downturn, arguing that cryptocurrencies will be worth much more in the future.

“As crashes go, this is one of the biggest,” said Xavier Levenfiche, who first invested in cryptocurrencies in 2011. “But, in the grand scheme of things, it’s a hiccup on the road to greatness.”

Spooked by the sudden fall but not willing to book a loss, many investors are embracing a mantra known as “HODL.” The term stems from a misspelled post on an online forum during the cryptocurrency crash in 2013, when a user wrote he was “hodling” his bitcoin, instead of “holding.”

Mike Gnitecki, for instance, bought one bitcoin at around $18,000 in December and was sitting on a 43 percent decline as of Friday, waiting for a recovery.

“I view it as having been a fun side investment similar to a gamble,” said Gnitecki, a paramedic from Texas. “Clearly I lost some money on this particular gamble.”

Duren, the personal finance writer, is also holding onto his litecoin for now, though he regrets having spent $33 on credit card and exchange fees for a $405 investment.

Some retail investors who went big into cryptocurrencies for the first time during the rally last year remain positive.

Didi Taihuttu announced in October that he and his family had sold everything they owned — including their business, home, cars and toys — to move to a “digital nomad” camp in Thailand.

In an interview, Taihuttu said he has no regrets. The crypto-day-trader’s portfolio is in the black, and he predicts one bitcoin will be worth between $30,000 and $50,000 by year-end.

His backup plan is to write a book and perhaps make a movie about his family’s experience.

“We are not it in it to become bitcoin millionaires,” Taihuttu said.

Reporting by Anna Irrera; Editing by Steve Orlofsky; Editing by Lauren Tara LaCapra

Yes, Uber Really Is Killing the Parking Business

An email from the CEO of a national parking operator has added some detail to the impact ride-hailing services like Uber and Lyft are having on demand for parking. The picture, at least for those trying to rent you a parking spot, is bleak.

In the email, unearthed from a company report by the San Diego Union-Tribune, Ace Parking CEO John Baumgardner says that demand for parking at hotels in San Diego has dropped by 5 to 10%, while restaurant valet demand is down 25%. The biggest drop, unsurprisingly, has been at nightclubs, where demand for valet parking has dropped a whopping 50%.

The numbers appear to be estimates, and Baumgardner doesn’t describe a timeframe for the declines. The assessment, written in September of last year, is also limited to San Diego, though an Ace Parking executive told the Union-Tribune that it has seen “similar” declines at its 750 parking operations around the United States. The company is focused on using technology, including better parking scheduling and booking options, to remain healthy.

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But much more is at stake than the revenues of the parking business – cities stand to benefit immensely as demand for parking drops. Parking spaces and lots generate relatively little tax revenue or economic activity relative to commercial operations, and by increasing sprawl may actually harm the economy of cities like Los Angeles.

Even back in 2015, cities were already relaxing zoning requirements that set minimum parking allotments, and there are now even more signs that city planners are thinking differently about parking. Perhaps most dramatically, a new Major League Soccer stadium being planned for David Beckham’s Miami expansion team may include no new parking at all – but will have designated pickup zones for Uber and Lyft.

The decline of parking will only be accelerated if and when autonomous vehicles become widespread. That sea-change which will make it easier to locate parking at a distance from urban destinations, and could further reduce car ownership. That will be bad news for the Ace Parkings of the world – but everyone else should welcome the decline of the urban parking lot.

Delta Just Made a Mess of a Wonderful PR Opportunity With the Victorious U.S. Curling Team (Can United Take Advantage?)

Absurdly Driven looks at the world of business with a skeptical eye and a firmly rooted tongue in cheek. 

For most of their lives, Americans don’t care about curling.

On Friday night, however, many were riveted to heavy kettles sliding down the ice, as grown men manically swept away like cleaners on cocaine.

They were even shrieking in Hoboken when they should have been in bed. 

And then the U.S. Curling team won.

The same U.S. Curling team that, four years ago, had their captain John Shuster described by Deadspin as “the choking captain of our choking team of choking curlers.”

Some Americans just can’t bear losing.

You might imagine that the victorious U.S Curling Team is in a good mood.

So its governing body took to Twitter to make a small request of Delta Air Lines.

Perhaps they were joking. Perhaps they were hoping.

I’m a little of both when I occasionally try to incite the sympathy of an airline check-in agent.

Oh, but look how Delta replied.

Oh, no, no, no. 

Ten tons of no.

There aren’t enough no’s to sufficiently express quite what a no response this is.

Naturally, I can see that some might praise the airline for its deep-seated lurch toward equality. 

But the administrative neutrality of the tone was desperately inappropriate.

Delta surely had alternatives.

These men are folk heroes. At least for this weekend. 

Give them something and you’ll get lovely PR from it.

The airline could, for example, have teased U.S.A. Curling to switch to Direct Message and worked something out that would have delighted the team and made Delta look good.

That’s what often happens when a passenger has a complaint. The airline immediately asks them to switch to private communication.

Delta could have worked out a promotional deal. It could have agreed to ferry the team on some sort of goodwill tour around the chillier, snowier parts of America. 

It could have created a special celebration for the team when it got home.

Instead, oh, this. Ugh, this.

The tweet didn’t even say whether the flight was full and therefore its hands were tied.

I contacted the airline to ask if this was the case and will update, should I get wind.

So now United Airlines, it’s for you to knock that Delta kettle out of the airline PR circle thingy and score a fiver. (This is curling terminology, of course.)

United, you’re an Olympic sponsor, after all.

Lay on a special plane, one in which the team can actual curl down the aisle.

The PR would be worth millions.

Three Ways Business Leaders Can Use AI Right Now

AI has enormous potential to reshape business, as most business leaders recognize. In a global study published by the Boston Consulting Group and MIT Sloan Management Review, 84 percent of the 3,000 business leaders interviewed expect AI to give them a competitive advantage.

Despite the anticipation, though, AI is still vastly underutilized in many of today’s industries. Only 23 percent of the leaders surveyed had already incorporated AI into their business models. This could put businesses that aren’t utilizing AI at a huge disadvantage compared to companies that have already adopted the technology and excelled at its integration.

Each industry has unique uses for any technology, including artificial intelligence. By understanding those uses and investing in the appropriate AI solutions, businesses that lag behind can still catch up in time to participate in the AI revolution.

Three Techniques For Any Business To Utilize AI

Much of what we hear about AI is presented in a futuristic manner, but the technology is already becoming a vital part of numerous industries. While a majority of business leaders have yet to implement it, many others are already taking advantage of the edge that AI gives them in several different ways.

1. Using anomaly detection to monitor equipment health

The focus of maintenance has always been prevention. Routine, often redundant, service schedules have been necessary for companies to avoid equipment failure. But routine maintenance also produces a lot of waste, and it isn’t always successful.

Instead, companies now are turning more toward cognitive anomaly detection and prediction, which utilizes AI to harness terabytes of real-time data about a machine’s operations. DataRPM, a Progress company, which provides predictive maintenance solutions and products that help detect anomalies through Cognitive Anomaly Detection and Prediction (CADP), explains that data collected from machinery can indicate when performance is declining. That means a technician can get involved before the equipment fails or shuts down.

Consequently, companies can address anomalies long before they lead to equipment crashes, lengthy downtimes, and lost productivity and revenue.

2. Managing IT security intrusions

Computers interact best with each other, and the IT realm uses that fact for a variety of IT security and support functions. As hackers and bad actors from around the world continue ramping up cyberattacks, IT teams can use AI to more easily track hackers’ movements within a system and shut them out faster.

As reported in Harvard Business Review, a 2017 global study by Tata Consultancy Services found that 44 percent of companies surveyed were using AI “in detecting and fending off computer security intrusions in the IT department.”

As one of the most significant technological advances in modern times, AI has–not surprisingly–made the biggest impact on IT professionals. In addition to its cybersecurity applications, AI also helps resolve tech support issues, makes it easier to adopt new technologies, and ensures that no unsafe machines are connected to corporate networks.

3. Engaging better with customers

At first glance, marketing may not seem on par with manufacturing and IT security when it comes to AI adoption. Yet marketers and brands are beginning to use the technology to greatly enhance how they interact with consumers.

AI helps companies create the products and services that customers want, and it enables them to improve customer relationships in a world where interactions are increasingly digital.

How does AI do this? Dara Treseder, CMO for GE Ventures, discussed AI during a presentation at MediaLink + CDX Brand Innovation Salon in January, explaining that CMOs can start to leverage data to better understand who their customers are and adopt a deeper, more personal approach to customer engagement.

Like Amazon and Netflix, which use AI to personalize recommendations based on user activity, other companies can leverage the technology to keep their consumers engaged as well. Treseder mentioned the San Francisco Museum of Art, which uses an AI bot to serve up art on demand, as a prime example of this engagement.

Art lovers can text a keyword–even an emoji–and receive a text back directing them to a piece of art in the museum’s collection that matches what they sent. Treseder also pointed to Nike’s AI-driven interactive design experience, which uses motion capture and projection mapping to allow customers to customize their shoes in-store.

When we think of artificial intelligence, many of us still consider it somewhat of a sci-fi notion or even a threat that should be avoided at all costs. The truth, though, is that AI is a current technology, not a future concept. Business leaders must start recognizing its importance, or their consumers will migrate toward businesses that do.

The 3 Biggest Mistakes Leaders Make in Managing Their Brands

According to one study from Burson-Marsteller, 48 percent of a company’s reputation can be attributed to the standing of its CEO.

For better or worse, having an active CEO brand is no longer an option. And while there is a growing understanding of the importance of creating a CEO brand, many leaders still aren’t maximizing their personal brands to benefit their businesses.

The leaders I coach seem to fall into three branding categories:

  • It’s not about me; it’s about my company. I don’t want to draw that much attention to myself.
  • I know I need to be creating more of a brand as a CEO, but I don’t know how to do it.
  • I’m actively engaged in creating a CEO brand, but not getting traction.

More often than not, these well-meaning leaders are misunderstanding and usually mismanaging their CEO brands in three major ways:

1. Not thinking you need one.

I know I’m in for a long, hard, uphill battle when I get a call from a CEO (or their assistant) telling me that he or she is being told they “need” to create a CEO brand, but they:

a) Don’t understand why.

b) Don’t want to.

c) Hate this whole idea.

Often, these leaders haven’t distinguished the need for what I call a “parallel brand”–the perfect blend of a CEO’s personal and company brands. While remaining distinct, these two brands complement each other, simultaneously enhancing the reputation of both the CEO and the business.

2. Delegating your CEO brand.

I often hear from an executive assistant or marketing director tasked with researching the field of available providers and sorting out a short list of candidates to work with their boss on creating a CEO brand.

Too often, however, I find that proposals are being requested prior to a conversation with the CEO themselves. I usually counsel the CEO’s agent against this, since it’s detrimental to the long-term outcome.

Why? As highly skilled as these folks usually are, effective CEO branding isn’t a transactional relationship. Working with leaders on their brands is a very personal experience, blending executive coaching, media training, PR, and personal brand management.

You can’t delegate this.

3. Confusing CEO branding with PR.

While media placement in radio, TV, magazines, newspapers, and blogs is an important part of shaping a leader’s brand, it’s really just one aspect. It’s rarely enough to shape a powerful public narrative.

In my experience, there are four specific areas that require attention to build a robust CEO brand:

Reputation management.

This can be both large and small: claiming the CEO’s name as a URL, getting personal social media, staying on top of search engines to update old photos and information, and much more.

Additionally, being a social CEO is a key way to manage CEO reputation. According to one report by BRANDfog, 75 percent of those surveyed perceive that C-Suite and executive leadership is improved by participation on social media. 

Thought leadership.

A big part of developing a CEO brand is deciding what role thought leadership should play. What impact will a thought leadership strategy have on you and your organization, and how can you align it with your larger organizational goals?

The activities of thought leadership for CEO branding vary greatly depending on the answers to these questions and can include traditional PR and media placement, awards, targeted public speaking, publishing a book, and more.

Content marketing.

This is one of the best ways to gain ground in CEO branding, yet it is often considered a second cousin to traditional PR activities when it comes to thought leadership. A robust content marketing strategy is a powerful part of establishing a CEO’s brand. Depending on the individual’s talents and capabilities, tactics can include:

  • A regular CEO blog
  • Writing articles
  • Publishing white papers
  • A weekly podcast
  • An e-book

Executive presence.

Several years ago, the Center for Talent Innovation did a study on executive presence and found that there were six core traits that determined the degree to which an individual leader was seen as having a strong, positive executive presence. They were:

  • Confidence
  • Decisiveness
  • Integrity
  • Emotional intelligence
  • Vision
  • Reputation

The bottom line is that these same qualities are essential to creating a powerful CEO brand. In fact, much of the work I end up doing with leaders is helping them strengthen and translate these same attributes into media readiness, personal brand messaging, and even personal brand identity collateral.

If all of this sounds like a lot of work — it is. But in a world where almost all information is available on anyone at the click on a keyboard, having a strong CEO brand is not a luxury, but a necessity. So the only question that remains for the modern CEO is not “Am I going to do this?” but “How well?”

With Easy Ride trial, Nissan takes new step toward being Uber competitor

YOKOHAMA (Reuters) – Facing a future in which self-driving cars may curb vehicle ownership, Nissan Motor Co is taking its first steps to becoming an operator of autonomous transportation services, hoping to break into a segment set to be dominated by Uber Technologies and other technology firms.

In partnership with Japanese mobile gaming platform operator DeNA Co, the automaker will begin public field tests of its Easy Ride service in Yokohama next month, becoming among the first major automakers anywhere to test ride-hailing software developed in-house, using its own fleet of self-driving electric cars.

Easy Ride, which Nissan plans to launch in Japan in the early 2020s, is meant to feel more like a concierge service on wheels, making – for example – restaurant recommendations while the car is on the move.

The announcement follows an agreement by Nissan and its automaking partners Renault SA and Mitsubishi Motors Corp earlier this month to explore future cooperation with Chinese transportation services conglomerate Didi Chuxing.

These moves mark a push by the automaker to avoid becoming the “Foxconn of the auto industry”: a mere vehicle supplier to ride- and car-sharing companies.

“We realize that it’s going to take time to become a service operator, but we want to enter into this segment by partnering with companies which are experts in the field,” Nissan’s chief executive, Hiroto Saikawa, told Reuters in an interview this month.

A person close to the deal has said that the agreement is intended to explore opportunities for Nissan and others to supply battery-electric cars to Didi Chuxing for a new electric car-sharing service it is setting up in China.

He noted however that Nissan and its alliance partners could explore a broader agreement, which might possibly involve Nissan providing self-driving taxi technology to the dominant Chinese ride-hailing service.

NICHE MARKET

A self-driving vehicle, based on Nissan Leaf electric vehicle (EV), for Easy Ride service, developed by Nissan and mobile gaming platform operator DeNA Co, is seen during its media preview in Yokohama, Japan, February 21, 2018. Picture taken February 21, 2018. REUTERS/Toru Hanai

Creating an upscale autonomous taxi service, rather than trying to beat other companies on price, could help Nissan against bigger competitors like Uber, market experts say.

“By doing something with a more premium feel, it could allow Nissan to charge more for its service and potentially relieve some of that profitability pressure they could face if they were to try to race to the bottom in terms of pricing,” said Jeremy Carlson, automotive analyst at IHS Markit.

Automakers are looking for ways to profit from the rise of car-sharing services, which along with self-driving cars, are likely to lead to a decrease vehicle ownership and chip away at future profits.

Slideshow (4 Images)

IHS Markit expects global sales of autonomous vehicles will soar to more than 33 million units in 2040 from 51,000 in 2021, while Goldman Sachs has predicted that the ride-hailing market will grow eightfold by 2030 to be five times the current size of the taxi market.

Nissan has embraced new technologies, launching the Leaf, the world’s first mass-market electric car, in 2010. The company was an early proponent of self-driving cars, pledging in 2013 that it would market fully autonomous cars in 2020.

Although it has been rolling out automated highway driving functions and self-parking capabilities in a growing number of its models, rivals ranging from Tesla Inc to Subaru Corp have installed increasingly advanced self-driving features in their cars.

GM and Daimler AG are building and expanding car- sharing services, and GM has said it plans to launch a self-driving taxi service next year.

Nissan also has its own car-sharing service using its ultra-compact battery electric models, but after years of trials, the service is available only in Yokohama, home to the automaker’s headquarters.

After bringing in Ogi Redzic, who previously led the automotive business group of mapping data firm Here Technologies, to head Renault-Nissan’s mobility services division in early 2016, Nissan in the past year or so has begun to gear up its strategy to compete in the new transportation area.

Its partner DeNA is one of the world’s biggest social gaming networks with 30 million users. The company’s expertise in developing real-time user interfaces and payment systems will help give shape to the taxi service platform.

The company already operates a user-sourced car-sharing app in Japan, and had been developing a self-driving taxi system with a Japanese robotics start-up before teaming up with Nissan.

Additional reporting by Norihiko Shirouzu in BeijingEditing by Gerry Doyle