The world waits with anticipation as the forces driving technological change focus on transforming the automobile. Tesla Motors Inc. has set the bar for electric engines. But there are still safety questions surrounding the roll-out of autonomous vehicles.

Just how soon we will be commuting in an all-electric, autonomous car? It’s coming, said Rudy Burger (pictured), managing partner of Woodside Capital Partners and autonomous technology market expert. But it might not be the magic reveal we all expect.

“It’s better to think about autonomous vehicles as not being a revolutionary technology but much more of an evolutionary technology,” Burger said.

Rather than an overnight sensation,  cars will evolve “year by year until one year we wake up and: ‘Yep, my car will actually drive me all the way from home to work without me intervening,’” he added.

Burger joined Donald Klein, host of theCUBE, SiliconANGLE Media’s mobile livestreaming studio, for a CUBE Conversation at theCUBE’s studio in Palo Alto, California. They discussed the market for autonomous vehicles and ecosystem suppliers looking to tap into autonomous capabilities.

Prediction: Robo-taxis will beat personal autonomous cars to the streets

Thinking of an autonomous vehicle as a replacement for the personal car is only seeing half the equation, according to Burger. There are two distinct markets: personal and public transport.

While consumer vehicles that use automated driver-assist systems are the use case that many are eagerly anticipating, they are the less important market, according to Burger. He believes that robo-taxis — autonomous cars that are used in addition to or instead of traditional public transportation options — will be the first mainstream use cases.

“We’ve been misdirected to thinking about autonomous vehicles as a replacement for the car we drive to work every day,” Burger said. “I think that autonomous vehicles are going to show up in the market as an extension of public transportation.”

He gives the example of a commuter taking the train to work, then having a driverless car take him or her the last few miles.

Prediction: Uber will quit developing autonomous vehicles

One key player in the transportation market is Uber Technologies Inc. A pioneer in ride-share services, Uber is investing heavily in developing its own self-driving vehicles. The reason is simple: profit.

“If you can replace the driver with a computer, you can keep that vehicle on the road 24 by seven. And you can keep 100% of the revenue,” Burger said.

But this strategy is a mistake, according to Burger. He predicts that 2020 will be the year that Uber realizes that the funds currently spent on autonomous vehicle research and development are better spent elsewhere.

“My view, personal view, is that what Uber should be doing is saying, ‘That’s not our business,’” he said. Instead, the company, and others in the same sector, should wait and adopt the technology once it has been established as safe and reliable, he further explained.

Key technologies aim to imitate human eyes and brain

Just as humans use their eyes and brains to navigate around, so bringing autonomous vehicles into mainstream use requires the perfection of two technologies: artificial intelligence-infused software to be the “brains” of the vehicle and sensors that enable the computer vision, or “eyesight” of the car.

Sensors are a key feature of any self-driving vehicle, but the developers are going overboard with the number and variety that are used, according to Burger. Lidar, radar, ultrasound, and thermal imaging are all used in addition to cameras using complementary metal-oxide semiconductor chips — known as CMOS.

While some technologies have specific use cases — such as thermal imaging to see in the dark — the market is currently oversaturated with image sensors, according to Burger. This liberal “sprinkling” of sensors is due to safety concerns and overcompensation for technology that hasn’t yet matched the capabilities of the human eye.

Prediction: Lidar loses to CMOS

“My belief is that CMOS image sensors will evolve to a point at which they will replace the need for lidar in most applications,” Burger stated.

This controversial opinion is based on the fact that CMOS is the current market standard for image processing. CMOS chips are already embedded in millions of cameras worldwide. This makes the technology the obvious contender to win out in the autonomous vehicle market, according to Burger.

“It’s never a good idea to bet against the incumbent technology being able to scale into a new market. Every time people have done that, they’ve been wrong,” he said.

The low-cost and convenience of CMOS is another big advantage for the technology, especially for the consumer market where automotive profit margins are slim. “Automakers sweat the pennies,” Burger said. “Putting a $100 or $200 lidar in a vehicle is a big decision.”

So, when CMOS has the capability to replace lidar, Burger added, “… that’s what they’ll do.”

Another issue with lidar is the slow pace of the automotive industry. This makes raising capital a difficult task. “It’s probably going to be three, four, five years … before that technology really starts generating any significant volume and revenue. So, for many venture-backed companies, that’s too long,” Burger stated.

Software struggles in the hardware dominated automotive industry

The traditional manufacturing process for cars isn’t a good fit with the software industry in more than one way. First off, automotive is completely hardware focused. Adapting to this mentality, software providers have embedded their product into a piece of silicon — essentially making it a hardware part.

“The whole software licensing model hasn’t so far fit well with the automotive industry,” Burger stated.

Another problem is the lack of a standardized software platform.

“I can develop for Windows; I can develop for Mac; I can develop for an iPhone. … There’s no such thing in the automotive industry,” Burger said. This means that companies developing for autonomous vehicles have had to become a full-stack solution, providing everything from code to sensors.

The third issue is in the locked-in service agreements that automotive manufacturers have with their dealers. Tesla owners receive automatic software updates overnight, waking up to a car with new features.  This is currently impossible for any other vehicle, as even software updates require a trip to the dealership. So, while “over the next 12, 18 months, every automotive company is going to be coming out with their own flavor of electronic vehicle,” competing with Tesla is going to take more than building a comparable product, according to Burger.

“It’s not just a technology issue. The whole channel and way vehicles get sold is going to have to change,” Burger said.

Here’s the complete video interview, one of many CUBE Conversations from SiliconANGLE and theCUBE:

Photo: SiliconANGLE