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Waymo starts pilot in Phoenix, Apple gets more real and other news

Waymo (Google) has announced a pilot project in Phoenix offering a full ride service, with daily use, in their new minivans. Members of the public can sign up — the link is sure to be overwhelmed with applicants, but it has videos and more details — and some families are already participating. There’s also a Waymo Blog post. I was in Phoenix this morning as it turns out, but to tell real estate developers about robocars, not for this.

There are several things notable about Waymo’s pilot:

  1. They are attempting to cover a large area — they claim twice the size of San Francisco, or 90 square miles. That’s a lot. It’s enough to cover the vast majority of trips for some pilot users. In other words, this is the first pilot which can test what it’s like to offer a “car replacement.”
  2. They are pushing at families, which means even moving children, including those not of driving age. The mother in the video expects to use it to send some children to activities. While I am sure there will be safety drivers watching over things, trusting children to the vehicles is a big milestone. Google’s safety record (with safety drivers) suggests this is actually a very safe choice for the parents, but there is emotion over trusting children to robots (other than the ones that go up and down shafts in buildings.)
  3. In the videos, they are acting like there are no safety drivers, but there surely are, for legal reasons as well as safety.
  4. They are using the Pacifia minivans. The Firefly bubble cars are too slow for anything but neighbourhood operation. The minivans feature motorized doors, a feature which, though minor and commonplace, meets the image of what you want from a self-driving car.

Apple is in the game

There has been much speculation recently because of some departures from Apple’s car team that they had given up. In fact, last week they applied for self-driving car test plates for California. I never thought they had left the game.  read more »

How to do a low bandwidth, retinal resolution video call

Not everybody loves video calls, but there are times when they are great. I like them with family, and I try to insist on them when negotiating, because body language is important. So I’ve watched as we’ve increased the quality and ease of use.

The ultimate goals would be “retinal” resolution — where the resolution surpasses your eye — along with high dynamic range, stereo, light field, telepresence mobility and VR/AR with headset image removal. Eventually we’ll be able to make a video call or telepresence experience so good it’s a little hard to tell from actually being there. This will affect how much we fly for business meetings, travel inside towns, life for bedridden and low mobility people and more.

Here’s a proposal for how to provide that very high or retinal resolution without needing hundreds of megabits of high quality bandwidth.

Many people have observed that the human eye is high resolution on in the center of attention, known as the fovea centralis. If you make a display that’s sharp where a person is looking, and blurry out at the edges, the eye won’t notice — until of course it quickly moves to another section of the image and the brain will show you the tunnel vision.

Decades ago, people designing flight simulators combined “gaze tracking,” where you spot in real time where a person is looking with the foveal concept so that the simulator only rendered the scene in high resolution where the pilot’s eyes were. In those days in particular, rendering a whole immersive scene at high resolution wasn’t possible. Even today it’s a bit expensive. The trick is you have to be fast — when the eye darts to a new location, you have to render it at high-res within milliseconds, or we notice. Of course, to an outside viewer, such a system looks crazy, and with today’s technology, it’s still challenging to make it work.

With a video call, it’s even more challenging. If a person moves their eyes (or in AR/VR their head) and you need to get a high resolution stream of the new point of attention, it can take a long time — perhaps hundreds of milliseconds — to send that signal to the remote camera, have it adjust the feed, and then get that new feed back to you. There is no way the user will not see their new target as blurry for way too long. While it would still be workable, it will not be comfortable or seem real. For VR video conferencing it’s even an issue for people turning their head. For now, to get a high resolution remote VR experience would require sending probably a half-sphere of full resolution video. The delay is probably tolerable if the person wants to turn their head enough to look behind them.

One opposite approach being taken for low bandwidth video is the use of “avatars” — animated cartoons of the other speaker which are driven by motion capture on the other end. You’ve seen characters in movies like Sméagol, the blue Na’vi of the movie Avatar and perhaps the young Jeff Bridges (acted by old Jeff Bridges) in Tron: Legacy. Cartoon avatars are preferred because of what we call the Uncanny Valley — people notice flaws in attempts at total realism and just ignore them in cartoonish renderings. But we are now able to do moderately decent realistic renderings, and this is slowly improving.

My thought is to combine foveal video with animated avatars for brief moments after saccades and then gently blend them towards the true image when it arrives. Here’s how.

  1. The remote camera will send video with increasing resolution towards the foveal attention point. It will also be scanning the entire scene and making a capture of all motion of the face and body, probably with the use of 3D scanning techniques like time-of-flight or structured light. It will also be, in background bandwidth, updating the static model of the people in the scene and the room.
  2. Upon a saccade, the viewer’s display will immediately (within milliseconds) combine the blurry image of the new target with the motion capture data, along with the face model data received, and render a generated view of the new target. It will transmit the new target to the remote.
  3. The remote, when receiving the new target, will now switch the primary video stream to a foveal density video of it.
  4. When the new video stream starts arriving, the viewer’s display will attempt to blend them, creating a plausible transition between the rendered scene and the real scene, gradually correcting any differences between them until the video is 100% real
  5. In addition, both systems will be making predictions about what the likely target of next attention is. We tend to focus our eyes on certain places, notably the mouth and eyes, so there are some places that are more likely to be looked at next. Some portion of the spare bandwidth would be allocated to also sending those at higher resolution — either full resolution if possible, or with better resolution to improve the quality of the animated rendering.

The animated rendering will, today, both be slightly wrong, and also suffer from the uncanny valley problem. My hope is that if this is short lived enough, it will be less noticeable, or not be that bothersome. It will be possible to trade off how long it takes to blend the generated video over to the real video. The longer you take, the less jarring any error correction will be, but the longer the image is “uncanny.”

While there are 100 million photoreceptors in the whole eye, but only about a million nerve fibers going out. It would still be expensive to deliver this full resolution in the attention spot and most likely next spots, but it’s much less bandwidth than sending the whole scene. Even if full resolution is not delivered, much better resolution can be offered.

Stereo and simulated 3D

You can also do this in stereo to provide 3D. Another interesting approach was done at CMU called pseudo 3D. I recommend you check out the video. This system captures the background and moves the flat head against it as the viewer moves their head. The result looks surprisingly good.  read more »

Luminar unstealths their 1.5 micron LIDAR

Luminar, a bay area startup, has revealed details on their new LIDAR. Unlike all other commercial offerings, this is a LIDAR using 1.5 micron infrared light. They hope to sell it for $1,000.

1.5 micron LIDAR has some very special benefits. The lens of your eye does not focus medium depth infrared light like this. Ordinary light, including the 0.9 micron infrared light of the lasers in most commercial LIDARS is focused to a point by the lens. That limits the amount of power you can put in the laser beam, because you must not create any risk to people’s eyes.

Because of this, you can put a lot more power into the 1.5 micron laser beam. That, in turn, means you can see further, and collect more points. You can easily get out to 250 meters, while regular lidars are limited to about 100m and are petering out there.

What doesn’t everybody use 1.5 micron? The problem is silicon sensors don’t react to this type of light. Silicon is the basis of all mass market electronics. To detect 1.5 micron light, you need different materials, which are not themselves that hard to find, but they are not available cheap and off the shelf. So far, this makes units like this harder to build and more expensive. If Luminar can do this, it will be valuable.

Why do you need to see 250m? Well, you don’t for city driving, though it’s nice. For highway driving, you can get by with 100m as well, and you use radar to help you perceive, at very low resolution, what’s going on beyond that. Still, there are things that radar can’t tell you. Rare things, but still important. So you need a sensor that sees further to spot things like stalled cars under bridges. Radar sees those, but can’t tell them from the bridge.

To this point, Google has been the only company to say they have a long range LIDAR, but it has not been for sale. And as we all know, there is a famous lawsuit underway accusing Uber/Otto of copying Google’s LIDAR designs.

The Luminar point clouds are impressive. This will be a company to watch. (In the interests of disclosure, I am an advisor to Quanergy, another LIDAR startup.)

United Part 2: Misconceptions and realities

There’s a lot of bad information circulating on the famous United/Republic “passenger drag” so I wanted to consolidate a 2nd post with some of them.

Myth: This was an oversold flight

It turns out the flight was probably not oversold. A UA spokesman said it wasn’t. It was a fully sold flight, but a sudden need arose to move 4 flight attendants to SDF (Louisville) and they arrived at the gate after the flight had boarded. In United’s contract of carriage, it defines an oversold flight as a flight where there are more passengers with confirmed reservations checked in by the check-in deadline than they have seats on the plane. That does not appear to be the case on this flight, but Republic and UA got confused about it.

That, in turn, means Republic did not have the right to invoke the clauses of the contract for oversold flights. If so, they are just plain in the wrong, and this becomes a case with far less interesting nuance. United has changed their tune (of course due to public pressure) and are going full mea culpa.

Airline reservation computers oversell all the time, and carefully calculate exactly how much to oversell. It looks like the algorithms decided to not oversell this flight. And they were right — when they called for volunteers, nobody accepted, even at a very high price ($800 to $1,000) for a flight where most tickets are under $200. The algorithms performed perfectly.

Myth: This was United Airlines

Technically it was Republic Airline, a small regional airline dba “United Express.” However, United sells and and manages the tickets and they use the brand, and it’s under United’s contract, so United certainly gets a lot of the responsibility. And I am impressed that UA has not tried to throw Republic under the bus here.

Republic Airways actually operates lots of regional flights for United, AA and Delta, so this could have probably happened to any of them. I don’t know if they have a lot of airline specific training on bumping procedure for their teams. United may have just gotten some very bad luck of the draw here — and then made it worse by defending it at first. And it may be that the bumping policies UA gives to Republic might have made this more likely than the ones Delta and AA give it, but I don’t think they are tremendously different. Some hinges on whether the flight crew was a Republic crew, or a United crew.

But still, though it was not United, the buck stops with United, and at least now, they are not resisting that at all.

Myth: On an oversold flight, they can pull passengers off the plane.

If this had been an oversold flight, their contract still does not let them remove passengers from the plane involuntarily. It says they can “deny boarding.” Deny boarding does not mean remove — there is another section of the contract on removal. More bad news for United/Republic, but again, it makes the case less interesting as it’s an example of something you sort of expect — junior employees of a regional affiliate not being properly trained on what to do in an unusual situation and thus screwing up. That happens in 100 different ways all the time, but each particular incident is rare and probably does not indicate a systemic problem. That’s good — but it is only systemic problems that are of interest to the public, and which would make you boycott a company. If the junior employees make mistakes like this too often, then you have a systemic problem to worry about. (United does not have a good reputation on this count, of course.)

Update: These flight attendants were “must ride” passengers

New information reveals the flight crew declared themselves “must ride.” I don’t have a lot of details, but this is a special designation in the law (not the UA contract) which declares the crew are needed somewhere to avoid cancellation of a flight. Once a passenger is declared “must ride” the plane is required, reports say, to do everything possible to get that passenger to their destination, including delaying the plane and apparent, yes, even involuntary bumping. I am waiting for more information on this status, which would invalidate partly what I say above. They can’t pull you for an oversell, but they may be able to pull you for a must-ride. The law is there to keep the aviation system humming. Once flight crews don’t get to flights, it can mean disruption to more than just that flight.

Myth: If the doctor had just handed one of the police officers a Pepsi, it all would have been defused.

No, but that’s the best joke on this that I’ve seen.

Myth: It’s overselling that’s the problem

With the mistaken impression that overselling was the cause here, a lot of people are stating overselling is evil, and Chris Christie has even called to prohibit it. That’s a big mistake. Overselling is very good for airlines and the flying public. I explained that in yesterday’s post but I will go into more details below. You want an airline that does at least some overselling, though one can debate how much you want.

Myth: The airline prioritized employees over paying customers

In this situation, it needed to move those employees to crew a flight first thing out of SDF. If they had not gotten a crew there, that flight gets cancelled. Roughly 70 paying passengers get stranded against their will. While clearly nobody wants to be stranded against their will, the hard truth is you want to fly an airline that will strand (with good compensation) 4 people to avoid doing it to 70. (Here I am talking about the normal approach, which is to deny boarding to 4 people, not to try do drag people off the plane.) Still, I have to view it as prioritizing 70 passengers over 4, not employees over passengers.

Maybe: They could have driven the flight attendants there or chartered a jet

This is possibly true but possibly not. First of all, these airlines are all about procedure. They don’t authorize junior employees to be innovative or authorize them to spend money. So chances are if somebody thought of that, they had no system with which to do it. That is a fault of the airline but the sad norm of corporate bureaucracy.

Secondly, while I don’t know this to be true, all flight crew operate under a set of complex rules about required rest. You don’t want a sleepy pilot landing your plane, or a sleepy flight attendant helping people get onto the evacuation slides. These rules are very hard and fast. I suspect trying to sleep in a car doesn’t count, and an overnight ground ride is out of the question. Had they acted very quickly, and had a system in place, they could have probably gotten the crew there a bit after 11 — not long after the flight actually landed due to the chaos — so that might have worked, in hindsight.

They could have offered the passengers a limo ride, but again probably had no way to do something that out of the ordinary.

The same applies to an air charter. Getting an air charter on short notice is difficult, but they could have gotten one for the flight crew (or another flight crew) in the early morning if they had a system in place. This is very expensive of course, and so not likely to be in their playbook.

Maybe: They should never have gotten to the point where it was so urgent to get that flight crew moved

Airlines move flight crews a lot. There are airline pilots who live on one coast and mostly work on the other, commuting by “deadheading” on one of their airlines planes.

When you design a system that needs various parts — planes and flight crew — you have to “overprovision,” which is to say leave some wiggle room. That means you have some number of planes, crews and other resources sitting idle or on call, and you use them when something else fails. Everybody does it because you don’t want to run so close to the wire all the time. If you do, the slightest problem causes a cascade of cancellations. Airlines have to worry not just about small problems but even big ones like storms that cancel or delay many flights.

It’s not practical, however, to overprovision to the point that you never fail. You can do it, but it’s really expensive. You have to waste a lot of money, and you don’t have a competitive company. So every systems designer tries to figure out how to overprovision just the right amount. An amount that will have a few failures, but not too many. On top of that, you try to plan so you handle those failures with the least amount of pain, but you accept they will still happen.

What that means — and I don’t have any specific facts about this flight — is that sometimes you will be skating the edge, and sometimes you will fail. Sometimes you will find that crew are not going to make a flight unless you do something a little extra.

The bumping law, I think, is where the airlines find their “extra.” They don’t want to bump paying customers — it’s expensive and hurts customer relations. But they don’t want to cancel flights even more. So every so often, every airline has to find a solution. The bumping law offers them that solution. They can legally deny boarding to paying passengers against their will to make room for crew. This is much more workable, and under their control, than other options like using charter jets, or if distances are short, ground service.

True, but: Just about anything would be cheaper than the hit they’ve taken

That’s true — but only in hindsight. No playbook for these situations is going to say, “If you have to, spend $10,000 rather than bumping passengers just in case it turns into the PR nightmare of the year.” By definition, nobody knew that would happen.

In reality, airlines involuntarily bump 50,000 pax per year and while they grumble, this is the first time it’s ever gone done like this, with eviction from the plane, blood, camera phones and Facebook. So I don’t blame them for not seeing this could happen. I do blame them, however, for not understanding that any time you bring the police into a situation you bump the risk of something bad happening.

True, but: They should have known this would happen once they called the goons.

They should have known, but I can suspect why they didn’t — because they actually do this all the time and don’t have PR problems. Flight crews face unruly passengers reasonably often. They have training for it and procedures. And those procedures do call for getting the police, even knowing how that can go south. What those plans obviously did not account for was doing this when it was completely clear the passenger was the victim, that they only removed him because they wanted his seat. The rules for removing passengers mostly deal with safety issues. When they declare a passenger a safety risk, and the passenger makes trouble and even (rarely) causes a scuffle they are protected if the passenger was really a safety risk, or they can even come up with a credible lie why they thought he was a safety risk. No such story is possible here. Sure, the law says anybody who refuses a flight crew order can be removed from the plane. Technically it says this. In reality, it’s insane to think you can remove somebody for refusing the order “leave the plane” when the order is not given for a valid reason. The law says obey, but every sense of justice goes the other way. In fact, more than that, I don’t think a court would convict somebody for refusing that order, even if they are guilty, because society does not intend to grant the airlines that sort of power.

Put another way, three things are true:

  1. They can’t order you off the plane just to take your seat (but they didn’t know that.) We don’t want airlines to have that power.
  2. Once somebody refuses a flight crew order, you can then order them off the plane.

As such, it’s clear that “we removed him because he disobeyed our order to leave” is a loophole that would never stand up to scrutiny.

Myth: I should worry this can happen to me.

Well, I have to concede this is true — part of this did happen to me! The first flight I took with Kathryn, the airline came up to us after we had boarded, and insisted she give up her seat for a deadheading pilot. The pilot never sat there — instead he went up to use the jumpseat in the cockpit. We were quite angry, especially when her later flight lost an engine in the middle of the Pacific.

But a lot had to go wrong for this to happen. Here’s my guess as to the list of things that went wrong:

  • Something failed in the planned movement of flight crew, and they needed to get a crew to SDF for a Monday Morning flight. They looked over their options, and decided to try to get on UA3411
  • They decided that very late, so the flight had already boarded full when the flight crew came to the gate and said they needed to be on that plane. (I don’t know why they selected this one over the next, I presume both were full, or the next one might even have been oversold. You want to avoid the last flight in any event.)
  • They tried the normal approach — offer an incentive for volunteers. They got to $800. (UA says $1,000.) It failed. Nobody bit. This is a flight where everybody needed to get to SDF.
  • They didn’t know their contract well, and decided they could do involuntary bump to solve their problem. Why not, it’s what they usually do, right? They got mean, declaring the plane would not fly until 4 got off.
  • They really didn’t know their contract well, and figured they could involuntary bump by removing passengers from the plane. They can’t, but they told people they had to leave.
  • Usually that works. In fact, I suspect it’s worked pretty much every time for decades. Not this time. One man refuses to leave. Now they had a passenger refusing flight crew orders.
  • A non-compliant passenger is something they are trained for. They follow their procedure. He won’t leave. They follow their procedure and call in airport cops.
  • The airport cops are thugs. They manhandle him, injure him and drag him. All recorded on camera phones.
  • It explodes on the social networks. The company has no idea how to handle it, and botches that too.

Because so many things had to go wrong, the particular situation is not important. Rare things go wrong all the time. Junior staff at small airlines are not fully trained on contract nuances. Because things had never gone south like this before (and not in the way the plane was supposed to literally fly south) nobody had ever thought to write up procedures to remind gate crews that they can’t remove passengers, and that they can’t bump at all if it’s not actually oversold.

Those of us writing so much about this online only really want to care about systemic problems. What is wrong with the system, not just one gate crew or flight crew. If there is a pattern of errors, what can be done to fix it.

Myth: That poor doctor!

I am hesitant to include this one, because I don’t want to give the impression that I am defending in any way what happened to him, but it is an important fact. I am not saying anybody should be forcibly removed from a plane because the airline wants his seat. This was not just your ordinary passenger. Reports claim Dr. Dao lost his licence to practice medicine from 2003 to 2016 because he was convicted of trading prescription painkillers for sex, and his psych evaluations listed him as having anger management issues. One reason this escalated is that normally nobody dares to defy orders from the flight crew and especially from police. The orders were improper, and the bumped passengers deserve lots of compensation, but you have to attribute some portion of the blame for how far it escalated to Dr. Dao.

So, is overbooking evil or good?

The big question I have found most interesting is the subject of overbooking. Almost all airlines sell more seats on a plane than it actually has. They give you what they call a “confirmed reservation” and that name certainly makes people imagine they have a guaranteed seat on the plane. They don’t, but they almost do, and that’s as I will explain, a good thing for the flying public.

One basic statistic — the no-show rate on flights is around 8%. So a plane with 100 seats, if it is considered “sold out” after 100 reservations. On average, with no overselling or standby pax, it would take off with 8 empty seats. The number is not the same for every flight. Complex algorithms predict the actual number based on history of that flight and the passengers.

Myth: The airlines primarily do this as a fraud to make money by selling the same seat twice

Turns out, when people don’t fill their seat, only rarely does the airline get any money, or a profit from them. Airlines do make money from overbooking, but not the way you think. Most of those no-shows are because of late or cancelled connections. Those are money losers for the airline, big time. They have to rush to find another flight for that passenger, and get no money. Some of them are people who did free same-day changes or otherwise switched off the flight for low fee. A few have tickets with no change fees. A few more did a late flight change and paid a change fee. The change fee is sometimes as high as the ticket, but sometimes it’s much less. The airline pockets the change fee, but not without cost — the biggest one being they turned away passengers they would not have turned away because of the booking.  read more »

What went wrong and how could United do better on bumping a passenger?

Update: More careful reading of United’s Contract suggests both that this didn’t fit the definition of an oversold flight, and that even if it did, they only have the power to “deny boarding” to a bumped passenger, not to remove them from an aircraft. If this is true, then this case is simple and much less interesting: UA/Republic should admit fault and compensate those involved and retrain staff. End of that part of the story. Later-update: This might might have involved a special “Must ride” classification put on the flight crew which changes the rule yet again.

I have a follow-on post on misconceptions and realities about these issues.

The viral video of the day is that of police pulling a main from a United Airlines flight. He doesn’t want to go, and they pull him out, and bash his head on the armrest, then drag out his unconscious body. It’s a nightmare for everybody, and the video sends clear chills into every viewer. (Once, after I changed my flight to fly home from Hawai`i with Kathryn, they involuntarily removed her from the plane for a crew member. I spent the flight next to an empty seat as the crew member went to the cockpit jumpseat, and she flew on a later flight that lost an engine. We’ve never flown on that airline again.)

In spite of that, I have some sympathy for both sides, and while clearly things went very wrong here, as even United will eventually admit, the more interesting question for me is “what should airlines do to make this work better”? I do believe that UA clearly didn’t want this to happen, though their policies created a small risk that it would. I am sure they don’t want it to happen again. So if you were the person writing the policy for these situations, what would you do?

The situation:

  • This was UA3411, UA’s 2nd last flight from ORD to Louisville. UA (or rather Republic airlines, a small regional flying under the United Express logo) had 4 flight crew who were needed for an early flight from Louisville and, I presume, had no other option for getting them there. (The next flight was obviously more oversold.) If they don’t get there, and sleep the legally required amount, that flight is canceled and a whole lot of people don’t fly, and a bunch of other flights are affected too. Aviation rules are strict on this.
  • In an unusual situation, the four flight attendants are not expected. It is quite common for flight crew moving to their next job to be on flights and displace paying passengers, but unusual for it to be a surprise, to happen after the passengers have already boarded a full flight.
  • So they ask ( as is required by law) for people to volunteer to get off in exchange for a reward. Unfortunately, all they can offer is a flight Monday afternoon. Nobody wants that, apparently, and the offer gets up to $800 plus hotel. Tickets on this 90 minute flight are only $187, but nobody wants the offer. That’s also unusual.
  • The law then gives the airline another option, involuntary bump. They tell the passengers they will do this if nobody volunteers. They select a pool of “low priority” passengers (those who took super-discount fares, removing elites and the disabled and a few others.) They pick 4 at random.
  • 3 of those selected get off. The law requires they get a compensation of around $800 but in cash, not coupons. One, a doctor, refuses. He tells some people he has to see patients in the morning.
  • They say the plane can’t take off until this passenger leaves. He won’t. They call the airport cops. The airport cops come to his seat to remove him.
  • You can see what happens next on the video. He won’t go. They physically try to pull him out. He screams and clings to the seat. They pull harder. He hits his head on the opposite armrest and is knocked out.
  • They drag his limp form from the plane — you can see that on video.
  • Amazingly, he somehow gets back on the plane, bloodied and a bit confused. He keeps repeating, “I have to get home.” He does not appear to be wearing leggings.

New information reveals that a whole bunch of things went wrong at once, which does not excuse police manhandling a passenger, but helps us understand why it went pear-shaped.

First, understanding overselling — and why the flying public wants it

Most flights these days are oversold, because a lot of people don’t show for their flights. The system of overselling, then calling for volunteers when too many show up makes the planes fly mostly full these days on many routes. It’s a fact of flying and allowed in the law. It makes flight more efficient, perhaps 5-10% more. On competitive routes, that makes tickets cheaper for everybody. It has another benefit to the flying public — more people get to fly on the flight they want, because the airline is willing to sell you a seat on a “full” flight, knowing that 99% of the time you and everybody else will actually get to fly. The alternative is that an empty seat flies, and you wastefully take another flight. Passengers really like more availability, though they don’t directly see how it happens. The reality is many of the flights you see in your web search are technically oversold. If it is really sold out, it’s actually oversold past their limit.

Airlines could elect to not oversell, or not oversell as much, but that comes with a cost. More people denied the flight they want. More expensive tickets. More emissions per passenger. The world doesn’t want that, so the world allows and the law regulates, overselling.

Of course, there is a way to avoid ever being bumped. Pay more for your ticket, or be an elite flyer, as I am. (In fact, as an elite, they actually guarantee me a seat on “really, really sold out” flights 24 hours in advance, which really means they push their oversell percentage by plus-one for elites. If I do this — I never have — they just decide it is cheaper to pay a volunteer to get off the flight than to deny one of their elites the flight they need.)

So the most obvious solution, “Don’t oversell,” comes with a cost I don’t think the airlines or flying public actually want. Consider it this way. A flight you need with 100 seats has had 100 bookings. The airline knows that on average 7 of them won’t show up. Do you want the airline to let you “reserve” on that plane, or tell you “sorry, fly the next day?” Do you want them to only offer you a standby ticket because other people, who paid far less than you for their tickets and who barely fly on their airline, got there first? (And yes, those people who buy late pay a premium.) The airline hates taking off with an empty seat, but you hate being told you can’t get on a flight that ended up with empty seats even more.

Airlines are getting quite good at it. In 2015, only .09% of passengers were bumped, and only .01% involuntarily.

The public wants bumping for flight crew, too!

Turns out, it’s in the public interest that flight crew needed for another flight have higher priority than we do, even to the point of removing us from planes we already boarded. That may not be allowed, but one has to consider the difference between one person removed (voluntarily or not) with compensation and the very large group of people who will have their flight cancelled (sometimes with no compensation) if the flight crew doesn’t get there, properly rested and ready. You don’t want to be either, and utilitarianism is not always the right philosophy, but here the numbers are overwhelming. One guy doesn’t fly or 70 people don’t. So we want a system where that can happen, but smoothly and ideally voluntarily.

Understand involuntary bumping

Usually, the system of offering fat compensation — $800, a hotel and meals for a $180 flight is a pretty good deal — works fine. There are people who actually relish it. I met one guy who says he deliberately tries to get bumped the day before Thanksgiving — when the offers get very high. But nobody was taking it. Most would miss a day of work, which is not an easy thing to do.

The law then allows the airlines to do an involuntary bumping. They have an algorithm that picks people and they are “denied boarding.” The law specifies compensation. In this case 4 times the ticket price and other compensations. And this is cash, not flight coupons. Cash is worth a lot more.

This law is one of the culprits here. The law effectively puts a cap on the offer you will get. The airlines, in a move they thought at first was rational, don’t want to offer you a lot more than the price the law defines for an involuntary bump. Why give a passenger $2,000 when you can do it for $1,000 under the law. Well, one reason is bad PR — which is true in spades here.

The airlines don’t want to do this. About 1 in 1,000 passengers are bumped, and 1 in 10,000 are involuntarily bumped, and has been going down as they get better at working their systems. But it happens.

Without the involuntary rule, the airline might have considered the next solution…

Make better offers for voluntary bumping

This problem would have been defused if they had kept increasing the offer until somebody took it. (Those who took it early will of course be upset, but that’s how it goes.) While there is a practical limit, a volunteer should be found long before it.

They could also consider other things that are not money. Often bump offers come with things like first class upgrades which can be cheap for the airline and very nice to the passenger. They could offer a very coveted thing to some passengers — elite qualification. At the extreme, if they offered 20,000 elite qualification miles or a full-tier bump in elite status, I could see even elite passengers jumping up to volunteer. We don’t usually. We know we will never get involuntarily bumped. We usually have places to go. But we crave that elite status so much that some people fly “mileage runs” — flights to nowhere just to accumulate miles — to keep and increment it. If UA said, “get off this plane and we’ll make you 1K” they would have had a line out the door of volunteers.  read more »

No, Detroit is not winning the robocar race.

A new report from Navigant Research includes the chart shown below, ranking various teams on the race to robocar deployment. It’s causing lots of press headlines about how Ford is the top company and companies like Google and Uber are far behind.

I elected not to buy the $3800 report, but based on the summary I believe their conclusions are ill founded to say the least.

This ordering smacks of old-world car industry thinking. Saying that Ford and GM are ahead of Waymo/Google is like saying that Foxconn is ahead of Google or Apple in the smartphone market. Foxconn makes the iPhone of course, and makes lots of money at a modest profit margin of a few percent. Apple and Google don’t make their phones, they design them and the software platform.

Ford and GM might feel good reading this report, but they should not. I do actually like Ford’s plan quite a bit — especially their declaration that they will not sell their robocar to end-users. I also like Daimler’s declaration that they want to have a taxi style service called “Car2Come” after their Car2Go one-way on-demand car rental service. (Americans giggle at the name, Germans are never bothered by such things. :-)

GM does not belong high on the list, other than for its partnership with Lyft. They were wise to acquire a company like Cruise — and I know the folks at Cruise, this is not a criticism of them — but it’s not enough to catapult you to the front of the list.

A similar article came out a few months ago, declaring that Silicon Valley was sure to lose to Detroit, because Detroit knows how to make cars, and Silicon Valley doesn’t. The report went further and declared that Google was falling behind because they had said they did not plan to make a car. The author had mistakenly thought Google had plans to make a car — Google never said anything like that — and so decided that the announcement that they would not make one was a big retreat on their part.

Companies like Google, Apple and Uber have never stated they wished to make cars, or felt they were any good at it. If they want to make cars, they have the cash to go buy a car company, but there is no need to do that. There are a couple of dozen companies around the world who are already very good at making cars, and if you come to them with an order for 100,000 cars to your specification, they will jump to say “yes, sir!” Some of the companies, the big leaders like Toyota or BMW, might well refuse that order, not wanting to be the supplier for a threat to their existence. But it won’t help them. Somebody will be that supplier. If not a German, Japanese or U.S. company, then a Korean company, or failing that a Chinese company. In fact, Foxconn has said it is interested in making cars, and Apple is designing them, so the Apple-Foxconn relationship may be far more than a metaphor for this situation.

When you summon an Uber, you don’t care what nameplate is on the car. When you summon UberSelect, you don’t care if it’s Lexus, or Mercedes or BMW. Uber was your brand, and you aren’t buying the car for 15 years, you are buying it for 15 minutes. Brand plays a completely different role.

Companies like Waymo, Apple, Uber, Zoox and others would be foolish to manufacture cars, unless they want a car so radically different that nobody knows how to make it. (Then, they might decide to be the first to figure it out.) The car manufacturers would be foolish to turn down the giant purchase order, or partnerships with whoever has the best technology.

The winner of the transportation game of the future will be the company that thinks outside the car. That doesn’t mean the big car companies can’t do that. It’s just harder for them to do.

The chart’s not entirely wrong. Honda is pretty far behind — but PSA is even further behind. BMW, Daimler and Ford are among the best of the car companies, but Tesla and Volvo deserve higher ranking. Hyundai is not ahead of Toyota, and Tesla, while not ahead of Waymo, is in a pretty good place. Bosch is a surprising absentee from the list. FCA should be on it, just very low on the chart, along with the smaller Japanese vendors and many Chinese vendors.

But be clear. Making the car is essential, but it’s also old and a commodity. The value will lie in those building the self-driving software systems and sensors, and those putting services together around the technologies. The big automaker’s advantages — nameplate and reputation, reliability, manufacturing skill and capacity, retail channel experience — these are all less valuable or commoditized. They have to act fast to move to new business models that will make it in the future. Of course, one plan is to own the important components I name above, and several companies like BMW, Daimler, Ford, Nissan and Volvo are trying to do that. But they’re behind Waymo by a fair distance.